Automotive analysts think that Germany may be increasing electric vehicle incentives to create a large EV market and to move beyond Volkswagen’s ‘Dieselgate’ scandal.

Frost & Sullivan analysts say that German Chancellor Angela Merkel’s agreement last week to invest 1.2 billion euros ($1.4 billion) of taxpayers’ money into promoting EVs is connected to the VW scandal. There’s also the country’s competitive target to sell one million vehicles in the next four years and create the second-biggest market for EV technology in Europe.

Frost & Sullivan research associate Pooja Bethi said Germany’s planned introduction of a 4,000 euro ($4,600) incentive toward the purchase of each EV also should support Mercedes-Benz, BMW, and Volkswagen, each of which is planning two or three new EV model launches next year.

“Thus far, the growth of EVs in Germany has been rather promising without the incentives,” Bethi said, “owing to the general awareness of the consumers towards environmental concerns, enhanced by the recent Volkswagen Dieselgate scandal. Apart from the incentives, which will make Germany the next big market for EVs in Europe, the next step would be to consider introducing the (drivetrain) conversion incentive such as the one in France.”

SEE ALSO: Germany Subsidizes Electrified Cars – Except Teslas

The French government offers up to 10,000 euros ($11,500) to switch from diesel cars as old as 14 years to EVs. It’s a move some analysts link to the escalating air-pollution issues facing its big cities including Paris – and the European Union’s move away from diesel-powered cars.

Germany and France have been lagging behind European countries with better-developed energy sustainability such as Norway, where the car buyer’s incentive is comparatively higher. In addition, 95% of Norway’s electricity is obtained from renewable resources. The country has boosted its EV sales by improving the infrastructure through increasing the density of charging stations, Bethi says.

Ward’s Auto