The subsidies came into effect on April 1st, 2007 and was to continue through the end of December 2009. It allowed all individuals who purchased an automobile classified as environmentally friendly to receive a rebate of 10,000 kronor ($1,525).
The government set aside 50 million kronor to fund the program in 2007, and 100 million kronor in both 2008 and 2009.
The grants quickly grew in popularity, forcing the government to allocate an additional 240 million to keep the programme running in 2008.
The government now says it will also add 325 million kronor for subsidies in 2009, but at the same time will put a stop to green car subsidies altogether on June 30th, 2009.
Minister for the Environment Anders Carlgren said that the subsidy’s purpose was to stimulate sales of green cars and that it has succeeded in doing so.
Sales of cars which run on biofuels, as well as those with other equipment designed to make them more environmentally friendly, have exhibited strong sales growth.
“The point is not that the state and taxpayers should be being for automobile purchases in the long run,” he said to the TT news agency.
Carlgren’s decision was unwelcome news to the auto industry, which already feels it’s under pressure.
“We don’t like it when the rules are changed in the middle of the game,” said Bertil Moldén, head of BIL Sweden, an auto industry association, to TT.
Environmentalists also criticized the move.
“It’s really weak. They’ve promised the subsidies through 2009 and now they’re foolishly stopping it because it’s been such a success,” said Swedish Association of Green Motorists spokesperson Mattias Goldmann to TV 4.