Following the German government’s announcement of a new subsidy for electric vehicles, more details are emerging. According to media reports, it will once again be a purchase incentive worth up to 4,000 euros, but with strict limits on both vehicle price and the buyer’s income. Used cars are also expected to be eligible.
Following the abrupt end of Germany’s environmental bonus for electric car purchases in late 2023, the federal government now plans a new funding programme to promote EV adoption. As Finance Minister Lars Klingbeil said last Thursday, three billion euros from the Climate and Transformation Fund and the EU Social Fund will be allocated to specifically support households with low and middle incomes in switching to zero-emission vehicles. What Klingbeil did not initially specify was whether the scheme would again be a purchase incentive or, for example, a social leasing model like the one in France – something his Social Democratic Party (SPD) had been advocating in recent months.
According to various media reports, it now appears that the coalition of the CDU/CSU and SPD opted for a purchase bonus of up to 4,000 euros per vehicle. The programme is set to start on 1 January 2026, with the Federal Office for Economic Affairs and Export Control (BAFA) once again responsible for processing applications and disbursing funds.
However, the new programme is expected to come with stricter conditions than the previous environmental bonus. There will reportedly be an income cap to ensure that only low- and middle-income households benefit. According to the German newspaper Bild, a gross monthly income of up to 3,800 euros is under discussion, though this has not yet been finalised.
The new rules will also impose tighter restrictions on eligible vehicles. The net list price is reportedly capped at 45,000 euros – down from the 65,000-euro limit under the previous scheme. In other words, premium electric models will be excluded. Only purchases of fully electric vehicles will be eligible, not plug-in hybrids.
For the first time, the federal government also plans to include used electric cars within the programme. Other EU countries have already had positive experiences with such measures. It would allow households with lower incomes to afford an electric car more easily. After all, new EVs still tend to cost significantly more than their combustion-engine counterparts, and even with a 4,000-euro subsidy, prices often remain high.
If used EVs were also subsidised, lower-income households could benefit from the combination of lower used-car prices and state incentives. Moreover, the supply of used electric vehicles is growing steadily – fuelled by lease returns and company fleet cars that are typically replaced after just a few years.
SPD Secretary-General Tim Klüssendorf told Bild: “Everyone must be able to afford the transition.” He added: “This funding is intended to finally bring electric cars into urban neighbourhoods where they have so far been difficult to finance. What matters to me in designing this programme is that it must primarily benefit the German and European automotive industries. The Environment Ministry will ensure this. The future is electric, and we want it to be written at German production sites.”
The German government is thus reportedly exploring ways to exclude Chinese-made electric cars from the scheme. In addition, the new subsidy is expected to cover not only electric cars but also other forms of climate-neutral mobility, such as electric mopeds, motorcycles, and possibly e-bikes.
bild.de, auto-motor-und-sport.de, rnd.de (all in German)
This article was first published by Florian Treiß for electrive’s German edition.
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