Germany may end plug-in hybrid car subsidies by 2023, electric by 2025

Germany’s economy ministry wants to terminate subsidies for plug-in hybrid cars next year while continuing support for buyers of electric cars for a few more years at a decremental annual pace, sources at the ministry run by the ecologist Greens said on Thursday.

The government premium for electric car buyers will fall from 6,000 euros ($6,545) to 4,000 euros next year and 3,000 euros in 2024. It plans to end electric car subsidies by 2025.

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The Greens have said ending hybrid subsidies would free up funds for expanding solar, wind and hydrogen power.

Exploding energy prices, exacerbated by Russia’s invasion of Ukraine and pressure to ban all energy imports from Russia, have
added urgency to the government’s plan to double the share of renewable energy in Germany to 80 percent by 2030.

The VDA auto industry lobby group has criticized the plan to wind down the subsidies, saying it could derail the government’s target of having 15 million electric cars on the road by 2030.

The plan has also been criticized by the pro-business Free Democrats (FDP), who like the Greens are junior coalition partners in Chancellor Olaf Scholz’s coalition government led by his Social Democrats (SPD).

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