Don't learn English and French! Germany launches a 3 billion Euro subsidy for electric cars, Chinese car companies can also benefit.

The German government has launched an electric car subsidy program with a total amount of 3 billion euros (approximately 3.5 billion dollars), open to all car manufacturers, including Chinese brands. This move aims to boost the sales of electric cars in Europe's largest car market. The subsidy policy was officially announced on Monday and is an important part of the German government's new round of stimulus measures. It is understood that after the previous subsidy policy ended by the end of 2023, demand for electric cars in Germany plummeted significantly. This new policy aims to promote the popularization of electric cars and help the struggling automotive industry. Although the initial intention of the policy was to support domestic car manufacturers, the German government did not set any restrictions based on the origin of production. German Environment Minister Carsten Schneider stated at a press conference on Monday, "I have full confidence in the quality of European and German domestic car brands. There is no evidence, both from sales data and actual visibility on German streets, to suggest that the concerns about a large influx of Chinese car companies into the German market are happening. Therefore, we choose to face competition rather than set restrictive barriers." This decision is undoubtedly a significant boost for Chinese budget car brands such as BYD Company Limited (01211) that are rapidly expanding in the European market. Although Chinese electric cars entering the EU market are subject to import tariffs, relying on low manufacturing costs domestically, Chinese car companies can still achieve profitable sales in Europe. Currently, the European Commission is considering replacing the existing import tariff policy with a minimum price mechanism. Germany's open attitude towards Chinese car companies contrasts sharply with other European countries. The United Kingdom, as the largest market in Europe for Chinese electric cars, excluded Chinese electric cars from its subsidy policy introduced last year by setting stringent standards, including low carbon emissions requirements for battery production and vehicle assembly. France's "social leasing plan" also includes similar restrictive clauses. According to the German Ministry of Environment, this new round of subsidy plans, which was preliminarily disclosed last October, is expected to help sell about 800,000 electric cars by 2029. The subsidy amount ranges from 1,500 to 6,000 euros, and the specific amount will be determined based on the income level of the purchasing household, population size, and vehicle type. The policy targets primarily middle and low-income groups. Car companies such as Volkswagen Group (VWAGY.US), Stellantis (STLA.US), which are intensifying their efforts to develop affordable electric car models, will also benefit from this subsidy policy. The trend of electric car sales in Germany has fluctuated dramatically in the past: after the previous government canceled subsidies, sales plummeted in 2024 and only began to recover in 2025. Although the country has failed to achieve its official goal of popularizing electric cars multiple times in the past, with a batch of affordable models such as Renault (RNLSY.US) R5 E-Tech and Volkswagen ID. Polo with a price of around 25,000 euros gradually hitting the market, the market outlook is gradually improving. In addition, the ruling coalition led by German Chancellor Merkel has extended the tax exemption for electric cars until 2035. The German Ministry of Finance estimates that this policy will lead to a reduction in government tax revenue of approximately 600 million euros by 2029. It is worth mentioning that Merkel has publicly advocated for the EU's process of phasing out gasoline cars to be slowed down.