Germany tells Tesla Model S buyers to pay back €4,000 incentives

Germany’s attitude towards EVs is complicated. The country’s main environmental priority is phasing out nuclear energy, so the government has heavily subsidized renewable energy - wind turbines and solar panels can be seen from Hamburg to the Black Forest. 

Above: Tesla's Model S (Image: Charged)

Electric vehicles, which seem likely to increase demand for electricity, are a different story. For years, the German government did little to encourage EV adoption, but in 2016 it introduced a program that offers a purchase incentive of €4,000 for eligible vehicles. In order to avoid subsidizing luxury cars for wealthy buyers (or to avoid subsidizing a certain American carmaker?), the program excluded vehicles with a starting price over €60,000. The details of the program were negotiated by the government and German automakers, which are providing some of the funding.

Tesla felt left out, and devised a way to reduce the base price of a Model S to €60,000, by unbundling a bunch of standard features and making them options. At first the Germans cried foul, and accused Tesla of gaming the system. The car mag Auto-Bild waxed particularly indignant about what it called Tesla’s “deception.” Then, in March, the Federal Office of Economics and Export Control (BAFA) clarified that Model S buyers were eligible for the incentive. Now, in an odd twist, BAFA has reversed its ruling, and is actually asking some Model S buyers to reimburse the government for incentives they already received.

Above: Tesla Supercharger station in Germany (Image: InsideEVs)

All customers who purchased a Model S in Germany before March 6, 2018 are affected – between 800 and 1,050 Tesla owners.

BAFA says that it tried unsuccessfully to resolve the issue with Tesla: “BAFA had given the manufacturer Tesla the opportunity to develop a solution proposal by the beginning of July 2018. The manufacturer did not make use of this offer. The talks with Tesla have unfortunately been fruitless. As a result, due to the requirements of administrative law and budget law, the buyback premium must now be reversed.”

Tesla is disputing the decision, and says that it will cover the costs to its customers. “The arbitrary decision to temporarily remove Tesla from the list of vehicles eligible for the Environmental Bonus (Umweltbonus) was unjustified, contrary to the stated goals of the program, and unfair to our customers,” said a Tesla spokesperson. “The fact that Tesla was included on the list, removed from the list, and then again added to the list is proof that this was a mistake. As our website demonstrates, anyone in Germany has always been able to order a base version Model S that was below the required price level, and we have delivered such cars to customers.”

Above: EV incentives offered in Germany compared with other EV policies in countries like Norway and China (Youtube: DW English)

“We are appealing BAFA’s decision to take this action against our pre-March 2018 customers. To make sure our customers are not harmed by this decision, we will cover the cost of the bonus for them until the issue is resolved.”

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Written by: Charles Morris; This article was originally published in Charged; Source: Electrek