Growth in public backing for electric vehicles sixfold in 2020
In response to stringent EU fleet-wide CO2 emissions reduction mandates, Germany significantly increased funding and incentives for electric and hybrid vehicles in 2020. The surge in EV applications, infrastructure development, and corporate strategies can be attributed to a combination of regulatory pressure, corporate fleet electrification, and consumer and industry support.
The European Union's requirement for automakers to reduce fleet-wide CO2 emissions by 15% compared to 2019 levels has strongly incentivised German automakers to accelerate electric vehicle (EV) production and sales to avoid hefty fines. Corporate buyers, who account for about two-thirds of car sales in Germany, played a crucial role in fleet electrification, with German automakers offering attractive leasing deals and lower prices to boost EV uptake by businesses.
To stimulate both supply and demand in the EV sector, the German government provided broad incentives including tax relief for electric vehicles and support targeted particularly at small and medium-sized enterprises involved in EV manufacture or operation. As a result, the number of battery-powered vehicles applied for increased from around 51,000 in 2019 to over 126,000 in 2020, with a total of 229,951 cars being applied to be promoted since the beginning of 2020, compared to 73,081 in 2019.
In November alone, applications were submitted for a total of almost 45,000 battery-powered vehicles and plug-in hybrids. The innovation bonus, introduced in July 2020, was decisive for the increase in funding for electric cars, offering up to 9,000 euros in bonus for purely electric cars with a net list price of less than 40,000 euros, and up to 6,750 euros for plug-in hybrids.
Despite the increase in funding for cars with alternative drives, there was no increase in the number of applications for fuel cell vehicles in 2020, with the number falling slightly from 73 in 2019 to 71 in 2020.
Looking ahead, Germany is focusing on infrastructure expansion and corporate incentives to sustain EV growth and meet future climate targets. The country has been steadily increasing publicly accessible EV charging points, reaching over 120,000 normal speed charging stations by the end of 2024. Germany plans to maintain and possibly expand incentives for corporate buyers through leasing deals and other financial mechanisms to continue driving EV market share growth.
German automakers and policymakers are also expected to continue prioritizing low-emission vehicles to meet increasingly strict EU CO2 limits beyond 2020, including exploring alternative powertrains like hydrogen fuel cells alongside battery electric and hybrid technologies.
In conclusion, the spike in EV funding in Germany around 2020 was driven by EU regulatory pressure and the need to electrify corporate fleets. While direct consumer subsidies have been scaled back, Germany is investing heavily in charging infrastructure and business incentives to sustain EV growth and meet future climate targets.
[1] EU CO2 emissions regulation:
[1] The European Union's CO2 emissions regulation has strongly incentivized German automakers to accelerate electric vehicle production and sales, to avoid hefty fines and meet the mandated emissions reduction targets.
[2] In response to stringent EU regulations, the German government has provided broad incentives, including tax relief for electric vehicles, innovation bonuses, and support targeted particularly at small and medium-sized enterprises involved in EV manufacture or operation.
[3] To sustain EV growth and meet future climate targets, Germany is focusing on infrastructure expansion and has plans to reach over 120,000 normal speed charging stations by the end of 2024.
[4] The surge in EV applications, infrastructure development, and corporate strategies can be attributed to a combination of regulatory pressure, corporate fleet electrification, and consumer and industry support, as strategies by German automakers have included attractive leasing deals and lower prices to boost EV uptake by businesses.
[5] To stimulate both supply and demand in the EV sector, the German government has provided support targeted particularly at small and medium-sized enterprises involved in EV manufacture or operation, which has contributed to an increase in the number of battery-powered vehicles applied for since the beginning of 2020.
