A third of electric car owners forgo VAT savings
In recent times, there has been a noticeable decline in the number of applications for Greenhouse Gas (GHG) quota funding for electric vehicle (EV) owners. This drop can be largely attributed to regulatory uncertainty and changes in emission standards that disrupt EV mandates, causing manufacturers and consumers to reassess their commitments and incentives for electric vehicles [2].
Additionally, shifts in policy focus or complexity in grant programs might reduce uptake. For instance, some states introduce or expand targeted funding but impose new requirements or market conditions that complicate access to such funding [1][3].
The impacts on the market are substantial. Reduced incentives may slow EV adoption growth, as financial support is a key factor in consumer decisions to purchase zero-emission vehicles. Automakers might also reevaluate design and production strategies, potentially delaying new EV launches or shifting toward alternative technologies because of weakened GHG standards and quota enforcement [2].
However, not all news is gloomy. State-level initiatives, such as those in Illinois, demonstrate continued but cautious investment in electrification with grants for electric trucks and requirements for EV charging infrastructure, signaling ongoing efforts to stimulate demand despite fluctuations in quota funding applications [1]. In places like California, proposals to "backfill" EV tax credits indicate attempts to stabilize or rejuvenate incentive frameworks, reflecting recognition that decreasing funding applications can hamper state climate goals [3].
Consumer attitudes also influence market dynamics. Surveys indicate polarization around EV purchases, even among demographics that generally support GHG reduction, which can affect funding program participation rates [5].
In the European context, the UBA (Federal Environment Agency) attributes the decrease in applications to strengthened bundling of larger quantities by service companies and the almost complete disappearance of notifications for individual vehicles or charging points by charging point operators [6]. Bonuses for GHG quota applications are often in the low double-digit range, and sometimes just above 100 euros [7].
The share of applications for GHG quota funding for electric vehicles fell from 75% in 2022 and 2023 to 64% last year [8]. Landwärme GmbH, the ADAC partner for the GHG quota, has filed for insolvency [9]. In 2024, almost as many applications were submitted for GHG quota funding as in 2023, but the market for electric vehicles grew by over 380,000 new registrations [10].
Despite these challenges, the UBA reports a positive development: charging points eligible for the GHG quota delivered about 50% more electricity in 2024 [11]. Any unused GHG quotas are subsequently marketed by the state [12]. Private customers cannot sell their GHG quota directly to the mineral oil industry, but must transfer it to GHG quota brokers [13]. Some electric vehicle owners choose not to apply for GHG quota funding because their saved CO2 is sold to the mineral oil industry in the form of emission rights via the THG quota [14].
In conclusion, the drop in GHG quota funding applications reflects regulatory and market uncertainties alongside variable consumer engagement, which in turn can slow EV market expansion and complicate climate policy objectives related to transportation emissions [1][2][3][5]. Efforts are being made to address these issues, with state-level initiatives and policy adjustments aiming to stimulate EV adoption and meet climate goals.
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