Germany’s Car Crisis: 465 Million Incentives Coming to Stimulate Electric Vehicle Sales
The German government has announced a package of fiscal stimulus to 465 million euros to boost electric car sales and combat the crisis in the automotive sector. The new measure, approved on September 4, provides for tax deductions of up to 40% of the value of electric vehicles in the first year, gradually decreasing to 6% by the sixth year. In addition, the tax benefit currently reserved for company cars up to 70,000 euros will also be extended to vehicles up to 95,000 euros.
As reported by Il Sole24 Orethe German car market suffered a sharp decline in August, with registrations falling to 197,000, a decrease of 28 percent. compared to the previous year. Electric car sales fell 69%, with overall demand declining. The electric car market share fell to 13.7%, compared to an average of 18% in 2023. Other fuel types also saw significant declines, with all major automakers reporting significant sales losses.
The German auto industry is showing increasing pessimism, with the Ifo business climate index falling to minus 24.7 points. Volkswagen, in particular, is undergoing a major restructuring and could close one of its plants in Germany.Volkswagen’s chief financial officer warned that the company has a year, two at most, to turn around after losing about 500,000 sales.
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