Merkel inspires calls to spend unused €200m from unpopular EV bonus scheme on charging points

17 August 2017

Following a sluggish uptake of electric vehicles (EVs) in Germany and a lack of interest in its €4,000 purchase incentive scheme, the country is set to miss its target of having one million EVs on its roads by the end of the decade. As a result, a federal head has called for the unspent cash to be redirected to a root cause of the issue: a lack of charging points.  It comes as Chancellor Angela Merkel has said that Germany must do more to improve its EV charging network, with a roundtable meet planned for 4 September.

Merkel on Wednesday vowed to speed up Germany’s transition to EVs. Six weeks before Germany’s federal election, Merkel said previous comments suggesting she had abandoned the 2020 1m EV target had been misinterpreted. Instead, she says she meant more had to be done to meet the target.

The diesel summit earlier this month and the growing pressure for Germany AG to improve its reputation following Dieselgate is likely behind this apparent redoubling of efforts.

In response, the head of the German government’s BAFA (Federal Office for Economic Affairs and Export Control) has asked the federal government to use the money that is not claimed for the EV incentives, which run until 2019, to establish private and commercial charging stations. 

Andreas Obersteller said: ′In view of the low number of applications, we will not be able to make full use of the funds available to us for the purchase of the electric car by mid-2019. Of the €600m for incentives, up to €200m could flow into the development of the charging point infrastructure.’ 

There are currently only around 35,000 EVs on German roads – well below comparable EU countries such as France and the UK, with the latter having 108,000 plug in vehicles registered by August 2017, according to SMMT data. 

This is a welcome proposal, with a lack of enthusiasm among German consumers for EVs being a headache for German OEMs looking for early indications of potential return on investment from their heavy EV spending. There are many factors behind this including low driving ranges, high list prices and too few charging points. The first of these issues is up to OEMs to address, with the latter now entering the spotlight for intensified government action. The difficulty in installing charging points for commonplace German mid-rise flats also continues to be a problem. 

As a result, Obersteller’s BAFA, which distributes the incentive funds, has so far only been able to allocate a fraction of the total €600m provided for the scheme by the federal government. 

Obersteller’s proposals would mean that anyone applying for the EV purchase bonus in the future could also then receive a state subsidy for the installation of a charging point at their house or company.

As part of her election campaigning this week, Chancellor Merkel said greater efforts needed to be made quickly to build a network of EV charging points across the country, including retro-fitting them to street lamps and in car parks.

This new initiative would involve inviting local government partners to a roundtable meeting on 4 September in a few weeks to discuss issues surrounding toxic vehicle emissions and ways to combat it. She said that a fund of €500m or more would be created to improve urban transport infrastructure, including furthering these efforts.

Pressure is mounting following the diesel summit in Berlin earlier this month to realise significant falls in air pollution levels to prevent diesel bans and legal action, with EVs forming a crucial part of the solution. The DUH German environmental lobby has warned that the software updates, buying premiums for more modern cars and the city mobility fund agreed at the summit would only realise less than a 5% reduction in NOx levels – and that much more drastic action still needs to be taken.