Tesla in row with German agency over subsidy removal

A German government agency has removed Tesla from the list of electric cars eligible for subsidies, sparking a row with the US manufacturer over whether its Model S is too expensive to qualify for the scheme.

Tesla customers cannot order the Model S base version without extra features that pushed the car above the €60,000 (£52,888) price limit, a spokesman for the German Federal Office for Economic Affairs and Export Controls (BAFA) told Reuters.

Germany last year launched the incentive scheme worth about €1bn, partly financed by the German car industry, to boost electric car usage. A price cap was included to exempt premium models.

“This is a completely false accusation. Anyone in Germany can order a Tesla Model S base version without the comfort package, and we have delivered such cars to customers,” Tesla said in a statement. 

Price limits

The carmaker said the upper price limit was initially set by the German government to exclude Tesla, but later a compromise was reached “that allows Tesla to sell a lower cost option vehicle that qualifies for the incentive and customers can subsequently upgrade if they wish.”

It said, however, it would investigate whether any car buyers were denied the no-frills version.

“If a sales person told a customer they could not buy the Model S base version without the comfort package, this is not accurate and clearly outside our policies and procedures and we will investigate and take appropriate action as necessary.”

Under the subsidy scheme, buyers get €4,000  off their all-electric vehicle purchase and €3,000 off plug-in hybrids.