by New Volkswagen Group program in Germany: electric cars with up to 50% discount
Volkswagen Group Retail Deutschland (VGRD) has launched an innovative “salary conversion” program that allows customers to get significant discounts on electric cars. The company notes that savings can reach up to 50% compared to private leasing without a down payment.
The program is called e.loop. It works like this: the employer leases a new electric car for their employee, and the cost is deducted from the salary. This may sound complicated, but the automaker explains that the employer signs an agreement with VGRD, after which employees can choose their desired car online.
“The monthly payment is deducted directly from gross income as part of a salary swap agreement, which automatically leads to savings on payroll taxes.”
How it works and who can use it
Volkswagen claims the process involves only four to five steps, and most can be done online. The program is meant to be attractive to employers, as it allows them to benefit from tax incentives for electric cars, helps retain and attract employees, and improves their environmental, social, and governance (ESG) profile. The company adds that the program requires minimal administrative effort and provides access to the entire model range — from the Volkswagen ID.3 to the Porsche Cayenne Electric.
Employees get significant savings and comprehensive car ownership. This includes the car itself, insurance, and maintenance. Volkswagen notes that the process is quite simple, and the hardest choice is only which electric car to choose.
Program conditions and prospects
According to Automobilwoche, the program is similar to corporate bicycle initiatives, and customers can choose a lease term of 24 or 36 months. The program is already a success: VGRD reports “very high” interest, and officials believe that by 2030, e.loop could account for 5-10% of new car sales in Germany.
Although the program seems like a win-win for employers and employees, there are also potential drawbacks. The biggest risk is that a company may be left with the car after an employee leaves.
This approach to leasing through an employer could become a powerful incentive for promoting electric cars among the general population, especially in the context of high initial costs for electric vehicles. The discount of up to 50% makes electric cars much more affordable, and including insurance and maintenance in the monthly payment removes additional worries for the driver. At the same time, the risk for companies associated with staff turnover may force employers to be more careful in selecting program participants or to include additional conditions in contracts. If the initiative lives up to expectations, it could serve as a model for other countries where the cost of electric cars remains a deterrent to the mass transition to green transport.
