Germany: Merkel cabinet approves e-vehicle subsidy measures

The cabinet of German Chancellor Angela Merkel has agreed on a €600 million subsidy program for electric and hybrid vehicles.

The move is aimed at helping meet national climate goals and boosting the e-car sector, which has been slow to take off in Germany.

As part of the planned incentive, customers would receive a €4,000 rebate when buying a new electric vehicle and €3,000 when purchasing a plug-in hybrid car, the government announced this week. In addition, buyers would also receive a 10-year tax break for new electric vehicles.

In addition, further incentives are planned to encourage companies to install charging stations at the workplace for employees. Employees who charge their e-cars at work would pay a reduced tax rate of 25%, for instance.

The government and auto manufacturers will share the costs of the rebate incentive, which will be granted until the government share of the €600 million runs out, or until 2019 at the latest, according to Clean Energy Wire.

Economy and Energy Minister Sigmar Gabriel said progress on electric mobility was necessary to secure the future of Germany’s car industry. “Growth in demand will trigger important and necessary investments along the entire value chain of electro mobility.”

While the government aims to have one million e-cars on the road by 2020, many experts have expressed doubt that it will reach the target.