German taxpayer association demands end to e-car subsidies following critical study

The German Taxpayers Federation is calling for an end to the high state subsidies for electric vehicles, news weekly Focus reports. The federation’s call follows on the publication of a study by Deutsche Bank showing that so-called buyer’s premiums for e-cars are not only primarily serving the wealthy, but also boosting the profits of car dealers that sell used vehicles abroad after their buyers receive purchase premiums. The subsidies are financed through taxes and fees that are also making fossil fuel increasingly more expensive. While seen as a key instrument in achieving the country’s ambitious climate protection targets by encouraging consumers to switch to e-cars, the subsidies are primarily used by the wealthy while being largely paid for by middle and low-income earners, the study concluded. Germany’s e-mobility support “is more or less a redistribution from poor to green”, Focus adds. "In general, people with a higher income currently make more use of government subsidies than people with a lower income,” the study states, adding that e-cars are often used a second car in a household or as a company car. All taxpayers, however, are financing the subsidies and the expansion of charging point infrastructure. The share of fuel costs in disposable income is usually higher for low-income earners than it is for households with high incomes, it adds.

Taxpayers in Germany sponsor every e-car through direct grants, such as purchase premiums and tax discounts over the life of the vehicle with more than 15,000 or even 20,000 euros, depending on the vehicle class, Handelsblatt reports, citing the same study. Germany’s e-car support programme “is proving to be hostile to innovation, ecologically questionable and socially unjust”, the newspaper adds.