Overview
- The government reallocated the 2027 purchase premium to €1.72 billion while keeping the overall program cap at €3 billion, a move meant to keep subsidies flowing in the near term.
- BAFA has approved roughly 100,000 subsidy applications and paid out more than €430 million, and recent monthly outflows near €200 million mean the pot could run out by autumn 2027 if spending continues at that pace.
- Consumer demand for battery electric cars has surged, with EVs reaching about 37 percent of new passenger-car registrations in October 2026, roughly 94,000 vehicles, driven largely by high fuel costs and the state premium.
- Supply and infrastructure strains are growing: charging grants for multi-unit buildings are exhausted and closed, popular EV models face delivery waits that can reach a year or more, and automakers report squeezed margins and write-downs while batteries remain concentrated in China.
- The policy choices now force a trade-off for ministers and buyers: the government must decide whether to top up the fund or tighten subsidies, and buyers risk losing support because payouts are made only after a vehicle’s first registration.