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A German governmental agency has dropped #Tesla Model S car from the official list of #Electric Cars eligible to receive subsidies in the country. The German authorities said Tesla was removed from the list because the Model S base version is very expensive and doesn’t qualify for the #subsidy scheme. According to the German authorities, customers are unable to buy the Model S base version without comfort features and are forced to spend over 60,000 euro ($71,500) to buy the car.

The latest decision by the German authorities is expected to stir a new row between the German government and the US carmaker, Tesla.

Ambitious subsidy scheme

In 2016, Germany launched an ambitious subsidy scheme to encourage electric car usage in the country.

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The 1-billion-euro scheme was partially funded by the German auto industry. Under this scheme, any customer buying a battery-only electric vehicle is offered a 4,000 euros ($4,750) discount. For a hybrid model, a subsidy of 3,000 euros ($3,500) is offered to the customer. However, authorities have included a price cap of US$71,400 (60,000 euro) to exclude premium models from the list.

German wants the sale of electric vehicles to hit the 1 million mark by 2020. In 2016, just 50,000 pure battery-only electric vehicles were sold in Germany.

New charging points will be built across Germany

The authorities plan to cover 400,000 vehicles under the subsidy program in a "first come, first serve" basis. In addition, there are plans to spend about 300 million euros (US$350 million) on building 15,000 new charging points across the country to provide battery charging facility to customers.

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When authorities announced the electric vehicle subsidy scheme In Germany last year, the price of Tesla Model S base version (including VAT) was nearly US$98,400. Tesla described it as unfair and said the price cap was purposely set by the authorities to exclude Tesla models from the list.

Later, the company reached an agreement with the German Government, getting permission to sell a less expensive base model in Germany. In November 2016, Tesla removed some features from the Model S to bring car’s price below 60,000 euro limit. The features that were dropped were dubbed as “comfort package” by the car maker.

Tesla describes authorities’ claims as completely false accusation

On Friday, a spokesperson from the German Federal Office for Economic Affairs and Export Controls (BAFA) told Reuters that Tesla is currently not offering the Model S without comfort features in Germany, and therefore it is not eligible for the discount.

Tesla has described German authorities’ claims as a completely false accusation, as reported by the Reuters. The company says it has delivered Tesla Model S base version without the comfort features to several customers in Germany.

The company also announced that it would probe whether any customer was denied the no-frills version by its sales team.