Germany earmarks billions for electric cars, charging infrastructure

BERLIN — The German economy ministry wants to earmark 500 million euros ($567 million) from Berlin’s bumper stimulus package to support the roll-out of charging stations for electric cars, along with an additional $2 billion in subsidies for EV buyers, government sources said Tuesday.

Some 2.5 billion euros ($2.83 billion) will be specifically aimed at expanding electric vehicle infrastructure, and will be targeted at private users, including households and builders, the sources said.

Berlin aims to install about one million public charging spots by 2030, up from 27,730 currently, a key step in addressing consumers’ concerns about the driving range of battery-powered cars, which so far account for just 0.6% of vehicles on German roads.

It also addresses criticism from utility companies, including E.ON, which have called for support to households in addition to incentives for public chargers, which are 40-50% subsidised.

The ministry also suggested spending an extra 1.5 billion euros on supporting domestic battery cell production, which would more than double existing funds for that purpose, the sources said.

The remaining 500 million euros of the overall 2.5 billion euros should be earmarked for research and development, the sources added.

German Chancellor Angela Merkel’s ruling coalition is speeding up the implementation of its giant stimulus package with a special cabinet meeting on Friday, a government spokesman said, in light of devastating economic data.

Confirming an earlier Reuters report, government spokesman Steffen Seibert told reporters that the cabinet hoped to pass large parts of the 130 billion-euro ($147 billion) package during an extraordinary meeting on Friday.

Merkel’s ruling coalition sealed the stimulus package after marathon negotiations late last Wednesday to support the recovery of Europe’s largest economy from the coronavirus pandemic.

The cabinet is expected to pave the way for the agreed temporary cut in value-added tax worth some 20 billion euros, cash handouts for parents worth more than 4 billion euros and bigger incentives to buy electric cars worth over 2 billion euros, people familiar with the plans told Reuters earlier.

The coalition is also mulling increasing a climate protection surcharge on the motor vehicle tax for new cars from 2021 so that buyers of gas guzzlers such as large SUVs will pay much more, a draft law showed on Monday.

The new regulation would double the surcharge for buyers of new cars with carbon dioxide emissions of more than 195 grams per kilometer, the finance ministry’s draft showed. This would hit a lot of German luxury vehicles.

Buyers of smaller cars with carbon dioxide emissions below 95 grams do not face any additional surcharge while electric cars are totally exempt from any motor vehicle tax until the end of 2030, according to the draft law.

The cabinet plans were revealed after economic data showed that industrial output posted a record plunge in April as the coronavirus pandemic forced manufacturers in Europe’s largest economy to halt production.