Germany has announced plans to offer incentives of up to €4,000 for the purchase of a new electric vehicle.

Chancellor Angela Merkel and the German government have reached an agreement with car manufacturers to jointly spend no less than €1.2 billion (about $1.4B) to rejuvenate sales of alternatively-powered cars. In a press conference held today in Berlin, Finance Minister Wolfgang Schaeuble revealed EV buyers will get up to €4,000, while customers in the market for a plug-in hybrid will take advantage of an incentive worth as much as €3,000.

The €1.2B will be evenly split between the German authorities and the car manufacturers, with the ultimate goal being to “move forward as quickly as possible on electric vehicles,” according to Schaeuble. Interestingly, automakers initially wanted to offer only 25 percent of the total, but in the end agreed to double the percentage to 50. Not all of the money will be allocated for incentives, as €300M will be directed to the development of the charging infrastructure between 2017 and 2020.

Car sales in Germany amount to more than three million units each year, but only a little over 30,000 EVs have been sold so far in the country. The sizeable incentive should give sales of electric (and plug-in hybrid) vehicles a boost, with Schaeuble telling the media the plan is to start offering them as early as next month.

This is part of Angela Merkel’s master plan to support subsidies as a move to have one million EVs on the streets of Germany by the end of the decade. It remains to be seen whether it will actually happen, since electric vehicles will still be significantly more expensive than conventionally-powered cars. In addition, there’s also the matter of range anxiety enhanced by the current limited charging infrastructure.

Source: Automotive News Europe