The federal government introduces draft legislation for tax incentives for electromobility, the electric car premium. In the run-up, the Ministry of Economics has already extended the purchase premium of 3,000 euros for plug-in hybrids and 4,000 euros for e-electric cars until the end of 2020.
For the most up-to-date information, we recommend our new, much more comprehensive article on the topic of electric car subsidies: What you should know in 2022!
updated article from 07.08.2019
So far, the funding programme of the federal government and the car manufacturers has not been able to significantly boost electromobility. Only around 100,000 applications have been submitted since its launch in June 2016. With currently around 150,000 electric vehicles, the declared goal of "one million electric cars by 2020" does not seem achievable. Despite the sobering figures, there are discussions about extending the funding programme.
In mid-February, the Federal Office of Economics and Export Control (BAFA) reported the 100,000th application for funding for an electric car. At first glance, this sounds like a successful funding programme. However, a closer look reveals that from June 2016 until summer this year, three times as many electric car buyers were actually supposed to receive a subsidy of up to 4,000 euros. This is because the target of 300,000 approved applications is clearly missed. Of the 600 million euros made available for the subsidy, no 150 million have been disbursed so far. It is extremely unlikely that the remaining millions will be spent by the currently planned end of the funding.
Electric car premium: LIST OF ELIGIBLE VEHICLES GROWS
When it comes to the causes for the lack of success, there is criticism of the automotive industry. The Federal Audit Office sees "too much influence of the manufacturers on the design of the funding guideline". Federal Minister of Economics Peter Altmaier criticises the carmakers, saying there is a lack of appropriate vehicles. At least Altmaier's claim could be met by the industry this year and next. Currently, 158 vehicles are listed in BAFA's "list of eligible vehicles" (as of 31.07.2019). However, only vehicles withCO2 emissions of less than 50 g per kilometre are still eligible for plug-in hybrids.
THE FEDERAL GOVERNMENT EXTENDS CONCESSIONS FOR E-CARS
The Federal Government wants to promote climate-friendly mobility more strongly with extended tax relief for electric vehicles. To this end, the federal cabinet passed a corresponding bill on 31.07.2019. This law is to be passed by the end of the year.
Specifically, there are three key issues:
- The deadline for the company car privilege for e-cars is to be extended from the current 2021 to the end of 2030. As a result, since the beginning of this year, only half the tax rate is due for the private use of an e-car that can be externally charged for business purposes. This means only 0.5 instead of 1 percent of the list price.
- For purely electric delivery vehicles, there is to be a special depreciation of 50 percent in the year of purchase - in addition to the regular depreciation. This regulation is to start at the beginning of 2020 and apply until the end of 2030.
- In addition, the charging of electric or plug-in hybrid vehicles at the employer's premises is to remain tax-free beyond 2020 and even be extended until the end of 2030. This should also apply to the temporary provision of a company charging device for private use.
NATIONAL PLATFORM RECOMMENDS CLIMATE LEVY
The draft report of the National Platform "Future of Mobility" recommends continuing to economically support the demand for electrified passenger cars - by extending the electric car premium and tax privileges. This should be financed by a levy on petrol and diesel vehicles or, as the platform writes: "By introducing a levy on the purchase of new cars with high specificCO2 emissions". This would also have a steering effect on the purchase of efficient vehicles, according to the authors. In addition, the programme for the construction of charging stations should be "significantly increased". We hope that these efforts and the e-car premium will bear fruit. The infrastructure in particular must continue to be significantly expanded before the broad mass of the population will consider switching over. In the future, however, there will be no way around electromobility!
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