FILE PHOTO: German Finance Minister Olaf Scholz attends a media briefing during his visit to Beijing, China, January 17, 2019. REUTERS/Thomas Peter
BERLIN (Reuters) – German Finance Minister Olaf Scholz plans to extend tax incentives for electric company cars, he told a newspaper on Saturday, the government’s latest attempt to boost demand for clean vehicles.
Germany is trying to increase electric car sales in the wake of a diesel emissions cheating scandal that has engulfed its auto industry in the last three years.
“Half of all cars sold in Germany are company cars,” Scholz told the Frankfurter Allgemeine Sonntagszeitung.
“So I have decided that we will not end tax support for electric cars and plug-in hybrid company cars in 2021 but extend them maybe over the whole decade,” he said, adding that would help improve air quality and meet climate goals.
He added, however, that the rules for plug-in hybrids would be tightened, so that only cars that can travel on electric power further than they do today would be eligible.
Since January, drivers of electric company cars which they also use for private journeys pay less tax than they would for a vehicle with a combustion engine.
Government subsidy schemes have helped boost sales but even with rising demand, electric cars made up only 1 percent of new car registrations last year, according to the KBA motor vehicle authority.
The government has acknowledged it will miss its target of having 1 million electric vehicles on the road by 2020 by two years.
Reporting by Madeline Chambers; Editing by Gareth Jones