The Federal Republic of Germany is to invest €100m on meeting a target of 30% of government vehicles being powered by alternative powertrains in the future while a further €300m will be spent on new public fast charging networks.

In addition, a €1.2bn programme to subsidise ULEV sales is being jointly funded by the Federal Government and OEMs, and will see buyers of electric cars with a list price of less than €60,000 awarded a €4,000 contribution. Buyers of plug-in hybrids under this price bracket will be granted €3,000.

The programme will begin from next month and will continue until 2019 or until the funds are used up – whichever comes first.

To date, Volkswagen, Daimler and BMW have signed up to the programme but all carmakers can sign up to it.

Commenting on the news, IHS Automotive said: “The idea of the German government incentivising the sales of alternative powertrain vehicles has been on the agenda since 2010 when German chancellor Angela Merkel made an election pledge to have one million EVs on the road by 2020.

“Given the technocratic nature of the country, the progressive nature of environmental politics and the high net wealth of German consumers, it would appear to be an ideal candidate to lead the way in terms of encouraging the purchase of EVs.

“This is especially the case when one also considers how at the forefront of EV development German OEMs have been with models like the BMW i3 and the e-Golf, while the German premium OEMs are launching a major PHEV model assault with Mercedes-Benz in the process of rolling out 10 new PHEVs by 2017 and BMW also undertaking a high number of new launches.

“However, it appears that the one million target has been quietly dropped with a target of 500,000 units now stated as the target by the end of the decade. This contrasts to the figure of around 30,000 electric vehicles that are currently on Germany's roads. To put it in a wider context just over 161,000 alternative powertrain vehicles (EVs and PHEVs) were sold in Western Europe last year.”