E-car subsidy: minimum holding period to be increased

As it appears that a considerable proportion of the electric cars newly registered in Germany, especially those of the Tesla brand, are sold on abroad after only a short time, the German government has decided to increase the minimum holding period required for the state subsidy for electric cars. This is to ensure that the approved e-cars are actually on German roads.

Every fourth Tesla exported?

The German Federal Ministry of Economics and Climate Protection already initiated a review at the beginning of the year regarding the possibility of extending the minimum holding period of subsidized e-cars. The reason for this was the assumption that a high proportion of newly registered vehicles are sold abroad shortly after the minimum holding period of six months. The Federal Ministry of Economics and Climate Protection assumed that the resale value of an e-car would have fallen so much after twelve months that resale abroad would be less attractive – and that the subsidy would thus be more likely to achieve its goal of sustainably increasing the share of e-cars on Germany’s roads.

The assumption that a considerable proportion of the subsidized vehicles are sold abroad relatively quickly is confirmed by the Schmidt Automotive Research Institute in Berlin. According to the study, 890,000 fully electric passenger cars were registered in Germany from January 2012 to July 2022. However, according to the Federal Motor Transport Authority, only 756,517 fully electric vehicles were registered on July 1, 2022. More than 100,000 vehicles must therefore have been deregistered. The data for Tesla is particularly striking: of 98,000 registered vehicles, only 76,690 were still registered in Germany. This means that almost every fourth Tesla vehicle has been deregistered. There are indeed incentives for export. In Denmark, for example, there is a luxury tax that has to be paid when buying a new premium-class e-car – and in some cases it is higher than the price of the vehicle. Here, exports would be worthwhile for both sides.

The Federal Motor Transport Authority counters that the statements made by Schmidt Automotive Research are pure speculation. The vehicles that no longer appear in the statistics do not have to have been sold abroad. They could also have been involved in an accident or simply taken out of service.

The Bergisch Gladbach-based Center of Automotive Management counters this with another statistic: Between January and September 2021, 236,695 pure electric vehicles were registered in Germany – a new registration record for e-cars was achieved in the year. In the same period, however, the inventory had increased by only 207,435 vehicles. So there is a gap of more than 29,000 vehicles here. In principle the objections of the Kraftfahrtbundesamt are however in no way invalidated thereby: Nowhere it is evident that the vehicles mentioned were exported; they could have been also set out of operation or scrapped. This is all the more true since it is not clear which vehicles are involved: The more than 29,000 missing e-cars do not necessarily come from the stock of newly registered ones. They may also be older models that have been on German roads for some time. The Center of Automotive Management’s estimate that up to 240 million euros in subsidies for e-cars were not used for their intended purpose in 2021 alone is thus on shaky ground.

12-month minimum holding periodo

Nevertheless, the German government has now decided to increase the minimum holding period required for the subsidy from six months to twelve months in the future. The change is to be implemented when the new subsidy guidelines come into force in 2023. In future, anyone who purchases an e-car and collects the subsidy sum will have to keep it for twelve months; otherwise, the subsidy sum will have to be repaid. However, the regulation still has to be reviewed by the EU Commission before it can come into force.