From September 2023: Company cars will no longer be subsidized for e-cars

E-cars are more expensive to buy than combustion engines. In order to persuade vehicle users to buy an electrically powered car, there are federal subsidy programs. But they are subject to change. For example, company vehicles will no longer be eligible for funding from September 1, 2023.

From then on, according to the current funding guideline for the environmental bonus, only private individuals are entitled to apply. This regulation applies to purchased and leased vehicles. Not only companies, but all facilities with company cars are affected by the new regulation.

A third fewer e-cars than in 2022

The extent to which the withdrawal of state subsidy programs and the reduction in manufacturer premiums are having an effect is shown by the fact that more than a third fewer e-cars are currently being purchased than in the previous year. A major reason for this is the reduction in government subsidies and the reduction in premiums for many automobile suppliers.

Compared to 2022, the funding amounts were adjusted as follows at the beginning of 2023: For e-cars up to 40,000 euros net, there is only a subsidy of 4500 euros compared to the previous 6000. For vehicles with a purchase price of 40,000 to 65,000 euros net there will only be 3000 euros in 2023. The manufacturer subsidy also fell by half in 2023.

Boom month July is deceptive

If you look at the statistics of new registrations, you will stumble over the month of July: 48,682 e-cars (+68.9 percent compared to July 2022) ensured a previously unattainable market share for e-vehicles of 20 percent. However, there are also critical voices about this high number, pointing out that this number has something to do with the processing of pent-up orders. In addition, the delivery times for e-cars have decreased, since the chip crisis of the last few years has been overcome for the time being.

The Federal Ministry of Economics is closely monitoring developments and, as a precaution, has increased the funds for 2023 by over 400 million euros. The measure makes sense because of the 2.1 billion euros in funding for 2023, 1.72 billion euros were already paid out at the end of June. Of this, 630 million euros go back to applications from this year. The remaining amount has to do with vehicle applications from last year, which were mainly submitted at the end of the year (December, the peak month), in order to be able to still benefit from the high subsidy in 2022.

How are car manufacturers reacting with discounts?

Another factor influencing the development of new registrations of e-cars is the extent to which car manufacturers respond to demand with increased discounts. It was clear to the industry that the very strong demand at the end of 2022 also meant that the figures for 2023 would be weaker overall. On the other hand, in August it can be expected that commercial car buyers will try to take advantage of the subsidy for non-private individuals for the last time and thus ensure increased demand.

On the other hand, the automotive industry is looking forward to 2024 with a certain amount of concern, since from then on subsidies for private buyers will be further restricted, because only e-vehicles up to 45,000 euros (net list price for the basic model) will be subsidised. It is then primarily up to the industry to try to keep sales at a good level with additional purchase incentives.

Current industry discounts

Renault is currently making progress. The French carmaker is offering private buyers the full innovation premium of up to 7,200 euros for the Megane E-Tech Electric, Kangoo E-Tech Electric, Twingo E-Tech Electric and Zoe E-Tech Electric car models until the end of August 2023. Dacia is no slouch either. For all springs ordered online, there are only 7178 euros until the end of August. Germany's largest carmaker Volkswagen is offering an electric purchase premium of 6750 euros for its electric ID family (ID.3, ID.4, ID.5, ID.Buzz) until the end of August. Anyone who orders a model by then will also receive the promise that the vehicle will be delivered by December 31, 2023.