Surge in EV demand blows past German government’s subsidy forecasts
The government expected its EV subsidy scheme to run through 2029 — it may be out of cash by the end of next year.
Germany's electric vehicle subsidy program is being depleted more rapidly than initially projected by the government. The €2.7 billion budget is expected to run out by the end of 2027, rather than the planned 2029, according to a document seen by WELT. The program's spending pace is outpacing government expectations, with the budget allocation adjusting without changing the overall program size.
The subsidy covers up to €6,000 per vehicle, which can subsidize around 800,000 vehicles according to government estimates. As of early October, BAFA had approved 100,000 applications and paid out over €430 million. If applications continue at the current rate, spending could reach €1 billion by 2026, exceeding the original €803 million budget for that year.
Environment Minister Carsten Schneider acknowledged demand exceeding expectations in October but assured buyers there's enough funding until 2027. However, the application process could pose risks due to long delivery times, as subsidies are granted after vehicle registration. Electric vehicle sales in Germany have surged, with over 94,000 new EVs registered in October for a record market share of 37%.
Experts believe the real challenge lies in a potential sharp drop in registrations once the funds run out, similar to the decline seen after the subsidy was discontinued in 2023.
Written by urgent.news from Politico EU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
