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Published on 01/19/2026 at 04:08 am EST – Modified on 01/19/2026 at 07:03 am EST
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BERLIN (dpa-AFX) – Anyone buying or leasing an electric car will soon receive between 1,500 and 6,000 euros from the government, depending on personal circumstances and the type of vehicle. Those with lower incomes or children will get more within this range. Here’s what you need to know about the new subsidy program.
How much money is available for the purchase of pure electric cars?
The subsidy threshold is set at a household income of 80,000 euros. According to the Federal Ministry for the Environment, this corresponds to a monthly net income of about 4,800 euros for single people and 5,400 euros for couples. The maximum subsidy threshold is 90,000 euros in household income if there are two children, as the limit increases by 5,000 euros for each child.
The basic subsidy for pure electric cars is 3,000 euros. Households with an income of up to 60,000 euros receive 4,000 euros, while those with a maximum income of 45,000 euros get 5,000 euros. The subsidy increases by 500 euros per child, up to a maximum of 1,000 euros in total.
What about cars that are not purely electric?
Less money is available for so-called plug-in hybrids, which can run on both electricity and fuel. For these vehicles, as well as those with a range extender, the basic subsidy is 1,500 euros. Range extenders are small combustion engines that increase the range of electric cars.
In order for cars with these technologies to be eligible for the subsidy, they must not emit more than 60 grams of CO2 per kilometer or must have an electric range of at least 80 kilometers. From July 1,2027, the subsidy is set to be reviewed, with plans to introduce requirements more closely aligned with real-world CO2 emissions.
When does the new subsidy take effect?
Anyone who has newly registered their electric car or certain plug-in hybrids since January 1 can apply for the subsidy. This applies to both purchases and leases. However, applications for the new subsidy can likely only be submitted starting in May, when the relevant online portal is expected to launch.
A total of 3 billion euros has been allocated for the purchase premium, which, according to the ministry, should be enough to subsidize around 800,000 vehicles by 2029.
What government support has there been so far?
Currently, there is no purchase premium for electric cars. At the end of 2023, the then “traffic light” coalition of SPD, Greens, and FDP abruptly ended the so-called environmental bonus to plug budget gaps. At that time, the subsidy was up to 4,500 euros, half of which had to be covered by manufacturers. From 2024, the premium would have dropped to 3,000 euros and was due to expire at the end of 2024.
How popular are electric cars?
Their share of all new registrations rose by about 19 percent last year, an increase of roughly 5.6 percentage points compared to the previous year. In October, the federal government announced the reintroduction of an e-car purchase premium, which is expected to come into effect later this year.
Although there was a 45 percent increase compared to the previous year, sales slumped in 2024 after the unexpected end of the subsidy. Compared to 2023, the increase in 2025 was only about four percent, according to mobility expert Constantin Gall from consultancy EY. Electric cars recently made up around four percent of the total vehicle fleet.
Why are plug-in hybrids controversial?
So-called plug-in hybrids can run on both electricity and fuel. How environmentally friendly they are is a matter of debate. While these cars can drive short distances purely on electricity, once the battery is empty, they consume more fuel due to the extra weight and thus emit more CO2. In addition, their production generates more CO2 than that of a combustion engine vehicle.
Whether they are better or worse for the climate than comparable combustion engine vehicles depends primarily on how often they are charged and the proportion of distance driven electrically. Critics argue that the official consumption figures are far too low. However, plug-in hybrids are especially popular in company fleets due to tax advantages.
Until the end of 2022, there was also a state subsidy of up to 2,250 euros for plug-in hybrids.
Will the subsidy help the struggling German auto industry?
“I don’t think it’s necessary,” says Ferdinand Dudenhöffer, head of the private Center Automotive Research (CAR) institute. “Electric cars sell themselves. It’s a shame about the taxpayers’ money.” Prices for electric cars have recently fallen anyway. Dudenhöffer expects this trend to continue even without government subsidies, partly because automakers need to sell these vehicles to meet CO2 fleet targets and avoid EU fines.
There is a risk that automakers will factor the subsidy into their pricing, meaning cars could be sold at higher prices than without the subsidy. In addition, the expected income verification will create administrative burdens. To boost electric car sales and help the domestic industry, Dudenhöffer believes cheaper electricity for charging and lower non-wage labor costs would be more effective.
In the long term, the allocation of the new subsidy is set to be more closely tied to production in Europe, but corresponding EU regulations are still awaited./hrz/DP/jha
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