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Report: Berlin sets e-car subsidy at 4,000 euros

Darko Janjevic (Reuters, dpa)April 27, 2016

The German government has made a deal with large carmakers to boost electric car sales, according to German public radio. Earlier reports had suggested the premium would be worth more.

A host holds up two kinds of electric car charging plug interfaces.Image: Getty Images/S. Gallup

The state plans to split the subvention cost fifty-fifty with the individual carmaker, Germany's Deutschlandfunk reported early Wednesday.

Government representatives reportedly forged the deal with major auto manufacturers at a closed-door summit in Berlin on Tuesday. The agreement aims to boost the electric car market with a series of measures, including the 4,000-euro ($4,521) premium for every buyer.

Earlier reports had expected the premium to be worth 5,000 euros.

The plan was expected be announced on Wednesday by three German ministers – Finance Minister Wolfgang Schäuble, Economy Minister Sigmar Gabriel and Transport Minister Alexander Dobrindt, according to the sources cited by the DPA news agency.

Even with key ministers backing the subsidy plan, the alleged cash incentive is bound to raise eyebrows in Berlin.

Previously, a group of politicians decried the idea of giving direct subsidies to car makers, with discontent mostly stemming from the ruling CDU party. Others rejected the idea of subsidies for luxury car models.

Aiming for million electric cars

The German government is prepared to spend up to a billion euros ($1.12 billion) during the next two years to boost the sales of electric cars and hybrids, sources told the DPA news agency ahead of the summit. Direct subsidies to car buyers would account for 600 million euros, and another 300 million would be invested in extending the network of fast-recharging stations. The remaining 100 million would go to other EV-related subsidies.

Transport Minister Dobrint had also proposed canceling the license tax on electrical cars for a period of 10 years. In addition, 20 percent of vehicles purchased by the federal government would have to be electric-powered.

As of January, there were 45 million cars in Germany, with only 25,500 pure electric vehicles and 130,000 hybrids. The government, however, aims to put one million electric cars on the road by 2020.