Germany’s €3 billion EV program brings subsidies back with new rules, a May launch, and no limits on Chinese brands
Not long ago, Germany made a sharp U-turn on electric vehicle incentives, pulling the plug on subsidies just as local automakers were counting on them to shore up faltering demand. Unsurprisingly, sales tanked. Now, the government is reversing course once again, preparing to reinstate a new subsidy program aimed at reviving interest in EVs.
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The upcoming scheme will offer buyers between €1,500 ($1,742) and €6,000 ($7,000) in incentives, depending on the vehicle, household income, and family size. The total budget stands at €3 billion ($3.48 billion), enough to support around 800,000 vehicles under the plan.
No Barriers for Foreign EVs
Unlike some neighboring countries, Germany’s EV subsidy will be open to all manufacturers, including Chinese brands. According to Bloomberg, the government has confirmed it will not impose origin-based restrictions, with Environment Minister Carsten Schneider saying there’s no evidence of a flood of Chinese imports and that local brands are strong enough to compete.
Germany’s subsidies will be offered through 2029, and applications can be submitted retroactively to January 1, 2026. An online portal is scheduled to be launched in May to handle applications.
The program was first announced last October and has been designed to mostly benefit low- and middle-income households. Final terms are expected to be revealed later in the year.
A Reboot for EV Incentives
Germany previously ditched its EV incentives in late 2023 due to budgetary issues. This immediately triggered a 27 percent decline in EV sales in 2024.
There’s now a new government in power who are clearly eager to see the sales of electric cars rebound, even though the European Union did recently give car manufacturers a major reprieve in reversing the proposed 2035 ban on new cars with internal combustion engines.
In late last year, it was reported that the new incentive scheme would only provide subsidies for new EVs costing less than €45,000 ($52,300), but it’s unclear whether this cap has been confirmed. Additionally, it had been reported that only individuals earning less than €45,000 ($52,300) would be eligible.
Germany’s earlier EV incentive program, which ran from 2016 to 2023, distributed roughly €10 billion ($11.6 billion) in subsidies to buyers.
What Else Comes With the Package?
Alongside the new funding package, the program comes with additional efforts to support EV uptake, including a tax break for electric vehicles extended through 2035. Estimated to cost around €600 million (about $700 million) in forgone revenue, the move reflects the coalition’s backing for a slower, more flexible transition, even as the future of combustion engine bans remains under debate.
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Brad Anderson’s lifelong affair and fascination with cars started young. Before even graduating high school,… Read full bio

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