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Published on 09/28/2025 at 08:24 am EDT
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BERLIN (dpa-AFX) – A key incentive for purchasing new electric vehicles in Germany is at risk of expiring next year: the exemption from vehicle tax. From the start of the year, newly registered electric cars may no longer benefit from this financial relief. The federal government has yet to decide whether to extend the measure.
Hildegard Müller, President of the German Association of the Automotive Industry (VDA), stated that the coalition must urgently secure the extension of the vehicle tax exemption for pure electric vehicles until 2035, as stipulated in the coalition agreement. “The tax exemption has proven to be an effective purchase incentive for electric vehicles, but it would no longer apply to new registrations from January 1, 2026–potentially with significant consequences for the continued growth of e-mobility in both passenger and commercial vehicles.”
Uncertainty for Electric Car Buyers
A spokesperson for Finance Minister Lars Klingbeil (SPD) said that the extension of the temporary vehicle tax exemption for pure electric vehicles until 2035 is included in the coalition agreement. “Implementation is currently under review.” The federal government’s planned “Auto Dialogue” will address further measures to strengthen the automotive industry. Klingbeil has promised concrete decisions in the Bundestag.
According to government sources, the automotive summit is scheduled for October 9. Several ministers, state premiers from regions with an automotive industry, major manufacturers and suppliers, as well as labor representatives, are expected to attend.
A spokesperson for the Federal Ministry of Transport said the ministry fundamentally considers an extension of the vehicle tax exemption necessary, as it creates an incentive for private buyers. However, the Federal Ministry of Finance is leading the process.
This means that potential electric car buyers currently face uncertainty about future regulations–specifically, whether an electric car registered from 2026 onward will be exempt from vehicle tax and whether this exemption will apply until 2035.
Current Regulation
Pure electric vehicles registered by December 31, 2025, are exempt from vehicle tax from the date of first registration–this exemption is currently valid until December 31, 2030. According to the ADAC, this regulation has been in place since May 2011. Owners of pure electric vehicles pay no vehicle tax for up to ten years from first registration, but as the exemption is limited to December 31, 2030, buyers can no longer take full advantage of the ten-year period. If the vehicle changes ownership, the tax exemption is transferred to the new owner, according to the ADAC.
The CDU, CSU, and SPD have announced in their coalition agreement that they intend to promote e-mobility through various measures–including extending the vehicle tax exemption for electric cars until 2035.
Automotive Industry Demands Planning Security
VDA President Müller commented: “If the vehicle tax exemption expires at the end of the year, fully electric vehicles would actually be taxed more heavily than plug-in hybrids–a contradiction the coalition must urgently resolve to prevent uncertainty and reluctance to buy.” Consumers and businesses urgently need planning security.
Should the tax exemption be abolished, it would be a “blow to the German auto trade,” said Thomas Peckruhn, President of the Central Association of the German Motor Vehicle Trade (ZDK). Already, private customers are showing considerable restraint; without the tax advantage, it would become even more difficult, especially since the promised reduction in electricity tax before the election has not materialized. Such incentives are necessary for customers, he added.
According to the ADAC, under current rules, starting from the eleventh year after first registration or at the latest from January 1, 2031–or for new registrations from 2026–the vehicle tax for electric cars up to 3.5 tons is calculated based on the permissible total weight. For every 200 kilograms or part thereof, the annual vehicle tax is €5.625 up to 2,000 kilograms, €6.01 up to 3,000 kilograms, and €6.39 up to 3,500 kilograms, according to ADAC. “It remains cheaper than comparable combustion engine models.” For example, the first-generation BMW i3 (market launch 2013) has a permissible total weight of 1,630 kilograms, resulting in a minimum tax of €50.
The ADAC described the vehicle tax exemption as “another lever” to support e-mobility. “However, far more important are attractive purchase prices, affordable charging electricity, and, fundamentally, the ability to charge electric vehicles close to home.”
Growth of E-Mobility
The transport sector is failing to meet legally mandated climate targets. E-mobility is expected to play a central role in reducing CO2 emissions from road traffic. While registrations of new electric cars are currently rising, the previously stated political goal of having 15 million fully electric vehicles on German roads by 2030 now seems out of reach. At the start of 2025, there were about 1.65 million pure electric cars in Germany, out of a total of 49.3 million passenger vehicles, according to the Federal Motor Transport Authority.
Impact of Policy Changes
Statistics from the Federal Motor Transport Authority show that buyers of electric vehicles are highly sensitive to changes in incentives. The proportion of electric cars among new registrations has seen significant spikes in December 2023, 2022, and 2021, as well as in August 2022–only to drop sharply and remain subdued for some time afterward.
These fluctuations coincide precisely with the end of the purchase premium in December 2023, its restriction to private buyers from September 2023, the reduction at the end of 2022, and prolonged uncertainty over the extension of the premium at the end of 2021. It is therefore likely that a similar pattern could emerge this time. Recently, after these sharp swings, a relatively stable upward trend had begun to reestablish itself./hoe/DP/he
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