German Government Approves Massive EV And Plug-in Hybrid Incentive Program

Years ago, Germany announced an ambitious plan to have one million electric cars on its roads by the end of this decade.
Mercedes-Benz S550 PLUG-IN HYBRID 1 photo
Photo: Mercedes-Benz
Until today, it seemed as they will miss the target by a long shot, but it appears that the German government is attempting to fix things.

The country’s Cabinet has approved a set of incentives and tax breaks for citizens and companies that buy electric or plug-in hybrid vehicles.

The $1.1 billion (1 billion euros) plan will share costs equally between the government and the country’s car industry, so automakers will have a powerful incentive of their own to start offering more eco-friendly vehicles. The billion-euro project also includes a fund of 300 million euros, which will be spent exclusively on charging stations.

On a first-come, first serve basis, customers of electric cars will get a subsidy of 4,000 euros. Meanwhile, those that purchase plug-in hybrid cars will get a bonus of 3,000 euros.

If the 1,000-euro difference between the two does not motivate people to buy electric vehicles, customers of the latter will also be exempt from vehicle tax for ten years, and the measure is with retroactive effect from the beginning of this year.

The previous exemption was of five years. Furthermore, if electric car owners in Germany charge their vehicles at work, they have a reduced tax rate of 25% on this non-cash benefit.

At the moment, Germany has an estimated 45 million cars on its roads. Out of these, approximately 50,000 are purely battery-electric vehicles and plug-in hybrids, Automotive News informs. Hydrogen cars are not even mentioned in this statistic, and some analysts believe they might never take off if governments do not take action.

Unfortunately for Germany, not even this incentive will bring the country’s dreamed million electric vehicle target for the roads of 2020. However, the Government hopes that 400,000 electric cars will be purchased thanks to these new incentives. A ten-year tax deduction might go a long way for some, but they still have to afford an electric vehicle first.
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About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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