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Germany鈥檚 sudden cut of electric vehicle purchasing subsidies has caused carmakers to outdo each other with heavy discounts, . Tesla, the U.S. electric car company, cut the price for the basic version of its model Y by around 5,000 euros this week after Germany鈥檚 largest auto company, Volkswagen, reduced the price of its electric ID models by up to 7,700 euros. Dacia, a subsidiary of French carmaker Renault, slashed the price of its electric compact Spring by 10,000 euros. Italian carmaker Fiat and the Chinese brand BYD also cut prices significantly, according to the article.聽

In the wake of December鈥檚 agreement on savings to overcome the country鈥檚 budget crisis, the German government abruptly ended its electric car subsidy programme, leading to expectations of a slower transition to climate-friendly mobility. Previously, subsidies up to 4,500 euros were available for the purchase of a battery-electric car. The shift to battery-electric cars in Germany already lost steam last year when their share of new registrations only increased by 11 percent, around a third of the 2022 growth rate. Many industry experts expect that carmakers will not be able to reverse the present price cuts given increasing competition from Chinese brands, who are pushing into the European market with cheaper models which are often considered superior to European vehicles.

Drivers of electric cars can not only save money when they buy the vehicle, but also during its operation, according to by price comparison website Verivox. Average fuel costs for electric cars charged at home were on average 46 percent lower than those for a petrol-powered vehicle, and 38 percent cheaper than for a diesel car, Verivox said.