The federal government didn’t hesitate for long when it came to the planned earlier end to the state purchase bonus for electric cars and stopped the environmental bonus at the weekend. As of December 17, 2023, no new applications for the environmental bonus can be submitted to the Federal Office of Economics and Export Control (BAFA), as the Ministry of Economic Affairs and Climate Protection announced on Saturday in Berlin. Funding that has already been promised is not affected and will be paid. Applications received by Bafa up to and including December 17, 2023 will be processed in the order in which they are received.
Last Wednesday, the traffic light coalition made up of the SPD, the Greens and the FDP reached an agreement on how to plug billions in holes following the Federal Constitutional Court’s budget ruling. This affects the core budget as well as the Climate and Transformation Fund (KTF), which also finances the funding for electric cars. According to the ministry, e-car funding was originally supposed to expire at the end of 2024 – or before if the funds have been used up.
Cars that have been ordered are no longer available
The consumer advice centers had generally welcomed the earlier end of the purchase bonuses. “Purchase bonuses were important in the short term to stimulate the spread of electric cars,” said the Federal Association’s mobility expert, Marion Jungbluth, to the German Press Agency. In the long term, however, the market ramp-up cannot be financed at taxpayer expense. “However, it must be ensured that at least everyone who has already ordered their electric vehicle with confidence in the funding receives a bonus.” To achieve this, the federal government must make the purchase date the decisive factor.
The ADAC also criticized the procedure for only making the funding commitment upon registration rather than upon purchase. The decision is particularly bitter for consumers who had ordered an electric vehicle but were unable to register it before December 17th because they had taken the environmental bonus into account.
Demand for a reliable transition
The SPD parliamentary group is in favor of the early expiry of the funding. “However, we find the funding stop on December 17th, which was announced at short notice on Saturday, to be extremely unfortunate,” three deputy SPD parliamentary group leaders told the dpa. Climate Protection Minister Robert Habeck (Greens) must organize a more reliable transition. The parliamentary group vice-presidents Detlef Müller, Matthias Miersch and Verena Hubertz explained: “Citizens expect realistic transition periods from political decision-makers. When purchasing a new car, most people have to calculate very carefully how they can afford it and are assured of the bonus planned.”
The Central Association of the German Motor Vehicle Industry (ZDK) also criticized the abrupt end of funding. “This is an incredibly big breach of trust for tens of thousands of customers who ordered their electric vehicles on the condition that the funding would be paid,” said ZDK President Arne Joswig, according to the announcement. “The minimum would be to let the environmental bonus run until the end of the year and at the same time, in coordination with states and municipalities, ensure that registration offices remain open until December 31, 2023 in order to be able to carry out registrations.”
Finance Minister Christian Lindner (FDP) said on Sunday evening in the ARD program “Report from Berlin” that it had always been clear that the environmental bonus would expire at some point. There was no fixed end date for the funding. “In this respect, there was never a guarantee of funding, but rather the expiration was clear.”
Funding introduced in 2016
In order to boost sales, the federal government at the time decided on a purchase bonus in 2016. According to an announcement from the Ministry of Economic Affairs and Climate Protection on Saturday, around ten billion euros have since been paid out for around 2.1 million electric vehicles. The funding program was very successful and significantly advanced electromobility in Germany.
According to Bafa, around 376,000 applications for electrically powered vehicles have been received so far this year and 2.4 billion euros have been paid out. The number of vehicles applied for has fallen compared to 2022. This is because since January 1, 2023, only battery and fuel cell-powered vehicles have been funded and no longer hybrid vehicles. In addition, since September 1st, only private individuals can apply for the environmental bonus. In 2022, 3.4 billion euros were approved for 820,000 vehicles.
Money is probably already tight
The Ministry of Economic Affairs rejected criticism of the quick end on Sunday. “We know that this is an unfortunate situation for those who had hoped to receive funding. But unfortunately this decision was necessary because there is no longer enough money available to be able to consider applications received after Sunday “, it was said.
According to ministry circles, the funds for 2023 have been used up. The 209 million euros scheduled for 2024 will probably only be sufficient if the funding expires with immediate effect. According to dpa information, around 1,400 applications are received for review every day, with an average funding of 4,000 euros. Each additional day of application submission could cost the taxpayer around 5.6 million euros. If applications had been stopped at the end of the year, funds of around 80 million euros would have been necessary.
Fear of crash
The transport policy spokesman for the CDU/CSU parliamentary group, Thomas Bareiß, fears that the end of the funding will cause the already sluggish sales figures for electric cars to crash. Many people would choose a combustion engine again in the future. The traffic light government is finally giving up on its goals for a traffic turnaround. “This is another serious setback for the German automotive industry and its more than 700,000 employees.”
“In our opinion, the budget crisis is driving the car industry in Germany into an electric car crisis,” said industry expert Ferdinand Dudenhöffer. He expects a decline of up to 200,000 electric car sales in Germany in 2024. Without subsidies, electric cars would be significantly too expensive for new car buyers. The ADAC complained that only three vehicles under 30,000 euros were available on the German market. “Manufacturers must also increase the range of cheaper vehicles,” said a spokeswoman.
