Incentives for electromobility

For several years now, the German government has been supporting the ramp-up of electromobility (e-mobility) by way of specific incentives. The Electromobility Act, for instance, came into force in July 2015. Since then, municipalities have been able to decide for themselves how they want to promote electric cars – for example, through free parking or special access rights. The prerequisite for this is uniform labeling. This has been available since mid-September 2015 from the registration authority in accordance with a general administrative regulation.

Since May 2016, the subvention guideline has also addressed the environmental bonus for the purchase of purely electric vehicles, externally chargeable hybrid electric vehicles, and hydrogen/fuel cell vehicles to promote sales of EVs (environmental bonus). The automotive industry and the federal government fund this incentive in equal measures.

With the existing system, the government share was doubled in June 2020 for a limited period (until December 31, 2021) as a new "innovation bonus." In addition, customers receive the manufacturer's share. This means, for example, that if all requirements are met, the environmental bonus of 9,000 euros for the purchase of purely electric vehicles and 6,750 euros for plug-in hybrids with a maximum net list price of 40,000 euros will be granted from June 4, 2020 to December 31, 2021. Above a net list price of 40,000 euros up to a maximum of 65,000 euros, an environmental bonus of 7,500 euros is granted for all-electric vehicles and 5,625 euros for plug-in hybrids.

Since November 2020, these incentives can be combined with other public subsidies. For this purpose, agreements are concluded with the funding providers to ensure that budgetary and state aid requirements are met. Information on the public bodies with which administrative agreements have been concluded is published on the website of the Federal Office of Economics and Export Control (BAFA).

The incentive measures established by the German government have met with a great response. This is particularly true of the environmental bonus: Since 2020, federal funding of EUR 2.09 billion has been earmarked for the increased bonus until it has been paid out in full, but at the latest until 2025.

In view of the covid-19 crisis, the German government has developed an aid program for the economy that includes an "innovation premium." In the existing system, the government's premium has been doubled as a new "innovation premium."

The manufacturer's share remains unaffected. As an example: If all requirements are met, from June 4, 2020 through December 31, 2021 the environmental bonus of 9,000 euros for the purchase of purely electric vehicles and 6,750 euros for plug-in hybrids with a maximum net list price of 40,000 euros will be granted. Above a net list price of 40,000 euros and up to a maximum of 65,000 euros, an environmental bonus of 7,500 euros is granted for all-electric vehicles and 5,625 euros for plug-in hybrids.

Since November 2020, these incentives can be combined with other public subsidies. For this purpose, agreements are concluded with the funding providers to ensure that budgetary and state aid requirements are met. Information on the public bodies with which administrative agreements have been concluded is published on the website of the Federal Office of Economics and Export Control (BAFA).

This means, for instance, that with a net list price of an EV of up to 40,000 euros the government subsidiary increases from 3,000 to 6,000 euros. This scheme is limited until December 31, 2021.

The ten-year vehicle tax exemption for all-electric vehicles, which was applicable through December 31, 2025, has been extended until December 31, 2030.

With regard to the 0.25% taxation of purely electric company cars, the purchase price limit is increased from 40,000 to 60,000 euros.