Germany’s coalition government has agreed to a proposal for an electric vehicle tax credit to promote the popularization of electric vehicles, Reuters reported.
According to the draft approved by the German Cabinet on September 4, companies will be able to get a tax break of up to 40% of the selling price of newly purchased electric vehicles or zero-emission vehicles that meet the requirements in the year of purchase, and this percentage will be reduced to 6% year by year. In addition, the maximum selling price of 95,000 euros of electric and zero-emission commercial vehicles will also be able to enjoy tax incentives, while the previous enjoyment of preferential policies for the model price limit of 75,000 euros. The German government estimates that the average annual cost of the tax incentives from 2024 to 2028 will be about 465 million euros ($514 million).
VDA, the German automotive industry association, has expressed its support for the German government’s above plan. on September 4, VDA said, “This is an important and correct signal, especially in the context of the German government’s sudden removal of subsidies for electric vehicles at the end of last year as well as the slowdown in demand for electric vehicles.”
On Sept. 3, German Economy Minister Robert Habeck said the German government will continue to support the country’s auto industry’s transition to electric vehicles.
The said new measures are part of the German government’s package to stimulate economic growth in the country. But previously, environmental and social groups have doubted that these measures can boost electric car sales, and criticized that these subsidies will mainly benefit high-income people.
As Europe’s largest economy, Germany is working to increase the popularity of electric vehicles. But official data show that new registrations of electric cars in Germany fell 36.8 percent year-on-year in July. In addition to more expensive electric cars, German consumers are also concerned about the lack of charging stations and the range of electric cars.