Automakers to Contribute to Electric Car Incentives in Germany

Germany has one of the world’s largest automotive industries, but, until recently, they’ve been lacking in environmentally friendly vehicles, with most of the industry being centered around traditionally powered vehicles.

But unlike most of the other global automotive manufacturing powerhouses, such as the United States and JapanGermany has not been using subsidies to encourage the purchase of electric vehicles. This is one of the reasons why Germany lags behind its North American and Asian counterparts in terms of electric car use.

That could change soon, though, as the German government plans to introduce incentives for electric vehicles, in a bid to increase demand for green vehicles and reduce the number of gasoline-powered vehicles on the road.

 

Incentives for Both Individual Buyers and Businesses

As reported by Reuters, the German government has devised a plan to encourage the use of electric vehicles, by subsidizing the purchase of pure electric cars or hybrids, providing financial support to electric car buyers that is similar to the support U.S. consumers get from the federal government and state authorities.

The plan that was proposed by the German ministries of environment, transport and economy involves giving up to 5,000 euros ($5,500 USD) in rebates to those who decide to buy an electric vehicle.

On top of subsidizing purchases by individual consumers, the plan is to offer incentives of up to 3,000 euros (about $3,300 USD) to businesses for each electric vehicle they include in their fleets.

 

Automakers to Chip In, As Well

According to the plan, the incentives are supposed to stay in effect until 2020, with the amount awarded to businesses and private buyers decreasing by 500 euros at the end of each year.

The key difference between this incentive program and those in other countries around the world, is that in Germany’s case, automakers themselves will share the cost of the incentives. As Reuters’ report states, German auto manufacturers that build electric cars would bear 40% of the total cost of this incentive program, which is estimated to be worth around 1.3 billion euros, or about $1.41 billion USD.

 

A Million Electric Cars by 2020

This plan is part of Germany’s efforts to put 1 million electric cars on the country’s roads by the end of decade, which at the moment seems to be a very difficult target to meet. Given that the number of electric cars now in use is far from the government’s expectations, they are now turning to a model that has proven to be successful in other countries.

Incentives play a significant role in the promotion of electric vehicles in the U.S., and Germany hopes that subsidizing the purchase of these green vehicles will help boost demand and make many people switch from gasoline-powered vehicles to this more eco-friendly alternative.

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