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Germany lowers financial incentives to buy electric cars

Germany lowers financial incentives to buy electric cars

BERLIN (AP) — The German government plans to cut incentives for electric car buyers by the end of this year and end subsidies for buying plug-in hybrids.

The government had announced shortly after taking office in December that from 2023 it would only make payments for electric vehicles that “demonstrated a positive climate protection effect”. It revealed details of the new system late Tuesday.

Right now, electric-only buyers are eligible for government incentives of up to $6,000 ($6,100) and people who buy plug-in hybrids can get up to $4,500 ($4,570).

The economy and climate ministry said the number of electric cars on the road is increasing rapidly, with a total expected to reach nearly 2 million this year. They are “growing in popularity and will not require state subsidies for the foreseeable future,” said Secretary Robert Habeck.

From January, government incentives for electric and fuel cell cars will be reduced to Euro 4,500 each for vehicles with a list price up to Euro 40,000 and to Euro 3,000 ($ 3,045) for cars of Euro 40,000-65,000.

From September next year, the incentives will be limited to individuals, although the government is considering eligibility for small businesses and charities.

From January 2024, government incentives will be reduced to €3,000 for vehicles priced up to €45,000 and scrapped for more expensive cars.

Financing is also capped. Finance Minister Christian Lindner said on Wednesday that the government’s stimulus measures will end when the last €2.5 billion has been used up, leaving only tax breaks for buying climate-friendly cars after that.

“And I would add that in view of the multi-billion dollar profits of car companies, such subsidization is no longer necessary – I am counting on an impetus coming through the market to make electric vehicles cheaper, through competition,” he said. .

The government aims to have at least 15 million fully electric cars on the road by 2030. She also wants to step up efforts against climate change by expanding the use of renewable energy and bringing forward Germany’s exit from coal-fired power from 2038, “ideally” to 2030.

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