Tesla Reacts To Loss Of German EV Subsidy With Own Compensation Plan For Buyers

EV giant Tesla Inc TSLA said on Monday that it will compensate new vehicle buyers in Germany to compensate for the lack of government subsidy. The announcement comes on the heels of the European nation terminating its subsidy program ahead of time.

What Happened: Germany’s government on Saturday ended its EV subsidy program owing to a budget crisis.

Tesla responded to the termination of subsidies on Monday with its own incentivization plan.

“To continue supporting the transition to sustainable energy, Tesla will compensate for the termination of the government EV subsidy in Germany for new Model 3/Y orders (starting 18 Dec for vehicles delivered by 31 Dec). We will also maintain the manufacturer's share of 2250€,” the company wrote on X, to much applause.

Germany’s EV subsidy had been up to EUR 6,750 (about $7370), of which EUR 2,250 is borne by the automaker. It was originally intended to be applicable until the end of 2024.

The U.S. Subsidy Scene: In the U.S., variants of Tesla’s cheapest vehicle- the Model 3- will not be eligible for a federal EV tax credit of $7,500 beginning in 2024.

However, the Model 3 Performance version, all versions of the Model Y and the Model X Dual Motor all-wheel drive continue to be eligible for a full tax credit.

Photo by Hadrian on Shutterstock

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