Electric car while charging; Source: Fotolia.com/kasto

© Fotolia.com/kasto

The future of mobility is electric. For this reason, the Federal Government has decided to invest €1bn in subsidising electric mobility. Part of the support consists of a purchase grant for electric cars, half of which will be paid by Germany's car makers. On 27 April, Minister Gabriel said that the measures are intended to speed up developments on the market for electric mobility. The aim is to demonstrate on German industry's home market that this form of propulsion can go into mass production in Germany. The funding is tied to an expectation that the industry will respond to the development on the market.

The main points of the agreement are as follows:

  • A purchase grant will be paid. For electric-only cars, €4,000 will be paid, with €3,000 available for plug-in hybrids. The grant will be paid towards purchases of cars with a list price of up to €60,000. The total funding is limited to €1.2bn. The Federal government and the automotive industry will each cover half of the costs.
  • The Federal Government is providing €300m towards expanding the recharging infrastructure. Approximately €200m is available for the rapid charging infrastructure, and €100m for normal charging.
  • The aim continues to be that at least 20% of the Federation's vehicle fleet should consist of electric vehicles. €100m has been earmarked for this.
  • If employees recharge their vehicles at their place of employment, this will no longer be deemed a taxable benefit in kind.

According to a decision by the cabinet, the measures are to take effect in May 2016. Looking beyond this, now is the right time to take the decisions for research into third- and fourth-generation batteries so that manufacturing can take place in Germany. The agreement on the purchase grant is linked to an expectation that spending by the industry on related research and development will be increased.