Germany announces electric vehicle subsidies

The German government has revealed plans to provide buyers of electric vehicles and plug-in hybrids with respective subsidies of €4000 (£3098) and €3000 (£2323).

Announced in a press conference on Wednesday morning, the German government subsidies are planned to be restricted to electric vehicles and plug-in hybrids costing no more than €60,000 (£46,479) in a move aimed at achieving a German government target of 500,000 electric vehicle and plug-in hybrid sales by the end of 2020.

This represents a tenfold increase on the 50,000 electric vehicles and plug-in hybrids currently registered in Germany.

Plans for the subsidy programme, which is expected to be approved by German parliamentary cabinet ministers in May, come after heavy lobbying on the part of the German car industry, which has argued that the high cost of electric vehicle production prohibits competitive pricing of electric vehicles and plug-in hybrids against more conventional petrol and diesel-powered alternatives.

The budget for the subsidy programme, which is planned to kick off in May and run through to the end of 2020, is put at €1.2 billion, some €600 million of which will come from German government coffers and the remaining €600 million from a fund set up by the German car industry. This will provide the basis for subsidies on up to 400,000 vehicles, according to German transport minister Alexander Dobrindt.

As well as revealing plans for electric vehicle and plug-in hybrid subsidies, the German government has announced that it has set aside €300 million to fund the expansion of the existing network of EV charging stations.

The UK's incentives for electric and plug-in hybrid vehicles is currently set to end in March 2018; from April this year, the largest amount available dropped from £5000 to £4500 for cars with a 70-mile-plus range, while cars with a shorter zero-emissions range receive £2500. A price cap was also introduced, with vehicles costing over £60,000 being ineligible for the grant.