Most Tesla Model 3s will be too expensive to qualify for new German electric car sales incentives. … [+]
Germany raised the incentives to buy electric cars and cut the sales tax on more fuel -efficient internal combustion engines (ICE), but increased taxes on gas guzzling SUVs and sports cars which will hit the profits of the big auto makers.
The measures were part of the German government’s 130 billion euro ($150 billion) stimulus package designed to pull the country out of the coronavirus-induced economic slump. The package included general sales tax cuts and money for local governments, and child allowances.
The buying incentives for electric cars were raised to an effective 9,000 euros ($10,000), but with a price ceiling of 40,000 euros ($45,000). This will exclude most Tesla Model 3s, the Model S and Model X. Pricey electric vehicles like the Audi e-Tron, Mercedes EQC and Jaguar I-Pace won’t benefit either. Electric vehicles likely to get a sales boost will include the Kia e-Niro, Hyundai Kona, Peugeot e208, the Honda e, and cheaper versions of the Volkswagen ID.3 which goes on sale in August.
ICE vehicles not able to achieve just over 41 miles per U.S. gallon, will not be eligible for a cut in sales tax to 16% from 19%. That means highly profitable ICE sports cars and SUVs will be taxed at a higher rate from January 1, 2021.
The stock market reaction from auto makers was mixed. The STOXX Europe 600 index slid 1.6%, while VW was barely changed at plus 0.2%, BMW declined 1% and Mercedes parent Daimler jumped nearly 4%.
