Doubled electric car subsidy costs the federal government almost two billion

The doubling of the electric car subsidies a year ago appears to be having an impact on the German car market: in the course of twelve months, well over half a million vehicles with purely electric or plug-in hybrid engines have been registered - more than in all previous years combined. The state-fueled boom emerges from the data from the Federal Motor Transport Authority.

Accordingly, the costs of the subsidies have skyrocketed since then: These add up to a good 2020 billion euros from the beginning of June 2021 to the end of June 1,9, as the Federal Office of Economics and Export Control (Bafa) responsible for paying out the subsidies in Eschborn announced.

Electric cars are no longer a niche product. According to a survey commissioned by the portal Verivox, 14,6 percent of potential car buyers between the ages of 18 and 69 say their next car should be a purely electric car. 7,7 percent prefer a plug-in hybrid, so more than a fifth together.

567.000 new electric cars registered

In terms of popularity, e-cars are still far behind gasoline engines, which are preferred by almost 38 percent, but ahead of diesel with 12 percent. For the representative online survey, the market research institute Innofact asked 1000 people in June.

A year ago, the Federal Cabinet resolved to double the purchase subsidy, with retroactive effect to June 3, entitled "Innovation Premium". The number of registrations - and the associated expenses - skyrocketed almost overnight: from the beginning of June 2020 to the end of May 2021, more than 567.000 new electric cars were registered, with another 65 added in June.

For comparison: in the four years before from 2016 to 2019 there had been a total of only 256.000 electric vehicles, before that even fewer. Hybrid motors without an externally chargeable battery are not counted.

The higher premium is to be extended until the end of 2025

For the state treasury, the subsidies are associated with rapidly increasing expenditure: In the first half of 2020, 77,6 million euros were paid out to car buyers "for the switch to climate-friendly mobility," according to Bafa. After doubling the grant, it was already 575 million in the second half of the year, a seven-fold increase. And this year it was already 1,33 billion euros by the end of June.

The purchase and leasing of pure battery cars and plug-in hybrids with rechargeable batteries are funded. Cars with fuel cell engines are also subsidized, although only minimal numbers of these are permitted.

The significantly higher state premium is currently limited to the end of 2021. However, it should soon be extended until the end of 2025, as the Federal Ministry of Economics recently announced. According to the ministry, a grant of up to 40.000 euros can be applied for for electric vehicles that cost less than 9000 euros net list price. For hybrid cars it is 6750 euros. For electric vehicles with a net list price of 40.000 euros, the subsidy is up to 7500 euros for purely electric vehicles and up to 5625 euros for hybrid cars.

The higher subsidies are intended to help the German auto industry on the one hand and to reduce CO on the other2Emissions contribute. Some experts and associations reject the high subsidies, including the taxpayers' association.

One point of criticism did not come true: that the subsidies would mainly benefit foreign manufacturers. In terms of sales of battery and plug-in hybrid cars, four German manufacturers are in the first four places this year: VW - the brand, not the group - led the way with a good 59.000 cars in the first half of the year, followed by Mercedes, BMW and Audi. As the first foreign manufacturer was Renault in fifth place. Tesla was also in second place behind VW when it came to purely battery-powered cars.

According to the Verivox survey, private customers prefer all-electric cars, while plug-in hybrids are more preferred than company vehicles. Almost a third of those surveyed believe that all-electric cars will gain the most market share in the next ten years. The most frequent argument against an electric car is still the insufficient range, which was mentioned by 46,7 percent of those surveyed.