Germany may cancel plug-in hybrid car subsidy ahead of time

Germany's economy ministry hopes to end subsidies for plug-in hybrid vehicles early by the end of this year and reduce cash subsidies for electric vehicles by 1/3 from 2023, according to a person familiar with the matter.

The person familiar with the matter, who spoke on condition of anonymity, said the move is to use more subsidies for climate protection, and relevant government departments are currently discussing legislation. According to the proposal of the German economy Ministry, the subsidy for electric vehicles will be reduced from 6000 euros today to 4000 euros next year, and the subsidy will fall further to 3000 euros in 2024 and 2025. The German government also hopes to subsidize hybrid cars that have a "positive impact on the climate" from next year and stop subsidizing hybrid models by 2025.

The German auto industry opposes the plan to cut subsidies. Hildegard Mueller, head of VDA, a lobbying group for carmakers, said ending subsidies for plug-in hybrid models early would "endanger the development of electric vehicles and ignore the actual situation of German consumers." Plug-in hybrid models are in the vanguard of the transition to pure electric vehicles. Mueller also complains that the fact that subsidies are linked to the delivery time of vehicles creates uncertainty about whether buyers can get subsidies. Affected by supply chain problems, consumers often have to wait for months to pick up the car.

The proposal put forward by the Green Party-controlled Ministry of Economic Affairs has also prompted a counterattack from the pro-business Liberal Democratic Party (Free Democrats). Bernd Reuther, a spokesman for Lib Dem transport policy, said the ruling coalition should not deviate from its original subsidy program, as plug-in hybrids also help achieve climate goals.