Close to a thousand buyers of the Tesla Model S have been asked by German authority BAFA to pay back the plug-in grant (Umweltbonus) at once. This follows an alleged subsidy fraud that has since been cleared, but too late for most.

++ This article has been updated to include Tesla’s reaction below. ++

Last December, the German Federal Office for Economic Affairs and Export Control (BAFA) suspected Tesla of subsidy fraud. Back then, Tesla had indeed tried to outmaneuver the rules. This led BAFA to strike Tesla from the list of electric cars eligible for subsidies. But, this was only after they had granted the 4,000 euro plug-in grant to about 800 Tesla buyers in Germany.

Now this resulted in BAFA’s decision, that anyone who bought a Tesla Model S before March, 6, 2018 must pay back the plug-in grant. This also includes about 250 open applications from before that date which have now been declined.

BAFA says they have had no choice but to follow the law. They also claim, they had not been able to find another solution despite having reached out to Tesla and giving them time until July. Tesla Germany had not released an official statement at the time of writing.

The initial issue had arisen due to limitations of the 4,000 euro plug-in grant, also known as “Umweltbonus” (environment reward). It only applies to electric cars that cost no more than 60,000 euros net. Therefore, Tesla had listed a base version of the Model S below that price but investigative reporters found, that said trim level never existed in in reality. Too many essentials were missing, which the EV maker had packaged as optional “extras” such as the rearview camera, park sensors, or lane keeping assistant.

By now, a real trim level for 58,000 euros has been introduced and put the Model S back on the BAFA list of electric vehicles eligible for the plug-in grant (we reported).

Update July, 18: After BAFA released the news, Tesla reacted with their spin on the story and the promise to cover the cost for pre-March Tesla owners. They sent Electrek the following statement:

“As background, the price cap was intentionally set by the German Government at a level that was intended to prevent Tesla cars from qualifying for it. As a result, Tesla planned to file a complaint with the EU Commission, as this was against EU rules. Instead, Tesla and the German Government agreed on an acceptable middle ground that allowed Tesla to sell a low option vehicle that qualifies for the incentive and customers could subsequently upgrade if they wished. That is exactly what Tesla has done.

We are appealing BAFA’s decision to take this action against our pre-March 2018 customers. To make sure our customers are not harmed by this decision, we will cover the cost of the bonus for them until the issue is resolved.”

bafa.de (in German), electrek.co (Tesla reaction)