Germany removes Tesla from subsidies list as too pricey

FILE PHOTO: A Tesla Model X is seen alongside a Model S at a Tesla electric car dealership in Sydney, Australia May 31, 2017. REUTERS/Jason Reed/File Photo

BERLIN (Reuters) - A German government agency has removed Tesla from the list of electric cars eligible for subsidies, sparking a row with the U.S. company over whether its Model S is too expensive to qualify for the scheme.

Tesla customers cannot order the Model S base version without extra features that pushed the car above the 60,000 euro ($71,500) price limit, a spokesman for the German Federal Office for Economic Affairs and Export Controls (BAFA) said on Friday.

Germany last year launched the incentive scheme worth about 1 billion euros, partly financed by the German car industry, to boost electric car usage. A price cap was included to exempt premium models.

“This is a completely false accusation. Anyone in Germany can order a Tesla Model S base version without the comfort package, and we have delivered such cars to customers,” Tesla said in a statement.

The carmaker said the upper price limit was initially set by the German government to exclude Tesla, but later a compromise was reached “that allows Tesla to sell a low option vehicle that qualifies for the incentive and customers can subsequently upgrade if they wish.”

It said, however, it would investigate whether any car buyers were denied the no-frills version.

“If a sales person told a customer they could not buy the Model S base version without the comfort package, this is not accurate and clearly outside our policies and procedures and we will investigate and take appropriate action as necessary.”

Under the subsidy scheme, buyers get 4,000 euros off their all-electric vehicle purchase and 3,000 euros off plug-in hybrids.

German magazine Auto Bild had reported that BAFA was looking into the Tesla issue and could take the company’s cars off the eligibility list.

Reporting by Markus Wacket; Writing by Maria Sheahan and Ludwig Burger; Editing by Ludwig Burger and Mark Potter