An electric Volkswagen Passat car is pictured at charging station at a VW dealer in Berlin, Germany, February 2, 2016. REUTERS/Fabrizio Bensch

BERLIN (Reuters) - Germans could get up to 5,000 euros ($5,500) to buy an electric car under government proposals which involve the auto industry shouldering 40 percent of the cost, government sources told Reuters on Friday.

Germany has a goal of 1 million electric cars on its roads by 2020, but has so far made little progress in encouraging drivers to switch from mostly cheaper diesel and petrol models.

The incentive plan, which was put together by the environment, transport and economy ministries, still needs approval from the finance ministry which wants a funding concept for the 1.3-billion-euro plan that doesn’t cut into the budget.

Under the proposal seen by Reuters, businesses would receive premiums of 3,000 euros for each electric car under a program that runs to 2020. Incentives will fall by 500 euros each year.

“We were not party to these plans and government consultations on this are still ongoing,” a finance ministry spokesman said on Friday.

Among German carmakers, BMW, Daimler's Mercedes and Volkswagen VOWG_p.DE produce all-electric cars, while Audi and Porsche also have plans to build their own.