Germany to decrease Electric Car Subsidies in 2023

Germany will decrease the financial incentives to purchase electric cars in 2023 after an agreement within the governing coalition, as the growing popularity of the vehicles makes the government subsidies unnecessary.

The premiums, or incentives, paid to buyers of electric cars will expire completely once an allocated amount of 3.4 billion euros from the upcoming budget of two years has been spent.

Robert Habeck, the economy minister of Germany, said electric vehicles are becoming more and more popular and will no longer need government subsidies in the foreseeable future. Under the plan, the subsidies for fully electric vehicles have been priced below 40,000 euros and will also fall to 4,500 euros at the beginning of 2023 from 6,000 euros, and decrease by 3,000 euros in the following year.

For cars priced more than 40,000 euros, the premium will decrease to 3,000 euros at the beginning of 2023 from 5,000 euros currently. Subsidies for company cars are going to be eliminated, meaning only private consumers have been benefiting from the scheme.

The government of Germany will also cut incentives for plug-in hybrid cars at the end of 2023, something which the economy minister had advocated because of the doubts over the double-engine vehicle’s climate credentials as they are heavy and their battery-powered mode often lasts for only a short distance.