Savings program - Habeck's ministry causes displeasure at traffic lights with abrupt end to e-car bonus
The German government did not hesitate for long with the planned earlier end of the state purchase premium for electric cars and discontinued the environmental bonus at the weekend. This decision by the Federal Ministry of Economics has caused outrage - and a new dispute within the coalition. On Saturday, the ministry announced that applications for the incentive bonus could only be accepted until midnight on Sunday. The reason for this was budget constraints. The SPD criticized the short-term end as "extremely unfortunate" and called for an interim solution.
The ministry's move relates to the so-called environmental bonus, through which buyers of e-cars could receive several thousand euros in subsidies from the state on application. In their agreement on the 2024 budget last week, the coalition leaders decided to phase out the subsidy. However, the fact that the ban on applications was to take effect on Sunday came as a surprise to many.
SPD parliamentary group criticizes Robert Habeck
Last Wednesday, the traffic light coalition of the SPD, Greens and FDP reached an agreement on how to plug billions of euros in gaps following the Federal Constitutional Court's budget ruling. This affects the core budget as well as the Climate and Transformation Fund (KTF), which is also used to finance subsidies for e-cars. According to the ministry, the e-car subsidy was originally due to expire at the end of 2024 - or before if the funds are used up.
The SPD parliamentary group in the Bundestag supports the premature expiry of the funding. "However, we find the funding freeze on December 17, which was announced at short notice on Saturday, extremely unfortunate," three deputy SPD parliamentary group leaders told the German Press Agency. On Sunday, the deputy leaders of the SPD parliamentary group Detlef Müller, Matthias Miersch and Verena Hubertz called on Federal Economics Minister Robert Habeck (Greens) to "organize a more reliable transition". Most people would have to "calculate very carefully how they can afford it when buying a new car and have certainly factored in the premium".
The Ministry of Economic Affairs immediately rejected this: there is no money for a transitional solution. A ministry spokesperson conceded that the expiry of the subsidy created an "unfortunate situation" for all those who had counted on a premium. However, the short-term expiry of the funding program had become necessary "because there is no longer enough money available to consider applications received after Sunday". This situation is "a direct consequence" of the Federal Constitutional Court's budget ruling.
"All funds available in the 2023 financial year have been exhausted"
However, funding that has already been promised is not affected by the end of the funding and will be paid out. Applications received up to and including December 17 will be processed in the order in which they are received and - provided the eligibility requirements are met - approved, the ministry explained.
The decision to end funding at short notice was "jointly determined" with the Federal Chancellery, a ministry spokesperson emphasized on Sunday. "We therefore reject the one-sided criticism of this." According to ministry sources, the accusation of "one-sided criticism" also referred to the critical statements from the SPD parliamentary group in the Bundestag.
According to Habeck's ministry, "all funds available in the 2023 financial year have already been exhausted". The funds of 209 million euros still earmarked for 2024 "will only be sufficient if the funding ends with immediate effect".
FDP takes Habeck's side
According to AFP information, around 1400 applications were recently received every day, with an average funding amount of 4000 euros. This means that every additional day of applications costs the state around 5.6 million euros. If applications had been stopped at the end of the year, as had initially been expected, additional funds of around 80 million euros would have been required.
Habeck's ministry received support from coalition partner FDP. FDP parliamentary group leader Christian Dürr told the Funke newspapers that it was "right that this costly funding should end earlier than planned". This would "contribute to the urgently needed consolidation of the federal budget".
Industry expert Ferdinand Dudenhöffer, on the other hand, warned of dramatic consequences for the German automotive industry. "The competitiveness of manufacturers will now be severely damaged," Dudenhöffer told the Rheinische Post newspaper. Without high investments in electric cars, the German industry would lose decisive advantages: "The Chinese are massively expanding their car industry because they have customers. Our manufacturers no longer have any."
CDU criticizes traffic light
The CDU accused the traffic light government of leaving tens of thousands of car buyers in the lurch. Vice faction leader Ulrich Lange called for an interim solution in the Funke newspapers. With the short-term stop to the state purchase premium for electric cars, the traffic light government was "once again causing its typical subsidy chaos" and destroying trust.
In order to boost sales, the then German government decided on a purchase premium in 2016. According to the Ministry of Economic Affairs, a total of around ten billion euros has since been paid out for around 2.1 million electric vehicles via the environmental bonus. With this funding, the German government wanted to support its goal of putting a total of 15 million fully electric cars on the roads by 2030.
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The abrupt end of the state purchase premium for electric cars on Sunday caused displeasure within the traffic light coalition, with the SPD parliamentary group finding the decision "extremely unfortunate." This end to the environmental bonus was due to budget constraints and affected applications that were submitted up until midnight on Sunday.
According to the ministry, the e-car subsidy had originally been set to expire at the end of 2024, but budget constraints forced an earlier end. The SPD criticized the short-term end as unfortunate, calling for an interim solution.
The ministry's move related to the environmental bonus, which provided several thousand euros in subsidies for electric car buyers. In their agreement on the 2024 budget last week, the coalition leaders decided to phase out the subsidy. However, the ban on applications was surprising to many.
Detlef Müller, Matthias Miersch, and Verena Hubertz, deputy leaders of the SPD parliamentary group, called on Federal Economics Minister Robert Habeck (Greens) to organize a more reliable transition, as many people had already factored in the premium when buying a new car.
The Ministry of Economic Affairs immediately rejected this, stating that there was no money for a transitional solution. A ministry spokesperson acknowledged that the end of the subsidy created an unfortunate situation for those who had counted on a premium.
According to the ministry, all funds available in the 2023 financial year had already been exhausted, making it necessary to end funding with immediate effect. The funds of 209 million euros still earmarked for 2024 would only be sufficient if the funding ended with immediate effect.
The FDP supported Habeck's ministry, with FDP parliamentary group leader Christian Dürr stating that it was right to end the costly funding earlier than planned. The CDU accused the traffic light government of leaving tens of thousands of car buyers in the lurch and called for an interim solution.
The then German government decided on a purchase premium for electric cars in 2016, with a total of around ten billion euros having been paid out for around 2.1 million electric vehicles via the environmental bonus. The German government hoped to put a total of 15 million fully electric cars on the roads by 2030 with this funding.
Source: www.stern.de
