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Germany’s Auto Outlook: VDA Sees Tepid 2026 Recovery as EV Surge Hinges on New Subsidy

Berlin and six allies are pressing Brussels to soften the 2035 combustion‑engine phaseout, with a Commission support package still awaiting a firm unveiling date.

Overview

  • The VDA projects a 2% rise in 2026 passenger‑car registrations to about 2.9 million, leaving the market roughly 20% below 2019 levels.
  • The association forecasts 693,000 new battery‑electric cars next year—about 30% growth—conditional on swift, clearly administered private‑purchase support from Germany.
  • Trade groups VDIK and ZDK are more upbeat, signaling up to 740,000 new BEVs and roughly 1.1 million electrified sales overall if incentives start quickly.
  • Plug‑in hybrid registrations are expected to slip 5% in 2026 to around 286,000 after a fleet‑driven boom tied to the 0.5% company‑car tax rule, with corporate buyers taking the vast majority.
  • Germany and six EU states are urging exemptions for hybrids and alternative fuels as the Commission prepares an auto package that reports suggest could be unveiled around December 16 or later, while fleet operators warn against strict EV quotas after recent losses and charging gaps.