The Federal Ministry of Economics plans to end subsidies for so-called plug-in hybrids – cars with a combination of electric and combustion engines – faster than the traffic light parties had planned in the coalition agreement.

This Thursday, the ministry wants to submit a draft guideline to the departmental vote, according to which funding for plug-in hybrids should end on December 31, 2022.

"Funding plug-in hybrid vehicles depending on the electric driving performance would have led to a disproportionate amount of effort and was therefore rejected," says a letter from Parliamentary State Secretary Michael Kellner (Greens), which is available to the FAZ.

Julia Loehr

Business correspondent in Berlin.

  • Follow I follow

The federal government is currently paying buyers of a hybrid vehicle a subsidy of EUR 4,500 if the car has a net list price of less than EUR 40,000.

For more expensive vehicles there is a subsidy of 3750 euros.

The subsidies were only increased by the previous black-red government in 2020 in order to boost vehicle sales.

Added to this are the subsidies from the manufacturers.

This is 2250 euros with a list price below 40,000 euros and 1875 euros above.

Registration date of the car is decisive

The proposal from the ministry of Robert Habeck (Greens) has not yet been agreed within the federal government.

Transport Minister Volker Wissing (FDP) had warned in February against "talking badly" about hybrid vehicles.

In principle, however, the Liberals should be more open to the abolition of subsidies than the SPD.

The specific design should also cause discussions should Habeck prevail with his plans.

The registration date of the car is currently decisive for the granting of the premium.

Depending on the model, however, there can sometimes be months of waiting.

Some people who have already ordered their car won't get it until next year and could then go away empty-handed.

According to the Ministry, a two-stage procedure with a reservation of the funding would involve a "disproportionately high effort".

In the coalition agreement, the SPD, Greens and FDP had agreed that from 2023 onwards only vehicles with a “demonstrably positive climate protection effect” should be funded.

This should be tied to the range that a car can achieve with its electric motor.

However, the officials in Habeck's ministry apparently do not consider this system to be practicable.

More than 585,000 applications in 2021

As far as the subsidy rates for purely electrically powered vehicles are concerned, they are to be gradually reduced from next year, as provided for in the coalition agreement.

According to the plans, the federal share should still be 4,000 euros in 2023, and in 2024 and 2025 it should only be 3,000 euros.

In addition, a “funding cap” is to be withdrawn for a total vehicle price of 65,000 euros “in order to continue to ensure social balance with limited funding and increasing numbers of applications,” as the letter says.

The minimum holding period for vehicles is to be increased from 6 to 12 months.

After 2025 there will be no more subsidies for the purchase of an electric car.

Last year, the number of applications for purchase premiums at the competent Federal Office of Economics and Export Control more than doubled compared to the previous year.

More than 585,000 applications were received last year.

The Eschborn authority paid out more than 3 billion euros.

This was almost five times as much as in the previous year.