Germany increases budget for environmental bonus to €2.5 billion

The German Federal Ministry of Economics and Climate Protection (BMWK) will increase the budget for the environmental bonus this year. It had initially earmarked 2.1 billion euros for this purpose in 2023. It will now be increased to at least 2.5 billion euros.

That is according to a report by Tagesspiegel. The ministry states: “To ensure predictability and security for consumers and the economy, the BMWK will increase the funds for 2023 by at least 400 million euros.” However, the ministry also says that 1.72 billion euros have already been spent as of 3 July. That means that more than two-thirds of the budget has already been used up, even including the increase. It should be noted, however, that the environmental bonus for commercial vehicles will be discontinued in September.

The additional funds for the environmental bonus come from the BMWK’s current budget, says Tagesspiegel, with reference to the ministry. They became available through internal reallocations. “This means that a good solution has been found for the continued payment of the environmental bonus this year,” the ministry said.

Subsidies, which were reduced at the beginning of 2023, will remain unchanged in the current year. The Handelsblatt reports this, quoting Bernd Reuther, transport policy spokesman for the FDP parliamentary group: “I see it as the manufacturers’ duty to offer cheaper cars.” If the state subsidised prices permanently, the carmaker would have no incentives to lower them.

The Green Party agrees. “It is important to enter into dialogue with the manufacturers so that not only large cars but also small and medium-sized cars are produced at favourable prices,” says the party’s transport policy spokesman Stefan Gelbhaar.

To put this into perspective: The government received 146,692 applications for the environmental bonus in the first half of 2023. Only purely electric vehicles are still eligible since the beginning of the year. Since only EVs with a net list price of less than 65,000 euros are eligible, and there is also no obligation to apply, meaning the number of applications is not equivalent to the number of registrations. According to KBA statistics, 220,189 electric cars were newly registered in the first half of the year.

Since the start of the environmental bonus, BAFA has received 2,012,309 applications – 1,206,971 for pure electric vehicles (i.e. BEVs), 804,882 for plug-in hybrids and 456 for fuel cell cars.

tagesspiegel.de, handelsblatt.com (both in German)