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Germany to Offer Corporate Tax Write-Offs for Electric Fleets as EV Registrations Surge

Under the draft law firms could write off three quarters of an electric vehicle’s cost in its first year, prompting warnings of a cheap-vehicle glut.

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Overview

  • German EV registrations rose 45% in May to 43,000 units, making up 18% of all new-car sales according to KBA and ADAC.
  • The Finance Ministry’s draft investment law would allow companies to deduct 75% of an EV’s purchase price in year one and decreasing allowances over the next four years for vehicles bought through December 2027.
  • Auto expert Ferdinand Dudenhöfer warns that large-scale leasing and write-offs could flood the used-car market with returned EVs in about two years, eroding residual values.
  • ZF Friedrichshafen has launched a carve-out review of its loss-making electric division, and Volkswagen has secured 20,000 exit agreements as part of its plan to cut 35,000 jobs in Germany by 2030.
  • Average new-car prices climbed 39% between 2019 and 2024, limiting affordable EV options even as a wave of inexpensive lease returns looms.