Germany ends electric-car subsidies, France excludes Chinese-made cars from its rebates

The German government will stop offering financial subsidies to electric-car buyers this week – while prospective owners across the border in France will no longer be able to purchase Chinese, South Korean or US-made electric vehicles at a discounted rate from 2024.

News agency Reuters reports the German electric-car subsidy will only apply to vehicles registered before 24 December 2023, effectively ending the incentive immediately – rather than at the end of 2024 as previously planned.

German business publication Handelsblatt reported the subsidy was worth €4500 ($AU7300) for electric and long-range plug-in hybrid vehicles which cost less than €40,000 ($AU65,000), and €3000 ($AU4875) for those between €40,000 and €65,000 ($AU105,600).

After partially funding the purchase of more than 1.2 million electric cars and almost 800,000 plug-in hybrid models, the German government reportedly spent approximately €10 billion ($AU16.25 billion) on the scheme since it was introduced in 2014.

As Germany axes its electric-car subsidy, France has announced heavier restrictions on the types of vehicles eligible for its rebates as of next year.

According to Reuters, only electric vehicles made in Europe will continue to be subsidised, heavily favouring French manufacturers such as Renault, Citroen and Peugeot – while affecting Chinese brands such as GWM and MG, and South Korea's Hyundai and Kia.

It comes amid a probe by the European Union into the low prices of Chinese electric cars on the continent, which European Commission president Ursula von der Leyen claims are "kept artificially low by huge state subsidies."

The new French rules will also result in the Chinese-built Tesla Model 3 sedan no longer being eligible, though the Model Y SUV – which is produced for Europe in Germany – will keep its rebate.

The publication reports the incentive – worth between €3000 ($AU4875) and €5000 ($AU8125) – results in about €1 billion ($AU1.62 billion) worth of spending from the French government annually.

Reuters reports approximately 65 per cent of electric cars currently sold in France will be eligible to receive the subsidy under the new conditions.

In Australia, Victoria axed its $3000 electric-car subsidy from July 2023, while New South Wales will repeal its $3000 rebate and free stamp duty offer on 1 January 2024.