The Federal Ministry of Economics wants to change the small print on the purchase premiums for electric cars.

Anyone who wants to keep the subsidy of up to 9,000 euros will have to keep the vehicle for at least twelve instead of six months.

The new regulation should apply from 2023, according to ministry circles on Wednesday.

Julia Loehr

Business correspondent in Berlin.

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The background is that some car dealers have developed a business model from the grants: They advertise that buyers can drive an electric car, such as a Tesla, for six months for free.

After the deadline, they buy the vehicle back from the customer at the original purchase price, less the government environmental premium.

The dealers then resell the car in other European countries, where the prices for used electric cars are sometimes higher than in Germany.

used market for e-cars

"It is not the purpose of the funding and the rules on the minimum holding period that subsidized cars are regularly resold to other European countries after the minimum holding period has expired," said a spokeswoman for Economics and Climate Protection Minister Robert Habeck (Greens).

The ministry is counting on the fact that the loss in value of an electric car after twelve months is significantly higher, making the business model of resale in other countries significantly less attractive.

At the same time, the regulation gives buyers enough flexibility to sell their vehicle domestically, according to Berlin.

"We also need a used market for electric cars in order to further help e-mobility make a breakthrough," said the spokeswoman.

The purchase bonuses for electric cars are among the most popular government grants.

According to the Federal Office of Economics and Export Control (BAFA) in Eschborn, which is responsible for the payment, the number of applications more than doubled last year to a good 585,000.

The authority has paid out more than 3 billion euros, almost five times as much as in 2020. According to the authority, around one million applications have been submitted since the start of funding in 2016.

For purely electric cars with a net list price of up to 40,000 euros, the federal subsidy is currently 6,000 euros.

In addition, there is the manufacturer's share of 3000 euros.

For electric cars with a higher list price, the federal government gives 5,000 euros and the manufacturer 2,500 euros.

The subsidies are lower for so-called plug-in hybrids, which also have a combustion engine.

According to the coalition agreement between the SPD, Greens and FDP, from 2023 onwards only vehicles that “have a proven positive climate protection effect” will be funded.

It should then be tight for plug-in hybrids.

By the end of 2025 at the latest, the purchase premium should be completely abolished, and electric cars should then be the standard.