Germany Considers ‎€5000 Incentive To Aid In EV Sales

2 years ago by Jay Cole 30

Tesla Supercharging Station In Germany

Tesla Supercharging Station In Germany

Sales of electric cars in Germany aren’t great.  In fact, they are outright depressing…and that is even counting the bogus plug-in sales being registered in the country late in 2015 in an effort to skirt EU emission regulations before being re-sold elsewhere.

Plug-in electric car registrations in Germany Through 2015 (Assisted In The Last 4 Months By Kia Soule EV)

Plug-in electric car registrations in Germany Through 2015.  Assisted In The Last 3 Months By A Sudden ~2,400 Phantom (we assume) Kia Soul EV Registrations

At one point, the country had a goal of having 1 million EVs on the road by 2020 (and we suppose it still does officially).

As it stands at the end of 2015, only about 50,000 plug-ins have been sold (~24,000 in 2015), a quarter of the planned amount by this point in time.

In an effort to change its EV fortunes, the government in Germany has long threatened to bring in incentives in the past, but up until now, nothing of significance has materialized.   That may change soon enough.

On Friday, a senior ally of German Chancellor Angela Merkel said that politicians and auto executives will now sit down with the Chancellor directly and discuss incentives of up to 5,000 euros ($5,400 USD) on new plug-in purchases to kick-start the segment.

“The heads of the three parties in Merkel’s ruling coalition have weighed introducing a subsidy for electric car buyers, said Horst Seehofer, head of the Christian Social Union (CSU), sister party of Merkel’s Christian Democratic Union (CDU).” reported Reuters Friday.

Past The Rather Suspect 3,839 Kia Soul EV Registrations In Germany, The BMW i3 Finished "Second" With 2,271 Sales

Past The Rather Suspect 3,839 Kia Soul EV Registrations In Germany, The BMW i3 Finished “Second” With 2,271 Sales

As always, the German government is there to once again throw a potential wrench the program, as Mr. Seehofer says that Germany is “looking into” having the car company’s themselves co-finance the new incentives.  Those kickbacks will be one of the central issues Chancellor Merkel will discuss with auto execs next week. Viel Glück” with that one.

No figures on how much the automakers might be asked to contribute, but Der Spiegel (German weekly magazine) suggested a figure of 1,500 to 2,000 euros per incentive is being tossed around.

When asked for comment, a Economy Ministry spokeswoman said Friday on the potential for incentives.

“Talks within the German government are constructive. We are counting on arriving at a good solution to help achieve our goals”

So, will this time, be the time Germany gets serious about EV incentives?  Or will the can get kicked down the road once again?

Yahoo! Hat tip to Dag J!

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30 responses to "Germany Considers ‎€5000 Incentive To Aid In EV Sales"

  1. notting says:

    There’s already a tax discount for companys buying BEV or hybrid. And free annual car tax for 10 years if first time registered in the last few years (from January 1st, 2016 to December 31st, 2020 only 5 years, but all BEV get a 50% discount there no matter when first time registered).

    notting

  2. Alaa says:

    I agree with Mr. Seehofer that says
    ‘that Germany is “looking into” having the car company’s themselves co-finance the new incentives.”

    Simply because Qatar owns a big chunk of VW etc.
    Just look at this
    http://www.volkswagenag.com/content/vwcorp/content/en/investor_relations/share/Shareholder_Structure.html

    So is it logical that Qatar will pay money so that it earns less! IMPOSSIBLE So this Mr. Seehofer is trying to stop the advent of electric cars in Germany. And now you are asking yourself why do I agree with him, well I don’t I just wanted to illustrate that his interest is in keeping his job and the income he gets from Qatar. So he will sell the future of his climate and the health of his kids just to have more money from the Arabs!

  3. andre says:

    we just start to understand -modern- Germany……(VW,…….dirty coal,and other scandals…media coverups….etc.)

  4. Mister G says:

    The world needs to see permanent sea level rise in major coastal cities to increase demand for BEVs.

  5. Pushmi-Pullyu says:

    The article says:

    “Mr. Seehofer says that Germany is ‘looking into’ having the car company’s themselves co-finance the new incentives…

    “No figures on how much the automakers might be asked to contribute, but Der Spiegel (German weekly magazine) suggested a figure of 1,500 to 2,000 euros per incentive is being tossed around.”

    This is absolutely insane. The purpose of government incentives for EVs is to encourage auto makers to develop EV powertrains, and to put EVs into production even during this “early adopter” stage of the tech, when they’re too expensive to fully compete with gasmobiles.

    Requiring the auto maker to pay for part of the incentive… means that part of it is no longer an incentive.

    DUH!

    1. Alaa says:

      Man the Arabs own VW etc.

  6. Rich says:

    Asking the automotive companies to pay a portion of the rebate is a total PR move. The auto companies will simply raise the price by the amount of the rebate they have to contribute. This will cost the auto companies nothing and create the illusion that they’re helping. The propaganda is astounding.

  7. Jernej says:

    You guys are completely irrational about Germany. Their CO2 emissions are dropping pretty fast. You can thank Japanese and their incompetent nuclear energy for the temporary increase in coal use.

    1. andre says:

      and the 10-12 Million VW,Audi…..”clean” Diesels…..was caused by the polish coal lobby?…..

      1. Jernej says:

        That’s got nothing to do with climate change. It’s air quality issue. Pro diesel policies are not so much German policies, but are EU wide. German car companies cheated most i guess, that’s true. But dont think EU politicians were lobbied only by Germans.

    2. Mikael says:

      Increased emissions compared to 2009 and barely 10% dropped in the last 15 years. And almost all of the change coming from the industries, barely nothing from the energy or transport sector.

      https://www.cleanenergywire.org/sites/default/files/styles/lightbox_image/public/images/factsheet/ghg-emissions-sector-1990-2014-update-mai-2015-uba.png?itok=Au_jP64B

      Not really a role model.

      So far it’s been more about trying to look green while being as brown as possible in reality. Total greenwashing.

      And what Japan has been doing is hardly relevant to what Germany is and should be doing. Japan needs it’s own discussion elsewhere but they are also one of the countries that, just like Germany, needs to step up their game and do some massive environmental improvements. A good start would be to start up as many of their idling nuclear plants as possible.

  8. You left out a very important piece of information for my Teslarian friends. I shall quote from the Wall Street Journal:

    “It’s a hard sell to Ms. Merkel’s conservative lawmakers. Several people familiar with the situation said her influential finance minister, Wolfgang Schäuble, vehemently opposes any move that would appear to be using taxpayer money to subsidize rich consumers of luxury cars… One compromise, the industry executive said, could be to exclude electric-battery and hybrid versions of big luxury cars… ‘It might be an option to limit the incentives to small cars,’ the executive said, adding that the discussion about cash incentives in still very fluid. ‘This is going to be very hard to get through Parliament.”

    Now, before you starting talking about the “Model 3” I shall simply point out that Germany will be lucky to see that car by 2019 while: “I can imagine a cash incentive of 5,000 euros ($5,400) per car,’ he said, adding that the government should earmark about €2.5 billion in funding until 2020…”

    1. Jay Cole says:

      Its a fair hypothetical point from one of the disseminators, but really we are so far away from that kind of discussion it is a bit moot/specific to bring in one brand at his point in time I think.

      Just speaking off the top of my head:

      It is also hard to believe that Germany is trying to sit down with BMW, Mercedes and the VW Group (which includes a lot of premium brands) to get them to contribute 1,500-2,000 Euros a pop then on the incentive, then say, “oh, and all those ‘big luxury cars’ you are electrifying now…they don’t count“. BMW is putting a plug on the entire lineup, Daimler has 10 plug-ins in the next 2 years, VW Group has ~10.

      Again, this is the kind of stuff behind the scenes that has been causing the gridlock. In all likelihood, if Germany really wants EVs and a decent incentive program, Merkel is going to have to “fist of death” it into existence when dealing with the government or the OEMs, or make a horse-trade/swap on some other program to gain capitulation from those in opposition.

      For now, we are still just looking for any kind of incentive program at all. So maybe we don’t need to turn this into another “Tesla” thread (only ~3% of Model S sales are logged in Germany)…but, that is just a suggestion, (=

      1. Mark B. Spiegel says:

        Lol, the only reason I mentioned Tesla is that your top photo for the story shows three of them at a Supercharger!

        1. Jay Cole says:

          Yeah, that’s the reason, (=

          /wink

  9. Ian says:

    Sell all new 100% Electric vehicles exempt from initial sales tax and compound that with a 0% financing for 84 month standard and you can eliminate the incentive. The savings will be more than the incentive and will eliminate the cost of any administrative costs to maintain a incentive program.

  10. pjwood1 says:

    Can we even trust Merkel is a governing factor in German auto policy?

    1. andre says:

      most likely China,US,later India will decide the future,meanwhile europeans Willkomen to clean-green diesel rust…..inhalation therapy…..

      1. Anybody says:

        It would be very interesting to see just how many comments of fud you already posted. I mean they aren’t really adding anything to the discussion in my opinion. You seem to have a real anger problem with Europa. I for myself think that its impossible for Europe to adapt as fast to the current situation as other countries because of the giant car industrie/lobby here which has quiey some influence on our politics.

  11. SJC says:

    After PNGV made hybrids in the 90s, the U.S. car makers did nothing, Toyota and Honda made the hybrids. How could we give incentives for foreign autos, when our own car makers did nothing?

  12. Rick Bronson says:

    A country that replaces Nuclear power plants with Coal fired power plants are not going to encourage electric vehicles.

    If they cut the Diesel subsidies, that will automatically encourage people to buy more Electric Vehicles.

    Still the companies like BMW & Renault can build charging stations every where to encourage people to buy more EVs.

  13. kdawg says:

    I’m confused by making the auto companies contribute toward an incentive. Wouldn’t be easier for them to just lower the MSRP? How will this work for imports to Germany? Will automakers have to raise their price when selling in Germany so they still make a profit after having to pay an incentive?

  14. andre says:

    the most disappointing to see in this so called green,and extremely rich country…..how few, really sincere “green”people are……the rest is show…..

  15. wavelet says:

    Jay,
    Please reword the article to avoid the word “kickback” — the article is misusing the term, and causing confusion.
    The accepted (and dictionary) meaning of a kickback is a
    “a payment made to someone who has facilitated a transaction or appointment, esp. illicitly.”
    Since there’s nothing like this involved in some people’s desire that automakers shoulder all/some of the cost, the term is inappropriate.

    1. Jay Cole says:

      Hey wavelet,

      The wording was intentional, and the definition which you have given is appropriate…at least in our interpretation of the incentive as proposed.

      In this case, a contribution by the OEM is in essence a circular transaction that would give the appearance of an incentive, which is being made in order to acquire additional monies that would not have been made available.

      The payment offers no real capital (as OEMs are business and they have set the price they feel they need to make…so it is reasonable to assume they will adjust for this new payment/expense when calculating future pricing) and is made to complete a transaction that would see additional monies contributed by a third party, and to “simulate” a 5,000 Euro incentive.

      Germany wants EVs to be cheaper via incentives…so they go to the people making EVs and say, give us money to turn around and give back to you to make your product cheaper? That isn’t how incentives work…an incentive is an outside influence applying extraordinary demand on a product or service.

      This akin to saying if you want this job, we have to pay you minimum wage of $7.25, but you also have to pay us $2.90 per hour as a “service fee” before we hire you. Everyone and their dog, knows this job is actually paying $4.35, and it is not a reputable proposal.

      As it stands/is proposed, this is really a 3,000ish Euro incentive proposal, dressed to look like 5,000. Heck, they should ask for 7,000 Euros, so they can have a 10k rebate, or maybe 17k euros, for 20k. Makes no difference, you can’t mandate margin out of a 3rd party product…unless you are going to make it yourself.

      In the real world try doing this between two public companies. Transfer money to another company, with the understanding they send it back to you as revenue, and then just keep repeating the process…see how the authorities look at that transaction as it grows.

      1. ItsNotAboutTheMoney says:

        What’s the actual wording on the proposal?

        It’s circular if a manufacturer pays for the incentive on its own cars.

        If it’s an industry-wide system, paid by a levy on all new cars sold, then it’s not circular.

        1. Jay Cole says:

          There isn’t any hard proposal for anyone to look at (at least publically), this is just getting all the main people in a room together…and outlining the basics of the framework the gov’t would like to see ahead of the meeting.

      2. wavelet says:

        I still disagree.
        Classical kickback is when (say) a government official makes sure company X gets a contract, and s/he gets some (usually illicit) benefit out of the company’s income from that deal. There are only two parties involved directly.

        The concept in Germany (and it’s been suggested elsewhere as well) is, as ItsNotAboutTheMoney, thought, to levy an EV tax on all car production, which would then fund the incentives. The subsidy would go to the end buyer.
        That’s a very different thing — the incentive is coming out of a pool, and so not circular.
        The reason the tax would be on production, rather than on car sales, is because it therefore would also incentivize the local producers to make EVs, not just the German public to buy them.

  16. mr. M says:

    I am against incentives in germany. The EU has laws (CO2 regulations) that will require ~20% marketshare for EVs soon (2022+). Regardless of incentives or not the OEMs need to fullfill these CO2 numbers. If they can’t fullfill these numbers, they will be paying huge fees.

    If we introduce a incentive now the effect will be none, but the OEM make more money selling EVs.

    Don’t help them what they need to anyway. They made enough money for long years.