Germany Stimulus Plan Increases EV Incentives, Infrastructure

Rob Maurer

Germany Stimulus Plan Boosts EVs

As anticipated, the new stimulus package just announced by Germany has major ramifications for the automotive business within the country. Electric vehicle support has increased significantly, and EVs are receiving quite a bit more support compared to their internal combustion engine vehicle (ICE) counterparts.

For Tesla, the stimulus results in the price of the Model 3 in Germany going down by roughly 8%-10% depending on the trim. This price reduction should result in higher demand in 2020 and a demand pull forward from 2021. The two biggest changes are to Germany's federal EV incentive and value-added tax (VAT).

• Federal incentive for electric vehicles with a base price (before VAT) under €40,000 has doubled from €3,000 to €6,000. This will apply to every trim of the Model 3.

• Beginning July 1st, VAT will be reduced from 19% to 16% for the remainder of the year. This will result in lower prices for all Tesla vehicles in Germany, but this reduction will apply to ICE vehicles as well.

Screen Shot 2020-06-05 at 1.35.02 AM
Summary of pricing changes for Tesla's Model 3 in Germany

Additionally, Germany plans to spend €2.5B to support charging infrastructure and R&D. The stimulus plan implies that Germany will start to mandate the inclusion of electric vehicle charging stations at gas (petrol) stations. This is exciting news for EV proponents, but the full details of the plan are not yet available.

Germany also plans to implement small reductions in electricity pricing, and spend €9B to support the development of hydrogen infrastructure and technology.

Other Notes:

● The made-in-China Model Y has been listed for sale in China with the start of deliveries scheduled for 2021. The Long Range version has a base model list price of ~$68,000 while the Performance Model starts at ~$75,000.

Writing assistance by Pranshu Agarwal