German Economy Minister Robert Habeck (Greens) will accelerate the renewal of the German automotive industry with a comprehensive package. A paper, reported by the Funke Media Group newspapers, suggests that Habeck’s department, among other things, will financially support electric vehicle owners when recharging their cars, at least for a certain period.
“We want to finance a 1,000-euro charging credit (for recharging at public charging stations) for the state” it says in the three-page concept from the Federal Ministry for Economic Affairs and Climate Protection (BMWK).
In addition, the ministry is advocating for the reintroduction of a purchase premium. “For buyers of electric vehicles with low and medium incomes, we will introduce a tax incentive” the BMWK says. A certain part of the purchase costs could be deducted from the tax, similar to the incentive for energy-efficient building renovations, which was discontinued due to the budget crisis at the end of 2023.
For people with low incomes, Habeck’s ministry also considers “alternative models like a social leasing model” for electric vehicles, which is already available in France. There, the state supports households with a reference income of less than 15,400 euros per year in leasing rates for electric vehicles up to 13,000 euros per vehicle.
The paper also focuses on the used car market: “To boost the used car market, we want to subsidize professional battery checks with 100 euros” the ministry formulates. Especially for “price-sensitive customers” used cars can facilitate the entry into electric mobility. The potential buyer would receive a guarantee about the condition of the used vehicle’s battery and thus about the vehicle’s residual value through a professional battery check.
In Germany, electric vehicles have been struggling with sales difficulties for some time. In the previous month, the number of new electric vehicles registered in the country fell again, with around 35,200 battery-powered vehicles hitting the roads in November, a decline of nearly 22% compared to the same month the previous year. Their share of all new registrations was around 14%. Industry observers, however, expect a trend reversal in electric vehicles next year. According to the consulting firm EY, manufacturers are under pressure, as the new emissions targets can only be achieved with a high proportion of electric vehicles in the new vehicle fleet, leading to falling prices.
The BMWK also suggests that the ministry will make the penalties for the auto industry for non-compliance with the fleet targets more flexible and “create the opportunity to avoid penalties in 2025 by exceeding the targets in 2026 and 2027.” To overcome the location disadvantage in Germany, the ministry names the essential elements as “an investment premium, the reduction of the electricity tax, and the halving of the network charges, as well as further efforts to reduce bureaucracy.” Habeck had already proposed this, among other things, and advocated for a so-called “Germany fund.”
For the further development of e-mobility in Germany, the expansion of the charging network must be accelerated. However, “more competition through a higher offer and better price transparency” is needed, the BMWK says. Dynamic electricity tariffs will enable the recharging of electric vehicles from 2024, when the electricity is cheap. The next step will be the so-called bidirectional charging, where cars can feed energy back into the grid if they don’t need it, generating a profit. Habeck will also push for the electricity tax to be reduced to the European minimum level and the network charges to be halved through public co-financing.