Germany gets serious with EV subsidies

GERMAN car buyers will get a hefty €4000 ($A6000) incentive to go electric under a €1 billion ($A1.5b) program designed to jump-start sales of battery-powered vehicles.

Plug-in hybrid car buyers will also get a €3000 ($A4466) discount under the program, the cost of which will be shared 50:50 by taxpayers and motor companies under an agreement thrashed out this week.

The incentive program is in stark contrast with the Australian situation where federal governments of all stripes have refused to provide meaningful incentives to encourage low-emissions vehicles.

Announcing the scheme this week, German transport minister Alexander Dobrindt said his government wanted to sell an extra 400,000 electric cars in Germany.

So far, Europe’s biggest car market has only 50,000 battery-powered vehicles among the 45 million vehicles on its roads, but has a goal of one million EVs by 2020.

The subsidy deal was struck in government talks with Germany’s three biggest car-makers – Volkswagen, BMW and Mercedes-Benz – but is open to all car-makers.

However, it applies only to vehicles priced up to €60,000 ($A90,000), meaning it will exclude Tesla’s €65,000 flagship Model S. However, the upcoming Tesla Model 3 should comfortably qualify.

Apart from the price subsidy that will be on a “first come, first served” basis until the pool of money runs out, the German government has also committed €300 million to speed up the installation of charging stations in cities and autobahn stops, as well as €100 million towards buying EVs for government fleets.

The scheme will not only help the German car-makers meet stringent CO2 emissions targets set to come in by 2012, but also help “future-proof” them by making EVs “mass market capable”.

While the German incentives are big by Australian standards, they only bring the country into line with other European nations such as the UK, Netherlands and Norway.

In 2014, the British government announced £5000 ($A9546) incentives for electric car buyers, and up to £8000 for commercial vehicle owners.