Electromobility in Germany Buyer’s Premiums for Electric Cars Slow in Demand

After about one and a half years, only about ten percent of the subsidies available for the electric car premium have been used up. It is unlikely that the pot will be empty until the intended end of the subsidy in mid-2019.

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The demand for the government premium offered for the purchase of electric cars is generally very low, even though demand has risen significantly in recent months. In the eighteen months since the introduction of the premium, only slightly more than ten percent of the total amount have been applied for, reports the newspaper Welt.

The newspaper refers to figures published by the Federal Office of Economics and Export Control (Bafa). Accordingly, 46,897 subsidy applications for the purchase of an electric car have been submitted so far. A total of € 600 million is available in this fund. To date, some € 65 million have been granted," Bafa President Andreas Obersteller told the newspaper.

Subsidies Might Not Be Used Up

The Federal Government is funding the purchase of a battery car or fuel cell vehicle with € 2,000. Plug-in hybrids are subsidized with € 1,500. Manufacturers of the vehicle must contribute at least the same amount in the form of a discount in order for the subsidy to be granted. The subsidies are sufficient for more than 300,000 vehicles.

“At present, there is reason to believe that the funds won’t be used up by the end of funding period in mid-2019," said Obersteller. The Bafa President therefore suggested that the money should be used elsewhere to promote electromobility: "The new Federal Government could reallocate part of the budget and make it available for the promotion of a private charging infrastructure. This support could be granted, for example, to craftsmen, hotels or housing estates."

Sluggish Demand for Electric Cars

Recently, however, Bafa recorded a steadily rising demand for purchasing premiums. The funding program, started in the summer of 2016 with around one hundred applications per day, now the figure has tripled to 300. According to Bafa figures, 24,500 applications were submitted by companies and about21,600 by private customers. Government institutions remained hesitant: Only 346 municipal enterprises and special-purpose associations applied for the premium.

The reason for the sluggishly demand for electric cars is the insufficient network of charging stations. Since the vehicles have relatively short ranges, many car buyers are skeptical. The German government has already distanced itself from its ambitious goal of bringing one million electric cars onto German roads by 2020.

This article was first published by Automobil Industrie.

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