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Germany’s €600 million EV fund is barely used and Tesla buyers can’t access it

Last month, Tesla buyers lost access to EV subsidies in Germany after being accused of gaming the system.

Now a new report shows that the €600 million EV fund used to finance the subsidy has barely been used over a year into the program.

Since the program launched in the summer of 2016, the Federal Office of Economics and Export Control (BAFA) says that 46,897 electric car buyers submitted applications for the subsidy.

BAFA President Andreas Obersteller commented in an interview with Welt this week:

“For this program, a total of 600 million euros are available. To date, about 65 million euros are committed,”

Obersteller added that it looks like they might not even use the entire fund over the current planned period of the EV incentive program:

“Currently, there are some indications that the funds will not be exhausted by the end of the promotion in mid-2019,”

Despite money being available to encourage car buyers to choose EVs over gas-powered cars, Tesla buyers were blocked from the subsidy after media claimed that they were gaming the system to access it.

When Germany introduced its new plan to boost electric vehicle adoption through new incentives, including a €4,000 discount at the purchase, Tesla claimed that they were purposely left out of the program because of a cap for vehicles with a starting price of less than 60,000 € negotiated by the government and the German auto industry.

Tesla wasn’t being a crazy conspiracy theorist by claiming that German automakers had a hand in this since the government did indeed negotiate the structure of the incentive with German automakers because both public money and the automakers are paying for it.

In order to make the Model S eligible to the incentive, Tesla unbundled a bunch of standard features as an option in Model S in order to reduce the base price to 60,000 € negotiated by the government and the German auto industry before tax.

They made this move in November 2016 and year later, German car magazine Auto-Bild published a report claiming to now being able to see through Tesla’s “deception” and going as far as calling it “fraud” and “cheating”. They claimed that buyers weren’t actually able to buy a Model S without those options, something that Tesla denied.

The automaker said that they not only offer the option but that some vehicles were delivered without the features.

When the issue came up last month, Tesla again reiterated that it believes the German government “intentionally set” the incentive so that Tesla wouldn’t have access to it.

Now that the money is not even used, BAFA suggests redirecting some of the funds to other EV programs, like charging infrastructure.

Electrek’s Take

It’s not exactly surprising considering the state of electric vehicle adoption and production in the automotive hub that is Germany.

German automakers have now officially embraced EVs for the future lineups, but they were late to do so and now most of their currently planned electric car models are coming in late 2019 and 2020, when the program will be over.

Generally, the goal of an EV subsidy is to recognize that the electric car that a buyer chooses over a gas-powered car has a better impact on the environment which everyone benefits from so that should be represented in the cost since there’s no equivalent carbon tax to represent the true cost of the gas-powered car.

That’s true for a buyer going for a BMW i3 over a BMW 3 Series just as much as someone buying a Tesla Model S over any other gas-powered vehicle in the same segment.

So it’s kind of ridiculous to exclude Tesla with or without the unbundling workaround, especially since they have more than enough money left.

What could be interesting is the Model 3 arriving in Germany in volume on time in late 2018. The vehicle should technically be eligible for the subsidy and if it arrives in volume, buyers could take advantage of it and they could work through that fund rather quickly.

What do you think? Let us know in the comment section below.

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