France and Germany abandon electric cars while subsidies make them “almost free”

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Car buyers in Europe can now get their hands on a brand new electric vehicle for less than the typical cost of a mobile phone contract. Thanks to new generous grants, some are even free.

Buyers have invaded virtual showrooms in Germany and France – the two largest passenger car markets in the region – after their national governments tightened incentives for electric vehicles to boost demand. Their purchase subsidies are now among the most favorable in the world.

State support enables Autohaus Koenig, a chain of dealers with more than 50 locations in Germany, to announce a lease for the battery-powered Renault Zoe. In the 20 days following the launch of the offer, around 3,000 people asked questions and around 300 signed contracts.

“If we had more sales people, we would have sold more,” said Wolfgang Huber, sales manager of electric cars for the Berlin dealership, who posted a Facebook post asking customers to be patient. “We were expecting increased sales with subsidies, but this race really hit us. ”

Chancellor Angela Merkel and President Emmanuel Macron have sought to soften the impact of the coronavirus pandemic on the severely affected automotive sector. Sales in Europe picked up more slowly in Europe than in China or North America, prompting decision-makers to support the main sources of employment and economic activity.

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In France, sales of the Renault Zoe model are expected to double this year even as demand for gasoline vehicles has cratered. In the Netherlands, where the city of Amsterdam bans non-electric cars from 2030, a fund of 10 million euros ($ 11.4 million) to support purchases of electric vehicles was used in just eight days this month.

“There are currently many attractive offers due to higher subsidies, which is driving demand,” said Aleksandra O’Donovan, analyst at BloombergNEF. “The EU is pushing to decarbonize transport, and the coronavirus crisis has allowed them to speed up this. “

Using the best deals, drivers in Germany can rent an electric car from the Carfellows site for as little as 39 euros per month. (Representative photo) (REUTERS)

German subsidies of 9,000 euros per electric vehicle have boosted sales of Carfellows, a German car trade website.

“This is a golden moment for us,” said Rainer Westdoerp, spokesperson for the Berlin startup, who will begin Wednesday to offer leases of the battery-powered Smart EQ from Daimler AG for € 9.90 per month.

Carfellows withdrew a similar offer for the Smart model in June, after around 1,000 customers contacted within three days and the automaker was unable to supply cars quickly enough, said Westdoerp.

While the best deals – including Carfellows’ Smart offer – are usually for company car buyers due to benefits, including tax and risk discounts, private drivers in Germany can still rent a car electric on site for as little as 39 euros per month. In France, where the government has raised subsidies to 7,000 euros per car this year, customers can rent the Zoé from 79 euros per month.

(Read also: Car makers increase discounts to beat blues in coronavirus sales)

Buyers should read the fine print, as some offers come with additional one-time fees or deposits. And not everyone in Europe is spending more to speed up adoption of EVs, with the UK and Belgium having recently cut aid. China had planned to end its subsidies this year but extended them until 2022 in response to the pandemic.

But in general, the picture seems attractive to European buyers, since the continent is home to eight of the nine countries with the largest national purchase subsidies, according to the BNEF.

Governments will need to carefully weigh when to let these subsidies run out to prevent sales from falling off a cliff. But there will come a time when this will no longer be a problem, said O’Donovan.

“The drop in battery prices suggests that electric vehicles should be cheaper to buy than gasoline cars from the mid-2020s,” she said. “Once that happens, the market will accelerate even without subsidies. ”

This story was published from a news agency thread without text modification. Only the title has been changed.

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