Mercedes to extend footing of lost German EV incentives bill

Legacy OEM announces an extension to its scheme to cover the cost of withdrawn federal subsidies

Mercedes to extend footing of lost German EV incentives bill
Mercedes is hoping to lessen the immediate impact of German budgetary decision

German automaking heavyweight Mercedes has pledged to extend funding of a corresponding discount scheme on its BEVs to make up for the sudden withdrawal of state purchase price subsidies in late December.

In the aftermath of German subsidies for EV purchases abruptly ending, Mercedes, along with German peers VW and BMW, announced that it would make up the cost of lost incentives for consumers. Mercedes initially planned to offer this effective discount until the end of December, but will now continue the scheme through January.

Mercedes will pay both the manufacturer's share as well as the previously government-funded portion of the environmental bonus — or Umweltbonus, Germany's federal EV incentive scheme — for new EVs ordered, registered, or delivered up to 31 January. The firm also says it will pay the manufacturer's share of the tax credit on EVs ordered up until 31 January but not delivered or registered until after this date.

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Germany's EV consumer subsidy scheme came to an abrupt end after a ruling by the nation's high court forced the government to exclude the provision from a tightened budget for 2024.

The ruling meant that €60bn ($65bn) worth of tax credit funds were no longer available with little notice, as the environmental bonus came to an end. The scheme had offered up to €6,750 funded by the state and carmaker depending on the value of the vehicle.

"After the short-notice expiry of the environmental bonus on 18 December, Mercedes-Benz had, in addition to the manufacturer's share, also taken over the previous state share of the funding for orders that were ordered, approved and delivered by the end of 2023," the OEM says.

“Mercedes-Benz therefore is securing the establishing of electromobility after the abolition of federal funding and is giving its customers an important incentive to turn to the technology of the future,” the company adds.

"We wish to give our customers planning security, so we are continuing the funding of electromobility that was previously promised by the federal government for delivery of eligible vehicles into January," says Joerg Heinermann, head of Mercedes-Benz Germany.

German OEMs voiced their displeasure following the sudden end of the subsidy program, with legacy player VW accusing the government of leaving EV buyers "in the lurch".

December and January BEV sales figures are now expected to be significantly impacted. Mercedes, however, is as yet the only German automaker to reach into its own pocket to replace the withdrawal of government money going into 2024.

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