Is Germany About To Get Friendlier Toward Electric Vehicles?

The German government is considering increasing its support of the electric car industry, with the goal of having one million electric vehicles on the road by 2020. Efforts to back the electric vehicle industry could help Germany to comply with the European Union’s emissions standards, which stipulate reducing vehicle fleet emissions to 95 grams per kilometer by 2021.
 

Current government support
While some support measures for electric vehicle owners and researchers are currently in place, the German government has been criticized for the lack of sales incentives it provides to electric car manufacturers. Owners of electric cars in Germany receive tax breaks for emissions reduction, and researchers have received about $1.69 billion in project funds.

Electric car sales to date
In Germany, the high unsubsidized cost of electric vehicles, the lack of sufficient recharging infrastructure and the low cost of oil have hurt consumer demand for electric vehicles. Government incentives similar to the ones in place in Norway and the Netherlands would likely provide a tremendous boost to electric car sales in Germany, which totaled only 19,000 in 2014.

Providing start-up funds for electric vehicle sales is one proposed measure the government could take to encourage consumers to purchase electric cars.

Good news for Tesla?
If the German government decides to increase investment in electric cars, manufacturers such as Tesla Motors Inc TSLA would likely see a huge opportunity in Germany.

Up to this point, Tesla has struggled to reach its sales goals in Germany. According to German publication Manager Magazin, Tesla sold only 817 Mode S vehicles in Germany on 2014. Earlier in the year, Tesla CEO Elon Musk had projected that the company would be selling 1,000 cars per month in Germany by the end of 2014.

The government subsidies provided by the Norwegian government have played a big part in Tesla’s success there. Outside of the United States and China, nearly one third of Tesla’s revenue from the rest of the world in 2014 came from Norway.