Subsidies for electric cars can't last forever: Merkel

[September 27, 2018]  BERLIN (Reuters) - Subsidies to help persuade Germans to buy electric vehicles have helped boost demand but cannot go on forever, Chancellor Angela Merkel said on Thursday.

Electric car is charged at the charging station at the front of the German utility E.ON headquarters in Essen, Germany, May 9, 2018. REUTERS/Wolfgang Rattay

Germany wants to increase electric car sales, especially in the wake of a diesel emissions cheating scandal that has engulfed the auto industry in the last three years.

A 1 billion euro ($1.2 billion) subsidy scheme helped more than double sales last year.

"Now there is talk about extending (incentives). But this cannot be a permanent subsidy," she told an e-mobility event, reiterating that Germany would miss its target of having 1 million electric vehicles on the road by 2020 by two years.

She also repeated her call for European countries to develop battery cells. Currently the industry sources them from Asian manufacturers.

"I am not sure if it is a good thing if we don't know what happens in these cells. Therefore I will try to push for a European development... Germany is ready to take part," Merkel said, saying she was uncertain about relying fully on China.

($1 = 0.8543 euros)

(Reporting by Maria Sheahan and Madeline Chambers; editing by Thomas Seythal/Keith Weir)

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