Germany Offers $1.4 Billion In Incentives For Buyers Of Electric Cars

Apr 28, 2016 04:00 AM EDT | Vanessa Doctor

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Germany is encouraging drivers to invest in eco-friendly vehicles. A new incentives scheme valued at around $1.4 billion will be launched with the objective of introducing 1 million electric cars on German roads by the year 2020.

"With this, I believe we will be able to give a boost to quickly move the number of vehicles (sales) to a considerable level," Finance Minister Wolfgang Schaeuble said.

Transport Minister Alexander Dobrindt stated that they are planning to sell 400,000 more electric cars to reach their target figure by the end of the decade. The costs of the incentives will be allotted evenly within the government and carmakers.

Reuters says that the incentives plan was agreed upon by government ministers and representatives of Volkswagen, BMW and Daimler on Apr. 27, 2016. The scheme provides that buyers of electric vehicles will receive a discount of 4,000 euros, while buyers of plug-in hybrid cars will enjoy a discount of 3,000 euros.

Germany is currently the largest auto market in Europe. However, there are only about 50,000 fully battery-powered and plug-in hybrid vehicles in the country. At present, there 45 million cars on German roads.

Bloomberg reports that part of the budget will be allocated to the creation of charging stations, beginning in May 2016. Minister Schaeuble said that 300 million euros have been prepared for the project. The German government wants the construction of a nationwide charging network to happen quickly to further encourage sales of green cars.

He also said that the German government is expected to introduce more benefits to buyers of electric cars like tax incentives. Luxury carmakers might find it difficult to avail of the benefits because vehicles priced at over 60,000 are disqualified.

Analysts and ministers stated that the decision and timing to launch the incentives programs is proper, considering how other nations are also pushing to bring more eco-friendly vehicles on the streets for many good reasons. Countries like the United Kngdom, Norway, France and the Netherlands have already started their own incentive programs. The project will also create and secure more jobs in the country. However, there are also critics who claim that higher generation of electricity will cause a rise in carbon dioxide emissions. Others say that the funds would have been better spent on the promotion of new technologies.

If the German parliament’s budget committee approves the plan, the incentives scheme can launch in May 2016. More updates and details are expected soon.

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