Higher e-car buyer's premium puts small manufacturers at risk

Small manufacturers of e-cars say their business could be threatened by the German government's increased buyer's premium intended to boost sales of electric vehicles, writes Spiegel Online. Half of the buyer's premium will be paid by the state and half by the car manufacturer – an amount that could tip the balance for smaller manufacturers, says the founder of e.Go, Günther Schuh. He says his company’s low-cost e-cars leave no margin for financing such a buyer's premium. "e.Go can't cross-finance the money with the sale of combustion cars like the big manufacturers do," Schuh says. In order to pay its 3,000-euro share of the premium, e.Go would have to raise the price of its 15,900 euro basic model by about 20 percent. Stefan Bratzel, director of the research institute Center for Automotive Management (CAM), agrees that the premium is a problem for smaller manufacturers, suggesting that carmakers selling models for under 20,000 euros could be exempt from it.

In a bid to boost sales of electric vehicles, the government has announced it will increase and prolong the buyer's premium for e-cars by 50 percent to 6,000 euros for cars costing less than 40,000 euros, and by 25 percent for more expensive cars costing up to 65,000 euros. The federal government aims to have up to ten million e-cars on Germany’s roads by the end of the next decade.