German Tesla Drivers Told to Return $4,650 Electric Subsidy

(Bloomberg) -- Hundreds of German Tesla Inc. Model S drivers have been ordered to pay back a 4,000 euro ($4,650) electric-vehicle subsidy after a government agency deemed their luxury cars too expensive to qualify for the program.

Some 800 drivers who bought their cars before March 6 and have received the so-called “environmental bonus” will have to return it, Germany’s Federal Office for Economic Affairs and Export Control said Tuesday in a statement. The program was designed to boost sales of plug-in and battery vehicles. Another 250 Tesla owners that bought the Model S won’t receive payment, the office said.

Tesla will appeal the decision and will cover the cost of the bonus until the situation is resolved, the U.S. automaker said on Wednesday in an emailed statement. Germany’s electric vehicle subsidy is shared equally by the government and manufacturers and Tesla said it won’t ask for its part of the payment to be returned.

“As our website demonstrates, anyone in Germany has always been able to order a base version Model S that was below the required price level, and we have delivered such cars to customers,” according to the statement.

Germany subsidizes electric vehicles whose base price doesn’t exceed 60,000 euros. The office scratched the Model S from its list of cars that can qualify in November, after learning Tesla’s basic Model S wasn’t available in Germany.

Surging Sales

“Talks with Tesla unfortunately did not lead to a solution,” according to the government office’s statement, which added that the goal had been to avoid hurting customers.

Sales of electrified vehicles in Germany surged 64 percent during the first half of the year, leading the European Union’s top five markets. Meanwhile, sales of Model S and X have slumped by about a third since the start of 2018, according to the Federal Transport Authority.

German customers who bought their Model S after March 6 will qualify for the subsidy, the office said, after Tesla proved customers could order and take delivery of a basic car costing a maximum of 60,000 euros.

©2018 Bloomberg L.P.