The Only Way Forward? Germany Goes All-in on EVs

Germany isn’t fooling around anymore. Electric cars are going to become the norm, and that’s final.

After pledging last year to boost electric vehicle subsidies by 50 percent over the first half of the decade, Germany has doubled down on its EV efforts in the wake of the coronavirus pandemic. If you’re in the market for a gas-free car, expect the government to fill your pocket with cash. If you’re the buyer (or the maker) of a gas-guzzling SUV, look out.

Depending on which source you read, EVs made up only 1.8 to 3 percent of the country’s new car registrations in 2019, which is still better than most other countries. EV adoption was on the rise, even as overall new vehicle sales fell. Obviously, the pandemic will fudge 2020’s numbers.

Announced Thursday, Germany will foist a new tax structure on internal combustion vehicles, double the subsidy it hands to EV buyers, and foster the creation of electric vehicle charging stations in as many locales as possible. There’ll be no excuse not to own one, you hear?

It’s all part of a stimulus package worth nearly $146 billion. Per Reuters, vehicles that emit more than 95 grams of carbon dioxide per kilometre will see their motor vehicle tax rise come January 2021. That net captures plenty of vehicles, given that the average per-kilometre emissions of a German vehicle is more than 150 grams. In May, that level rose to nearly 155 grams. While the levels are not yet set in stone, the more a vehicle pollutes, the more it will be penalized.

In a bid to get more buyers into small German-built cars, the country will lower its value added tax on those vehicles from 19 percent to 16 percent. At the same time, government incentives for EVs will rise to more than $6,700 for vehicles costing less than $45,000. That subsidy combines with a manufacturer incentive worth nearly $3,400, pushing EV prices down considerable. Ritzier EVs with higher MSRPs will still see government spiffs, just not as lucrative for the buyer.

The country wants customers to walk into dealerships knowing they can drive away in an EV and plug in anywhere. Otherwise, the whole thing won’t work. Now, Germany has put up money to have all of the country’s gas stations install an EV charging station.

BDEW, the German Association of Energy, estimates that Germany hosted less than 28,000 EV plug-in points in March. To make EV ownership viable for all, there would need to be 70,000, it said. Pushing gas station to add a plug, if not a full-on fast-charge station, would boost that roster by more than 14,000.

Elsewhere in the broad plan are billions set aside to get diesel-powered buses (either privately or publicly owned) off the road.

[Image: Porsche AG]