German Innovation Premium comes into force

In Germany, the Innovation Premium that spells out the doubling of the federal share of the Environmental Bonus for electric vehicles has come into force. The amended funding guidelines for the Environmental Bonus were published in the Federal Gazette, thus making it official.

The increased subsidy of up to 9,480 euros gross for electric cars (from 1 January 2021 with a VAT rate of 19 per cent 9,570 euros) can then be applied for at the BAFA. As planned, the new subsidy rate will also be granted retroactively for all qualified vehicles registered after 3 June this year.

Compared to the announcement in the Corona economic stimulus package, a provision has been added for (very) young used vehicles: qualified cars registered for the first time after 4 November 2019 – the date on which the previous increase in the Environmental Bonus was decided – and for the second time after 3 June 2020 will also be eligible for the subsidy. For BEVs and FCEVs the maximum amount is 5,000 euros, for PHEVs up to 3,750 euros. As with the new car regulation, the used car subsidy is only available for registrations up to 31 December 2021. Here, it must be said that the bonus is conditional: the subsidy for the young used car is only available if no application was made when the vehicle was first registered so that only one subsidy per vehicle is possible. “If several applications are made for the same vehicle, only the first application is decisive,” the Federal Gazette states.

The Innovation Premium is based on the results of the coalition committee of 3 June 2020. At that time it was decided that the federal share of the environmental bonus should be doubled while the manufacturer’s share remains the same. For the BEV and FCEV, up to a basic net list price of 40,000 euros, this results in a net subsidy of 9,000 euros; up to 65,000 euros, the subsidy is 7,500 euros. PHEVs are subsidised up to 40,000 euros with 6,750 euros net, up to 65,000 euros net price it is 5,625 euros. The German Federal Ministry of Economic Affairs writes in the joint memorandum with BAFA (Federal Office for Economic Affairs) that the EU Commission has examined the Innovation Premium in terms of state aid law.

“We are doubling the state’s share in the purchase of an e-car and thus creating a clear incentive for consumers to buy an e-car,” says Federal Minister for Economic Affairs Peter Altmaier. “In this way, we want to drive forward the switch to e-cars and give a new boost to electromobility in Germany.” BAFA President Torsten Safarik added that BAFA would implement the new premium “efficiently and in a citizen-friendly manner with the lean one-step procedure”.

bmwi.de (in German), bundesanzeiger.de (announcement in German)