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Published on 02/04/2026 at 07:48 am EST
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Persistent economic weakness, unemployment, and high prices for new cars continued to dampen consumer willingness to buy, explained Constantin Gall, automotive expert at consulting firm EY. The subsidy for purchasing electric cars, introduced on January 19, is expected to provide some momentum. “However, the effect on the overall market will remain limited,” he said.
The federal government is supporting the purchase of new electric vehicles with a socially tiered bonus of up to €6,000. The incentive applies retroactively from January 1, and applications can be submitted starting in May. According to the latest analysis by industry expert Ferdinand Dudenhöffer, the price gap between more expensive electric cars and combustion models is narrowing. Including discounts, the average sale price for an electric car in December was €34,500, only about €1,300 more than a conventional vehicle.
The trend towards electric vehicles is also evident in German car manufacturing, according to data from the German Association of the Automotive Industry (VDA). Despite ongoing political debates over electromobility in Europe, electric car production in Germany reached a record level in 2025. Production of fully battery-powered cars rose by 15 percent to 1.22 million units. Plug-in hybrids, which combine combustion engines and electric drives, saw even stronger growth. Manufacturers produced around 450,000 of these models, a 54 percent increase from the previous year. In total, 1.67 million vehicles with electrified drivetrains rolled off assembly lines, representing growth of 23 percent. Meanwhile, the number of newly produced combustion engine vehicles dropped by nine percent to 2.48 million.
(Reporting by Ilona Wissenbach, edited by Thomas Seythal)
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