Germany to launch 1 billion-euro discount scheme for electric car buyers

Wed Apr 27, 2016 11:08am EDT
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By Andreas Cremer

BERLIN (Reuters) - Germany is set to launch a new incentive scheme worth about 1 billion euros ($1 billion) to get more consumers buying electric cars as it struggles to meet a target of bringing 1 million of them onto its roads by the end of the decade.

The costs of the incentives, similar to those already established in some other European countries, are to be shared equally between the government and automakers with a view to selling an additional 400,000 electric cars, Transport Minister Alexander Dobrindt said on Wednesday.

Critics say higher electricity generation to charge battery cars will increase carbon dioxide emissions.

Currently Germany, the biggest car market in Europe, has only about 50,000 purely battery-powered vehicles and plug-in hybrids among the 45 million cars using its roads.

Under the plans, agreed early on Wednesday between government ministers and representatives of Volkswagen (VOWG_p.DE: Quote), Daimler and BMW, electric car buyers will get a 4,000-euro discount while buyers of plug-in hybrid vehicles will get a discount of 3,000 euros.

"With this, I believe we will be able to give a boost to quickly move the number of vehicles (sales) to a considerable level," Finance Minister Wolfgang Schaeuble said.

The program includes 300 million euros of spending on charging stations and could start as early as May, Schaeuble said, adding that the government was considering further steps like tax incentives to make electric cars even more attractive.

"It's true that the government may have left carmakers with too much wiggle room on emissions and industry certainly pushed things to a limit there," Bankhaus Metzler analyst Juergen Pieper said. "But the decision to kick-start demand for EVs is right, other countries are doing this too for good reasons."   Continued...

An electric Volkswagen Passat car is pictured at charging station at a VW dealer in Berlin, Germany, February 2, 2016.   REUTERS/Fabrizio Bensch