Germany is planning a huge subsidy programme to push consumers to electric cars

The FT reports that Germany is planning a huge subsidy programme to push consumers to electric cars. No doubt the climate change lobby will trumpet this as a move towards greener, cleaner transport. Which it is.  But the main driver of this policy is commercial pragmatism; Germany’s car industry is reeling from the loss of consumer trust following VW’s monkey business with emissions testing and the financial consequences of getting caught in the litigation loving US. It also realises that Tesla has taken the electric car from niche eco-zealot dream wheels to a mainstream object of desire.

The €1.2bns subsidy will be funded equally by the German state and the car industry and will not apply to cars costing over €60,000.00 which means that buyers of the Tesla S - which poses a real commercial threat to S Class Benz and BMW 7 Series sales - won’t get it.

This is a huge moment for the move to electric cars; this is the world’s biggest automotive industry using its own money to encourage customers to buy a type of car which it doesn’t currently build in huge numbers. This can only mean that there will be a raft of new EV and hybrid launches by the German marques in the next couple of years.

It’s also worth noting that Germany gets around a third of it’s electricity from wind and solar, so a big jump in German drivers charging their EVs overnight will provide excellent storage potential for all that electricity produced in the windy north at night. Germany will need to import much less oil for refining into diesel and petrol and German consumers will spend less on their transport. All that money stays within the German economy and the country cares much less about political events in the Middle East. Win win.

Read the story here.