Electric Cars

Tesla disqualified from German EV subsidy program

Electric carmaker disputes that its Model S is not eligible for the incentive.

Tesla

Tesla's Model S has been removed from a list of cars eligible for a German subsidy program designed to jumpstart EV sales. According to news agency Reuters, the issue stems from the Model S eclipsing the 60,000 euro ($71,500) price cap set for the program, an issue that Tesla denies. Removal from the subsidy program means that Model S buyers are not eligible for a 4,000-euro ($4,750) subsidy for all-electric vehicles (plug-in hybrid vehicles receive 3,000-euro credits). 

According to the report, the German Federal Office for Economic Affairs and Export Controls says that a base-spec Model S cannot be ordered without equipment that pushes its price above the 60,000-euro threshold, a charge the automaker denies. Tesla notes that a special sub-60,000-euro Model S is available. In a statement released to Roadshow, the automaker said, "This is a completely false accusation. Anyone in Germany can order a Tesla Model S base version without the comfort package, and we have delivered such cars to customers."

That statement goes on to say:

"Every Tesla customer can order their car online and select whatever options they like. It is clear from that ordering page that a Model S can be ordered without the comfort package. If a sales person told a customer they could not buy the Model S base version without the comfort package, this is not accurate and clearly outside our policies and procedures and we will investigate and take appropriate action as necessary."

Just as Tesla indicated, I was able to configure a qualifying Model S on the company's German website (teslamotors.de) to come in under the 60,000-euro threshold. A base Model S 75 D with no-cost Solid Black Paint and no options rang up at 69,019-euro cash price, but stripping out the 11,090-euro Value Added Tax gives a price of 57,929 euro, just under the price cap.

This isn't the first time that Tesla and the German government has been at odds over this EV subsidy program. Back in 2016, the Silicon Valley automaker alleged that Germany authorities had set the eligibility price cap deliberately to exclude Tesla vehicles, a charge it repeated in its new statement to Roadshow:

"It's important to note that the incentive price was intentionally set by the German Government at a level that was specifically intended to prevent Tesla cars from qualifying for it. As a result, Tesla planned to make an appeal to the EU trade commission, as this was against EU rules. Instead, Tesla and the German Government agreed on an acceptable middle ground that allows Tesla to sell a low option vehicle that qualifies for the incentive and customers can subsequently upgrade if they wish. That is exactly what Tesla has done."

The outcome of this Model S dispute remains unclear, but even if the matter is not resolved in Tesla's favor, if the Silicon Valley automaker can ramp up production and distribution of its new Model 3 for Europe, it will certainly have a vehicle that qualifies for the program.