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E-car subsidy before stop: Car industry calls for extension of environmental bonus

2023-12-05T15:09:04.873Z

Highlights: The German government plans to phase out its subsidies for electric cars next year. Car industry calls for extension of environmental bonus. The financing of state aid for climate-friendly projects is in question following the budget ruling of the Federal Constitutional Court. In the year that is coming to an end, the number of new registrations in Germany will reach 2.85 million cars, an increase of seven percent compared to the previous year. The VDIK expects a sideways movement in the German new car market as a whole in 2024.



Status: 05.12.2023, 15:57 PM

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Buying an electric car is often an expensive undertaking: combustion engines are often the cheaper alternative. © Hendrik Schmidt / dpa

After years of support, the German government plans to phase out its subsidies for electric cars next year. As expected, the industry concerned does not think much of this.

Frankfurt - Car importers are demanding an extension of the state electric car purchase premiums in Germany for a few years. "We are sensing an enormous reluctance to buy because the customer does not know what will happen next," said Reinhard Zirpel, president of the Association of Car Importers (VDIK), in Frankfurt on Tuesday. "We are concerned about the imminent end of subsidies for electric cars." The federal government must compensate for the even higher new car prices for battery-electric cars with a long-term subsidy program, at least for the next two or three years. Their prices are still ten to twelve percent higher than those of comparable combustion vehicles.

The environmental bonus, with which the state wants to boost the sale of the still comparatively expensive electric cars, was already cut this year and is due to expire in the course of 2024. At a recent high-level meeting with German Chancellor Olaf Scholz, the automotive industry called for the subsidy to be continued so that the government's goal of 15 million electric cars in Germany by 2030 can be achieved. However, the financing of state aid for climate-friendly projects is in question following the budget ruling of the Federal Constitutional Court. The most recent car summit in the Chancellery was too early because of the unclear budget situation, explained Zirpel, who had taken part in the meeting. There has been no statement from the federal government on further funding policy.

After a stop in subsidies, will there also be a stop to sales? Plug-in hybrids as a cautionary tale

According to VDIK forecasts, growth in all-electric cars will weaken somewhat in the coming year to an increase of 14 percent, after 545,000 new registrations of electric cars will be on the road this year, 16 percent more. This corresponds to a market share of 19 percent. How dependent the market is on state subsidies was shown by the slump in plug-in hybrids by a good 50 percent after the environmental bonus for this was completely abolished.

For the German new car market as a whole, the VDIK expects a sideways movement in 2024 after significant sales growth this year. In the year that is coming to an end, the number of new registrations in Germany will reach 2.85 million cars, an increase of seven percent compared to the previous year. This volume is also expected for 2024. "So, after the decent recovery in 2023, the market will maintain its level next year." However, car dealers this year had largely processed orders from 2022, which had piled up due to the supply problems of carmakers during the Corona pandemic. Half of the order backlog has been worked through, Zirpel explained. However, incoming orders are declining, and car prices are falling with the growing supply. (Reuters, LF)

Source: merkur

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