Does the government's buying bonus for electric cars in Germany make sense?
In April 2016 the federal government and the automotive industry agreed to subsidize the sale of new electric cars with an environmental bonus. It is supposed to boost demand for at least 300,000 electric vehicles. The automotive industry will shoulder half of the cost. To prevent a deadweight loss and unnecessary subsidies, the amount of subsidies will be limited in different ways. There was a particular emphasis on the subsidies targeting mass market cars rather than luxury cars, whose buyers aren't dependent on buying bonuses. The general public will benefit from the subsidies in a different way: as a boost to innovation in climate-friendly, clean and efficient means of transport.