Overview

• Reports say the incentive would start on 1 January 2026 with up to €4,000 for battery‑electric cars priced under €45,000, with used EVs also eligible.
• Financing is slated to draw on the EU Climate Social Fund plus €3 billion from Germany’s Climate and Transformation Fund, with allocations planned through 2029.
• The coalition’s plan is aimed at low‑ and middle‑income households, but the final design and eligibility rules remain under negotiation, including whether it will be a purchase bonus or a social‑leasing model.
• Administration would follow the prior scheme’s playbook, with BAFA expected to handle applications once rules are finalized, according to trade press reporting.
• At the EU level, Ursula von der Leyen has launched work on a small, affordable EV class, while Chancellor Friedrich Merz has questioned keeping the 2035 combustion‑engine sales ban in its current form, and reports flag moves to extend EV road‑tax exemptions and potentially raise levies on combustion cars.