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Germany orders Tesla drivers to pay back EV subsidy

The cars were considered too expensive to qualify for the subsidy after the fact.

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It must be a real kick in the pants to receive almost $5,000 in subsidies for your electric car, only to be told that you have to pay it back. That's what some German Tesla owners are going through right now.

Germany's Federal Office for Economic Affairs and Export Control said in a statement on Tuesday that approximately 800 Tesla Model S owners who purchased their vehicles before March 6 must pay back a €4,000 (about $4,650) EV subsidy. An additional 250 owners who purchased the car won't receive the subsidy at all.

That March 6 cutoff date seems pretty arbitrary.

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In an effort to spur sales of electrified vehicles including EVs and plug-in hybrids, the German government offers a €4,000 subsidy for qualifying vehicles. To prevent the subsidy from being a handout to the well heeled, Germany will only subsidize vehicles with a base price under €60,000 (about $70,000). It should be noted that the German government only contributes half of the overall subsidy, with the remaining coming from the automaker itself.

The Model S has a base price low enough to qualify, but it was removed from the list of approved vehicles after the German government learned that the base model wasn't actually available in Germany. Both the government and Tesla tried to reach consensus on the issue, but the talks went nowhere.

Here's where it gets tricky. The subsidy still exists for Model S owners, but only customers who made their purchases after March 6, which is when Tesla proved that customers could, in fact, order and receive a sub-€60,000 Model S in Germany. That seems unnecessarily complicated, which sounds about right for Germany.

"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 in an emailed statement. "We are appealing [the German government'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."