Smart Subsidies, Not Blanket Checks: The Call for Socially Just E-Mobility Promotion
The transition to electromobility is arguably the most crucial step in decarbonizing our transport sector. However, who benefits from this green transition, and how public money is spent, is becoming a contentious issue. Following a major funding decision by the Federal Government to support e-mobility, a broad and powerful coalition—including environmental and social associations, business groups, trade unions, churches, and automobile clubs—is demanding an efficient and socially just use of taxpayer money.
In a joint paper released by the Climate Alliance Germany, this diverse alliance is appealing directly to the federal government: the funds must be used specifically to benefit people with low incomes, rather than being distributed broadly "with a watering can" (a term for widespread, untargeted spending).
This critique comes with a sharp condemnation of parallel government spending: while the transport transition demands careful resource allocation, billions are simultaneously being channeled into the construction of new motorways, even as essential public transport services face increasing cuts and thinning routes.
Learning from Past Mistakes: Why the Old Bonus Failed
The core of the alliance's argument rests on the negative experiences derived from the country's former environmental bonus for e-cars. This previous scheme, despite its good intentions, was primarily utilized by high-income households and led to considerable deadweight effects—subsidizing purchases that would have happened anyway.
"Now it is important to use the additional subsidies efficiently and in a socially just way," comments Sven-Peter Rudolph, Chairman of the ACE Auto Club Europe. The proposal is simple and direct: capping the purchase premium for electric cars at €35,000 gross. This cap is designed to prioritize the lower-price segment, ensuring that the purchase premium specifically benefits people with low and medium incomes.
The focus, Rudolph stresses, must be placed squarely on affordable, all-electric vehicles, making the shift accessible to a wider demographic. Furthermore, he adds a crucial exclusion: "Plug-in hybrids must be excluded from the subsidy, as they do not make a sufficient contribution to climate protection." This is a key point, as PHEVs are often criticized for primarily being driven using their combustion engines, particularly as company cars.
The Double Utility of Targeted Spending
Marion Tieman, transport expert at Greenpeace, underscores the strategic wisdom of targeted subsidies. She argues that using the subsidy wisely creates a double utility:
Market Correction: By specifically promoting low-cost e-cars for low and middle incomes, the policy finally compels the automotive industry to occupy a criminally neglected market segment. For years, German manufacturers have focused heavily on premium, high-margin EVs, leaving the affordable market segment wide open.
Social Equity: It simultaneously makes entry into electromobility easier for households with fewer financial options, ensuring that the benefits of cleaner transport are shared more broadly across society.
This is not just about fairness; it is about filling a massive market gap and accelerating mass adoption, which is necessary for climate goals to be met.
The Highway Paradox: Misguided Investment Priorities
Adding to the social criticism of untargeted EV subsidies is the coalition's reported plan to allocate an additional three billion euros towards the construction of new motorways. This commitment, the associations argue, clearly contradicts both the actual needs of the people and the government's own climate goals outlined in the coalition agreement, which had agreed to prioritize renovation and maintenance over new construction.
Stefanie Langkamp, Head of Politics at Climate Alliance Germany, voices strong frustration: "With this decision, the coalition is throwing a central goal from the coalition agreement overboard and disappointing many commuters who are annoyed every day by the state of the existing infrastructure."
She paints a vivid, relatable picture of misplaced priorities: "While billions are poured into new highways, bus lines are being canceled, train stations are falling into disrepair and the potholes on our roads remain. Anyone who waits for the delayed train in the morning or has no connection at all senses where the priorities are wrong."
The message is clear: investment must prioritize infrastructure that genuinely reaches and improves people's lives—punctual buses, reliable railways, and good local mobility.
Data Supporting the Shift
This call for prioritizing public transport over new motorways is not based solely on anecdote. The alliance points to the current mobility monitor by Agora Verkehrswende, which shows that car traffic on motorways and expressways has slightly decreased in recent years, while the use of public transport has risen very sharply. This data presents a clear signal that the public demand is shifting, and political focus should follow this trend.
The position paper argues that transport investments must be geared towards the needs of people across Germany, and those needs are for better, punctual, and barrier-free bus and train services now, not unnecessary motorway projects in 20 years. Consequently, the additional €3 billion earmarked for new highways must be consistently redirected towards expanding public transport services in both rural and urban areas.
Mobility is Participation: The Social Equity Mandate
At the heart of the argument from the social associations is the idea of participation.
Verena Bentele, President of the social association VdK Germany, powerfully states: "Mobility means participation." She stresses that access to buses, trains, and even e-cars must not fail because of financial constraints or structural or digital hurdles. "Only if accessibility and social justice are thought of together will a real transport turnaround succeed that takes everyone along."
The transition to clean transport must be inclusive. If low-income individuals cannot afford the bus ticket, or if the electric vehicle remains out of their financial reach, the transport revolution benefits only the wealthy, leaving structural inequalities untouched.
Specific Proposals for Socially Just E-Mobility
The alliance is not just criticizing; they are offering concrete, actionable solutions to achieve both climate goals and social justice:
Social Leasing for Low-Income Earners: For those who require a car for employment but cannot afford the capital cost of ownership, the alliance proposes creating social leasing programs for both new and used electric cars. This provides access to reliable transport without massive upfront investment.
Linking Subsidy to Household Size: To prevent deadweight effects and ensure the funds reach those truly in need, the subsidy should be linked to the size of the household, rather than just the individual car purchase.
Counter-Financing through Company Car Taxation: The alliance suggests establishing long-term counter-financing mechanisms, specifically through higher company car taxation for combustion cars. This creates a funding stream that directly discourages the use of polluting vehicles by businesses.
Support for Fleet Electrification and E-Bikes: They welcome an unbureaucratic new edition of the "sozial&mobil" funding for the electrification of fleets used by social services. Furthermore, subsidizing the purchase of e-bikes for low-income earners is seen as a key step, as e-bikes represent an affordable and healthy mobility option that covers the "last mile" problem often faced by public transport users.
Deeper Analysis: The Economic and Climate Impact of PHEV Exclusion
The exclusion of Plug-in Hybrid Electric Vehicles (PHEVs) from subsidies, as demanded by Rudolph, is a point of significant environmental contention, requiring a closer look.
PHEVs were initially seen as a necessary bridge technology, easing the public into electrification. However, real-world data increasingly shows that many PHEV owners, especially those with company cars, rarely bother to plug them in, utilizing them predominantly as conventional gasoline vehicles. This "lazy charging" phenomenon defeats the climate purpose of the subsidy. By removing subsidies for PHEVs, the government would achieve three critical outcomes:
Climate Integrity: Ensuring that every subsidized euro leads to genuine, long-term $\text{CO}_2$ emission reduction from all-electric driving.
Funding Efficiency: Redirecting billions away from vehicles that offer limited climate benefits and towards the lower-cost BEV segment that urgently needs support.
Industry Signal: Sending a clear market signal to manufacturers to accelerate the development and production of affordable, efficient Battery Electric Vehicles (BEVs), rather than relying on the PHEV middle ground.
Conclusion: A Call for Coherent and Courageous Policy
The joint paper from the Climate Alliance Germany is a powerful and unified demand for a transport policy that is both climate-effective and socially responsible. It is a critical assessment of the failures of past subsidy schemes and a direct challenge to the government’s infrastructure spending priorities.
The alliance is advocating for a coherent vision: one where electric cars are accessible to everyone, public transport is reliable and extensive, and taxpayer money is invested where it provides the greatest collective benefit. Redirecting funds from new, unnecessary motorway construction to bolster aging rail and bus networks, while simultaneously targeting EV subsidies to the low-to-medium income brackets, is the essence of a truly courageous and equitable transport revolution.
As the data shows that public transport usage is rising and motorway traffic is plateauing, the time for a "watering can" approach is over. The moment calls for targeted, socially just, and strategically sound investment that ensures "mobility means participation" for all citizens, regardless of their wallet size. The government now faces the decision of whether to heed this broad, cross-sectoral appeal or risk throwing a central plank of its own climate agenda overboard.