German transport minister plans massive increase of e-car subsidies – media report

Germany’s transport ministry plans to almost double e-car subsidies to achieve climate targets, but experts and NGOs criticise the plans as hugely expensive and ineffective, reports business daily Handelsblatt. According to an appraisal of the proposals by several research institutes for the government seen by the newspaper, minister Volker Wissing, a member of the pro-business Free Democrats (FDP), suggests that buyers of electric cars costing up to 40,000 euros receive 10,800 euros in government support instead of the current 6,000 euros – in addition to the carmakers’ premium of 3,000 euros. Vehicles costing up to 60,000 euros could receive 8,400 euros instead of the existing 5,000 euros, and subsidies would be extended until 2027. From the second half of next year, buyers would have to scrap a conventional car to receive the full support, according to the report. The ministry’s proposals also include more than 50 other measures to accelerate the shift to low-emission mobility, including research programmes for climate-neutral aviation, railway digitalisation, and support for public transport.

The transport ministry is under pressure because the notoriously laggard transport sector exceeded the government’s climate targets again last year. As a consequence, the transport ministry must tell the economy and climate ministry how it intends to close the gap, and the proposals are reviewed by a group of research institutes. The institutes said e-car subsidy costs could add up to 73 billion euros by 2027, and also forecast that 2030 transport emissions will even slightly increase over today’s levels under the proposals because the transport ministry is “too optimistic” in its assumptions of many measures’ climate effects. The economy and climate ministry already reviewed the institutes appraisal and said that “in any case, additional measures are necessary on a considerable scale,” according to the report. Environmental group Greenpeace lambasted the proposals as a "sinfully expensive gift to the car industry" that does "next to nothing for climate protection." The NGO instead called for more ambitious European CO2 fleet limits and taxes on large conventional cars.

Wissing’s plans are likely to trigger resistance within the federal government, which agreed in its coalition treaty to phase out all e-car subsidies by 2025, and allotted a total of 5.9 billion euros for the support payments. Greenpeace said the climate ministry, the Greens and the SPD "should reject Wissing's expensive bonus fireworks and demand a serious immediate programme from the transport minister."