Over the weekend, the German government made a surprising and abrupt decision to end its electric vehicle (EV) subsidy program, a move that contrasts sharply with France’s continued support for EV adoption. The announcement came on December 16, and by December 17, the government stopped accepting any new applications for the subsidy — leaving both automakers and potential EV buyers scrambling.
Fortunately, major manufacturers like Tesla, Volkswagen (VW), Mercedes-Benz, and Stellantis have stepped up to fill the gap, each pledging to support customers and maintain momentum in the country’s EV market.
Automakers Step In After Subsidy Halt
Tesla was among the first to respond. The company announced that it would cover the full subsidy for vehicles ordered from December 18 and delivered by December 31. However, Tesla has not yet confirmed whether the support will continue into 2024, suggesting that the subsidy assistance might end with the year.
Mercedes-Benz also issued a statement affirming its continued commitment. For orders placed up until December 31, Mercedes will maintain its manufacturer’s contribution of $2,640 and, for deliveries between December 18 and December 31, will also pay the government’s share. Starting January 1, 2024, Mercedes will return to covering only its portion of the subsidy as originally planned for 2024.
Volkswagen (VW) has taken a generous approach as well. The company confirmed to Reuters that it will cover both the manufacturer’s and government’s shares — up to $7,910 — for vehicles ordered before December 15 and delivered or registered this year. For EVs registered between January 1 and March 31, VW will contribute $5,300, reflecting the lower subsidy that was initially planned for 2024 before the government’s cancellation.
Stellantis Extends Full Support to EV Buyers
Among the most notable responses comes from Stellantis, which has announced that it will cover the full EV subsidy across all its brands until December 31. This includes popular models from Peugeot, Opel, Citroën, and Fiat, among others.
In addition, Stellantis plans to offer a reduced subsidy for customers who register their vehicles by February 29, helping ease the transition after the abrupt end of the government program. This move underlines Stellantis’s strategy to maintain competitiveness in the German EV market while reinforcing its long-term commitment to electrification.
The Road Ahead for Germany’s EV Market
The sudden removal of government EV incentives has raised questions about the sustainability of Germany’s electric vehicle growth. For years, the subsidies have played a crucial role in making EVs more affordable and accelerating adoption.
Now, as Stellantis, VW, Tesla, and Mercedes temporarily shoulder the cost, the market will reveal whether EV demand in Germany can sustain itself without government aid. The coming months will provide valuable insights into whether the surge in EV sales was primarily subsidy-driven or fueled by genuine consumer interest in cleaner mobility.
