Berlin brings back EV subsidies

German Environment Minister Carsten Schneider has welcomed a new raft of electric vehicle subsidies which he says will be a “major boost” for the country’s auto sector.

“This is a program with which we are doing something for the environment, for the automotive industry, but especially for families who otherwise couldn’t afford a new, environmentally-friendly car,” he said.

The new subsidies allow consumers to claim between €1,500 ($1,743) and €6,000 in government aid to buy an electric vehicle, with eligibility extending up to a maximum income of €90,000 for households with two children.

“[This is] a boost for our domestic automotive industry, which offers powerful electric cars,” said Schneider, adding: “This year, more and even more affordable models from German manufacturers will come onto the market.”

Germany‘s largest trade union, IG Metall, welcomed the news, with chairwoman Christiane Benner saying it was “only right that people on lower incomes receive higher subsidies.”

But environmental groups as well as Germany’s opposition Green Party have criticized the fact that the subsidies will also apply to plug-in hybrids — cars that run on both electricity and fossil fuels — and vehicles with range extenders.

“In practice, plug-in hybrids emit up to five times more CO2 and therefore offer hardly any climate advantages compared to conventional combustion engines,” said Jürgen Resch from the Environmental Action Germany (Deutsche Umwelthilfe or DUH) non-profit.

There has also been criticism from other sectors who fear that government subsidies for electric vehicles will have the effect of funneling consumers’ limited spending power into car purchases at the expense of other industries.

“This kind of government-driven consumer spending does more harm than good,” argued Jan Kurth, Managing Director of the Association of German Furniture Industry groups. “Consumers can only spend their money once,” he said.