Germany's electric car subsidies spark Danish sales ploy

Bonus for plug-in vehicles is intended to transform Germany's flagship industry

A Volkswagen factory employee works on an electric car assembly line in Germany, which plans to overhaul its flagship industry. AFP

Germany has defended its €9,000 ($10,200) bonus for electric car buyers after claims that many of the vehicles subsidised by taxpayers are disappearing over the border into Denmark.

The Danish electric vehicle industry is celebrating a boom – plug-in vehicles made up more than half of car sales in the last month of 2021.

But insiders raised suggestions that Germany was unwittingly funding this via motorists who claim the money from Berlin, then cash in their subsidised vehicle north of the border.

Such a trade would undermine Germany’s aim of turning its flagship car industry electric and driving down greenhouse gas emissions in the carbon-heavy transport sector.

“The German treasury is actually helping to finance the green conversion of the car fleet in Denmark,” Christian Nolsoe Nielsen, chairman of Denmark's Electric Car Association, told the newspaper Finans.

“It is grotesque and must cost the German treasury a pile of billions,” he said, with figures suggesting about 30,000 electric cars were imported to Denmark last year.

Another analyst said it was easier for Danes to import an electric car from Germany than to buy one in Denmark, where incentives come in the form of more complex tax exemptions.

However, a spokeswoman for Germany’s economy and climate change ministry told The National that officials were not aware of large-scale exports of subsidised cars.

She said people who received the bonus could not sell their car for at least six months, except in exceptional circumstances. If it changes hands before that, the seller must pay back the bonus in its entirety.

In addition, the ministry regularly checks the status of the subsidised cars against a separate government database, she said.

Ministers want 15 million electric cars on Germany's roads by the end of this decade. AP

Robert Habeck, the economy and climate change minister, last month announced that the €9,000 premium would be extended for another year. There is a €6,750 bonus for buying a hybrid vehicle.

After that, stricter rules will be imposed with only the most environmentally friendly vehicles eligible for support.

“We will become more ambitious in future, in order to give a further push to electric mobility and strengthen climate protection,” Mr Habeck said.

Germany wants at least 15 million all-electric cars on its roads by 2030 and hopes to increase battery manufacturing at home. The number hit one million last August.

The target is part of the new coalition government’s plans to reach carbon neutrality by 2045.

In Denmark, a group of car importers said in an annual review that 2021 was the year when “the green transition in car sales really picked up speed”.

Although overall car sales were disappointing, traders were heartened by the purchases of more than 65,000 new rechargeable cars – a number which did not include used vehicles imported from Germany.

In December, electric and hybrid cars made up 58 per cent of sales – but Denmark’s charging infrastructure is not keeping pace with these developments, the association said.

Both countries are part of the EU, which has proposed an effective ban on petrol car sales by 2035. This is yet to be agreed by member states.

Updated: January 4th 2022, 2:12 PM