4,000 Euro as a 'Gift'

The CDU and SPD Parties (as the coalition running the government) have agreed on paper to this idea of handing you (the German) up to 4,000 Euro if you'd just go and buy a new e-car.  It's not passed through the Bundestag yet and I suspect most Germans will laughing over the deal.

First, let's be honest.  There is one single e-car on the market in the range of 15,000 Euro (no-name brand from here in Hessen).  It's big enough for 2 folks and a dog.  Range is roughly in the 150-to-200 kilometer range but recharge time is a absolute 8-hour period. 

So you step up a notch to the VW E-Golf, which runs in the high 20's.  It's slightly more in range.  There's a couple from Mercedes and BMW that run in the 35k to 50k range.

Then you start to get up to the Tesla or E-Tron (Audi) but they run in the 45k to 75k Euro range. 

Now you arrive at the second cost issue....that charger in the garage or carport.  Most will check the pricing and find that the electrician will charge around 1.1k Euro on up to 1.5k Euro. 

So you line up a thousand Germans who are hyped to buy a new car in 2020.  There might be 20 who will do the test-drive and research, and maybe ten out of the thousand willing to spend that kind of money and live that type of lifestyle.

Lifestyle?  Well, you have to think ahead constantly....know what kind of charge you have with the car....anticipating some battery replacement in roughly four years (cost factor)....and limit yourself on long trips. 

If you look at the trend line and anticipated sales....2020 is looking like 40,000 e-cars sold as a minimum (it could go up to 50,000).  Presently, they are just now approaching 200k e-cars registered in Germany (summer 2019 numbers from the government).

Yes, I would anticipate that all of that group....the 40,000 2020 buyers....will go and take that step of getting the free 4,000 Euro deal from the government.  As for the small-time middle-class buyer?  No....it's not enough to convince them to take the step. The government would have had to offer up 10,000 Euro to really entice people.  In this case, if you make less than 20,000 Euro take-home pay....it would have made a difference to offer up 10,000 Euro as the enticement, and gone to the small E-Golf car.

So this is a 'bluff' of sorts by the Merkel government to say they are doing something for the environment, and make the environmentalists happy.   Yep, you got it.

I will add this.....Germans never turn down a free gift. 

Onto the bigger thrill....at some point in 2024, I would anticipate that Germany finally crosses the 1-million e-car point registered in the country.  But I also anticipate that 10-percent of those owners are shaking their heads after a year because it's just that easy to plan and use the car. 

The electrical rates increasing?  Well....that's also part of the hidden story.....Germans now pay the highest electrical rates of any EU country, so owning a e-car isn't going to be cheap in terms of energy charging, unless you went and put up 18,000 Euro worth of solar panels on the house and you charged with your own personal energy. 

Just something to think about.