by New Electric Vehicle Incentive Program in Germany
Germany is preparing to relaunch a subsidy program for electric vehicle buyers after a sharp drop in sales caused by the cancellation of previous benefits. The new scheme provides financial support to stimulate demand for electric cars.
Key details of the future program include:
Open Market for Foreign Manufacturers
Unlike some European countries, the German subsidy program will not have restrictions based on the car’s country of origin. The government confirmed that Chinese brands, such as BYD, will be full participants.
Environment Minister Karsten Schneider stated that there is no evidence of a future influx of Chinese imports, and local brands are strong enough to compete.
The program will be active until 2029, and applications can be submitted retroactively starting from January 1, 2026. An online portal for registration is planned to be launched in May. The final terms of the program will be announced later this year.
Return to Support Policy
The previous electric vehicle incentive program, which ran from 2016 to 2023 and cost the budget about 10 billion euros, was abruptly terminated due to fiscal constraints. This led to a 27% drop in electric car sales in 2024.
The new coalition government is clearly interested in reviving the market, despite the EU’s recent decision to soften plans to ban internal combustion engines from 2035. It was discussed that subsidies would be limited to cars costing up to 45,000 euros, but a final decision has not yet been made.
Additional Support Measures
In addition to direct purchase funding, the program includes other measures. In particular, preferential taxation for electric vehicles will be extended until 2035. This will cost the budget about 600 million euros in lost revenue but demonstrates the government’s commitment to ensuring a smoother transition to electric vehicles.
The total budget for the new initiative is 3 billion euros, which will support about 800,000 vehicles. This step indicates a strategic shift aimed at stimulating not only production but also final demand, especially among middle- and low-income populations. The inclusion of Chinese brands without barriers could intensify market competition, which in the long term may contribute to lower prices and accelerated technological development. The success of the program will largely depend on the efficiency of administration and the clarity of communication of terms to potential buyers.
