New funding guidelines for plug-in hybrids will slow down development of electromobility

    Berlin, September 14, 2021

    Joint criticism of the VDA and VDIK of the proposal for a new funding guideline

    The German Association of the Automotive Industry (VDA) and the Association of International Motor Vehicle Manufacturers (VDIK) are critical of the stricter requirements for plug-in hybrid vehicles (PHEV) intended with the extension of the innovation bonus. As it became known, the Federal Ministry of Economics has proposed in a new funding guideline that from October 01, 2022, corresponding plug-in hybrid vehicles should only be eligible for the environmental bonus if they feature a minimum electrical-only cruising range of 60km. The preceding criterion of 50g/km maximum CO2 emissions is to be dropped and the minimum range to be increased to 80km as early as 01 January 2024.

    "We do welcome the extension of the innovation bonus in general. But the planned elimination of the CO2 criterion will slow down the ramp-up of electromobility in the short to medium term. A large number of plug-in hybrids  previously eligible for funding will become less attractive for customers. They may then decide in favor of a vehicle with a classic drive technology – which surely isn’t intended by politics. The technical challenge of increasing the minimum range to 80km can be solved in the medium term for the automotive industry. But also for this goal industry needs planning reliability, which is why we demand the deadline of early 2025 to be left unchanged," said VDA President Hildegard Müller.

    VDIK President Reinhard Zirpel added: "According to the current status, this would mean that around 50% of the plug-in hybrids offered by VDIK members would no longer be eligible for funding. This is a wrong signal especially when the electromobility market is just ramping up. Smaller and therefore cheaper vehicles are also affected by these stricter requirements."

    The tightening of minimum electrical-only cruising range to 80km by 01 January 2024 was originally planned to take effect a year later. This cut also contradicts the planning reliability that is important for the automotive industry. The fulfillment of this requirement is planned for many vehicles in connection with a model change, which cannot be brought forward by a year at will. With their flexibility, plug-in hybrids in particular represent an important component in the success of electromobility. In the first half of 2021 alone, plug-in hybrids accounted for more than 50% of newly registered vehicles with electric drives.

    Currently, electric plug-in hybrids are eligible for funding if they do not emit more than 50g/km of CO2 or reach a certain minimum electrical-only cruising range. The current regulations stipulate that this minimum range is 40km if purchased by 31 December 2021. If purchased after 31 December 2021 and before 1 January 2025, the minimum electrical-only range of the vehicle required to be still eligible for funding will increase to 60km and, if purchased after 1 January 2025, to 80km.



    Moritz Krause

    Spokesperson VDA Technics & Innovation

    German Association of the Automotive Industry (VDA)

    Phone: +49 175 3260991




    Peter Mair

    Head of Politics/Communication/Press

    Association of International Motor Vehicle Manufacturers (VDIK)

    Phone: +40 179 4819 575