The German government faced backlash after abruptly ending a program that supported electric vehicles, dealing a blow to an already struggling sector. This cancellation was due to a recent budget crisis faced by the government.
The Economy Ministry announced on Saturday that Sunday would be the last day for potential buyers to apply for the program, which offered thousands of euros in subsidies for each customer purchasing an electric car. A ministry spokesperson acknowledged this as an “unfortunate situation” for consumers hoping to benefit from the support but emphasized the lack of available funds.
Ferdinand Dudenhöffer, an automotive research expert, warned that this decision could have severe consequences. He expressed concerns to the Rheinische Post newspaper that the competitiveness of car manufacturers would be significantly affected.
The Handelsblatt newspaper cautioned that the program’s cancellation threatens Germany’s goal of boosting its electric vehicle fleet to 15 million by 2030. Since its inception in 2016, the program has distributed about 10 billion euros, supporting the purchase of approximately 2.1 million electric vehicles, according to the Economy Ministry.
The German government had set a goal of having 15 million electric cars on its roads by 2030, a key part of a strategy to clean up road transport while maintaining the country’s dominant position in the global car industry. However, the German automotive industry is facing challenges in transitioning to electric vehicles, partly due to a weak global economy and reduced demand levels. Additionally, the industry is experiencing stiff competition from local producers in China, one of its key markets.
Last month, Germany’s highest court ruled that the government violated the constitutional borrowing limit when it diverted 60 billion euros intended for pandemic support to a climate fund. This ruling created a significant gap in spending plans and led to turmoil within the governing coalition led by Chancellor Olaf Scholz.
After adopting an emergency budget for 2023, Scholz and his coalition partners engaged in weeks of discussions, culminating in an agreement on Wednesday regarding the 2024 budget.
