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Germany Plans Targeted EV Purchase Aid for Low- and Middle-Income Buyers

The coalition extended EV tax breaks, with €3 billion reserved through 2029 as the bonus design remains unresolved.

Overview

  • Environment Minister Carsten Schneider said any revived purchase premium would exclude high earners, arguing they can switch without subsidies and already benefit from tax advantages.
  • Schneider confirmed there is no agreement yet on the size of the bonus or the income thresholds, calling a proposed €3,000 grant a contribution to the debate.
  • The government recently prolonged the motor-vehicle tax exemption for electric cars as part of its broader electrification push.
  • Schneider proposed obligations for fuel stations and supermarkets to provide chargers and backed a digital price-comparison platform to make charging cheaper through greater transparency.
  • A review of the 2020–2023 program found it boosted EV uptake but disproportionately benefited wealthier households and showed significant free-rider effects, while political messaging remains mixed as Chancellor Friedrich Merz criticizes the EU’s 2035 combustion-engine phaseout.