Germany to Reduce VAT on Electric Cars, and Increase Aid to Their Purchase

Germany confirmed the launch of a gigantic rescue plan for its automotive industry valued at € 130 billion. Within this project, the implementation for the first time of a VAT reduction on electric cars stands out. This will go from the current 19% to 16%, which in practice, will mean a reduction in the cost of an average model of about 1,000 euros.

This initiative will be experimentally active until December. From places such as the government of the powerful state of Bavaria, it has been positively criticized. Indicating its Prime Minister, Markus Soeder, that this will benefit sales of all categories of cars electrical.

At the same time, Germany will maintain its current purchase aid program, which involved the delivery of 6,000 euros. An amount divided equally between the government and the manufacturers. Now the new project will means an increase in aid from the government to 6,000 euros, keeping the 3,000 that brands have to contribute. Something that translates into the funding of 9,000 euros will be added to the cost reduction due to the lower weight of VAT.

Aids that Chancellor Angela Merkel has confirmed will not be able to access diesel and gasoline cars, which will only be eligible for the tax reduction.

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