Germany is getting serious about boosting EV adoption in the country. As defined in the 2030 Climate Action Programme passed in October 2019, the Government aims to have up to 10 million EVs and 1 million charging stations on German roads by 2030. To achieve this ambitious objective, several EV incentives have been extended or added. Additionally, the post-COVID-19 stimulus package of €130 billion passed in June 2020 allocates significant funding into infrastructure development, tax cuts, and further subsidies to invigorate Germany’s EV market.
All this means that current and prospective drivers can enjoy a wide range of grants, tax incentives, and other benefits when purchasing an EV or charger in Germany. In fact, by taking advantage of the full scope of incentives, a Seat Mii Electric can be purchased for less than €11,000. Here is a quick overview of the main incentives available:
- EV Charging Incentives in Germany
- EV Incentives in Germany
- Overview of Government Electrification Initiatives & Policies in Germany
EV Charging Incentives in Germany
National Private EV Charging Incentives
The only nationwide private EV charging incentive, according to our knowledge, is the following subsidy offered by the German state-owned development bank KfW-Bank:
- KfW-Bank: €900 incentive per charging point for the purchase and installation of an EV charger
Download our (German) step-by-step guide on how to apply for an EV charging grant!
National Public EV Charging Incentives
In terms of public charging benefits, the German government aims to have 1 million charging stations in the country by 2030. To achieve this goal, The Federal Ministry of Transport and Digital Infrastructure has introduced an incentive program to encourage the roll-out of public charging stations.
SME EV charging incentive for public chargers
For SMEs, the government has put in place a new 300 million euro incentive program. Applications will be open from 12 April 2021 – 31 December 2021.
The program is especially targeting small and medium-sized enterprises in the retail, hotel and catering industry, as well as small municipal utilities and local authorities. One of the prerequisites of the grant is the use of renewable energy for powering the charging stations. The subsidy covers up to 80% of the total costs for purchase and installation:
- Up to €4,000 per AC/DC charger of 3,7 to 22 kW.
- Up to €16,000 per DC fast chargers of 22 to 50 kW.
- Up to €10,000 for low voltage and up to €100,000 for medium voltage grid connections.
Local & Regional EV Charging Incentives
Additional benefits for private EV charger purchases and installation vary between cities, municipalities, and federal states, and can be found here:
Incentives from cities and states (examples)
- Nordrhein-Westfalen:
- 60% (max. €3,500 for smart, bidirectional chargers; max. €2,000 for other chargers) of purchasing and installation costs of your private EV charger via the Sofortprogramm Elektromobilität (this increased incentive amounts apply until 30 November 2020);
- €500 grant increase if you produce your own sustainable electricity
- €200 grant increase per kWh storage capacity if you install a battery storage point
- Munich: 40% of total net costs (max. €3.000 per charging point of up to 22kW capacity; max. €10.000 per fast charging point with capacity over 22kW): includes purchase price, installation, and planning; can’t be used in combination with the national KfW-bank EV charger grant
- Hannover: €500 incentive for purchasing and installing a smart charging station and
- Limburg: €300 incentive per changing point; can’t be used in combination with the national KfW-bank EV charger grant
Incentives from energy companies and other organizations (examples)
- N‑ERGIE: €250 incentive for purchasing and installing a wallbox charger in Nürnberg and switching to the firms eco-energy tariff
- Stadtwerke Marburg: €4200 incentive for purchasing and installing a wallbox charger; additional 5100€ incentive if you produce your own renewable energy, can’t be used in combination with the national KfW-bank EV charger grant
- Mainzer Stadtwerke: €400 incentive for purchasing and installing a wallbox charger in Mainz and switching to the firms eco-energy tariff
- Stadtwerke Schwedt: €200 incentive for purchasing and installing a wallbox charger in Schwedt and switching to the firms eco-energy tariff
- Wuppertaler Stadtwerke: €1500 incentive for purchasing and installing a fast charger in Wuppertal and switching to the firms eco-energy tariff
- Stadtwerke Rastatt: €100 incentive for purchasing and installing a wallbox charger in Rastatt and switching to the firms eco-energy tariff
This list is by no means exhaustive. For instance, several other incentives are provided by energy companies for the purchase of their own EV chargers. Apart from that, new incentives may be introduced by specific cities, states or organizations in the future. As a result, you might also want to do a quick search on Google for “Ladestation Förderung [name of your city]” to make sure you don’t miss out on any recent changes in policies.
Tax Benefits
- Private and company car owners of plug-in electric vehicles that charge their cars in their employer premises are exempt from declaring this as a cash benefit in their income tax return (in German).
- Company car owners that charge their EVs at home can even benefit from a tax reduction (in German).
- Employers offering free charging of electric vehicles or bicycles will not be taxed for this service until 2030.
EV Incentives in Germany
National EV Incentives
Subsidies
Umweltbonus – save up to €9,000 on the purchase of your EV:
Germany’s ‘Umweltbonus’ (environmental bonus) program offers grants for the purchase or lease of EVs.
Purchase grants: the following incentives are based on the extension of the Umweltbonus (‘Innovationsprämie’), as per the economic stimulus package (German text), and apply for vehicles registered between 4 June 2020 and 31 December 2021:
- For vehicles priced up to €40,000:
- Fully-electric: €9,000
- Plug-in hybrid: €6,750
- For vehicles priced up to €65,000:
- Fully-electric: €7,500
- Plug-in hybrid: €5,625
To find out whether your EV is eligible for a grant and what official price applies for your car model, download the official list of eligible electric vehicles from the Federal Office for Economic Affairs and Export Control here (German text).
In general, car dealers will fill out the grant application form for you. However, if you want to find more information on the grant and complete the application yourself, click here (German text).
Leasing grants: since 21 October 2020, the incentives for leasing an EV will depend on the contract terms. The minimum holding period for leasing is 12 months for a term of 12 to 23 months or 24 months for a term of more than 23 months. For terms of 6 to 11 months, the minimum holding period is 6 months.
- For vehicles priced up to €40,000:
- Fully-electric: €2,250 (for a 6-11 months contract)
- Fully-electric: €4,500 (for a 12-23 months contract)
- Plug-in hybrid: €1,687.50 (for a 6-11 months contract)
- Plug-in hybrid: €3,375 (for a 12-23 months contract)
- For vehicles priced up to €65,000:
- Fully-electric: €1,875 (for a 6-11 months contract)
- Fully-electric: €3,750 (for a 12-23 months contract)
- Plug-in hybrid: €1,406.25 (for a 6-11 months contract)
- Plug-in hybrid: €2,809.50 (for a 12-23 months contract)
Used-car grants: purchases of second-hand EVs and plug-in cars receive the same grant amounts as new EV purchases (see above), as long as they have been registered after 4 November 2019 and haven’t already received the Umweltbonus subsidy before.
AVAS Bonus – save €100 on purchases of your EV if it comes with an AVAS
If you’re buying an EV equipped with an Acoustic Vehicle Alert System (AVAS), you can receive an additional bonus of €100 (valid until 30 June 2021).
Tax Benefits
Kfz-Steuer (motor vehicle tax):
- Fully-electric vehicles registered between 2011 and 2030 have a 10-year exemption from this tax. This means that EV owners in Germany can save, on average, around €194 in ownership tax per car and year. You can use this official calculator (in German) to estimate how much car tax you’d pay if you opt for an ICE car (higher taxes apply to them according to CO2 emissions from 2021 on).
- Plug-in hybrid EVs pay the tax, but it’s lower for them than diesel/gasoline vehicles, in proportion with their lower CO2 emissions.
Company car tax:
- Private usage of a fully-electric company car with a list price below €60,000, is taxed at only 0.25% of the list price per month. In comparison, Internal Combustion Engine (ICE) cars are taxed at 1%.
- Private usage of a hybrid company car or a fully-electric company car with a list price above €60,000, is taxed at only 0.5% of the list price per month. In comparison, ICE cars are taxed at 1%.
VAT:
The temporary reduction in VAT for EV purchases to 16% between 1 July – 30 December 2020 has expired and now stands at 19%.
Local and Regional EV Incentives
Subsidies
Depending on your place of residence, you might also benefit from local incentives of up to €1,500 for the purchase of your EV. These are added on top of the national EV incentives explained above, enabling you to save even more money on your purchase. They are offered by some cities and municipalities and can be accessed if you meet certain criteria. Additional local incentives are also often offered by energy providers to new or existing customers, who sign up for their services. You might want to do a quick search on Google for “Elektroauto Förderung [name of your region/city]” to make sure you don’t miss out on any recent changes in policies.
Additional EV benefits
In 2015 the Electric Mobility Act (EmoG) came into effect with the aim of promoting electric mobility in Germany. Depending on the specific implementation of the law in each federal states and cities, EV drivers can enjoy the following benefits:
- Free parking
- Reserved parking spots
- Bus lane use
This article from the General German Automobile Club (in German) shows some of the specific benefits available in certain regions.
Overview of Government Electrification Initiatives & Policies in Germany
As part of both the new 2030 Climate Plan and the 2020 economic stimulus package, the German government has pledged funds and development rights to different areas of its transport system to reach the updated electrification goals.
Ongoing and new initiatives include:
- Batteries and infrastructure: As part of the new €130 billion package, €2.5 billion will be spent on battery cell production and the expansion of the charging infrastructure, with Germany aiming to have 1 million charging stations by 2030.
- Electrify petrol stations: The German government has announced plans that will require all gas stations to also offer EV charging in the future. This will mean that fuel stations will now function simultaneously as EV charging stations, helping to increase electric mobility.
- Subsidies for manufacturers: as part of a bonus program for 2020 and 2021, to invest in “new technologies, processes, and plants”.
- Fleet exchange programs: as part of the post-COVID-19 economic stimulus package, these are designed to ensure that small and medium-sized enterprises (SMEs) and social services don’t cut back on the renewal of their fleets during the financial uncertainty of the corona and post-corona economy. The first program is Sozial & Mobil, which will promote electric mobility in urban traffic and support non-profit organizations with an allocated fund of €200 million in 2020 and 2021. The second program is designed for tradespeople and SMEs that use EVs of up to 7.5 tonnes.
- Bus and truck funds: for a limited period until the end of 2021, funding for electric buses, trucks and their charging infrastructure will be increased. Private and municipal operators will receive €1.2 billion to switch to alternative drive systems, as an incentive to make urban transport switch to electric.
Further federal initiatives in the field of electromobility, especially in relation to R&D, can be found here. For a detailed search on regional initiatives, it is best to use this federal government database.
Can Germany’s EV Market reach 2030 with a “ka-boom”?
As the world continues to battle the COVID-19 pandemic, industries are beginning to prepare for a recession. In January and February 2021, overall auto sales in Germany fell by 25% compared to the same period last year. This might be due to the fact that in 2021, VAT has returned to 19% (from reduced 16%). However fully electric (+124,2%) and plug-in hybrid cars (+161,9%) continued to thrive in February 2021. This expansion in the EV market during the pandemic is a global trend, and according to this Wall Street Journal article, after seeing the benefits to air quality following worldwide stay-at-home measures consumers are more likely to buy sustainable vehicles. When the new Climate Plan was released at the end of last year, Ferdinand Dudenhoeffer, director of Center for Automotive Research, estimated that 5 million pure electric and hybrid EV registrations by 2030 would be a feasible goal. With the positive growth in EV markets and the new budgets, Germany’s sights to double that goal look promising. Olaf Scholz, finance minister, said the aim was to bring Germany out of the crisis with a “ka-boom”, hopefully exploding their EV market too.
To find out more about incentives in other countries and how they compare to German EV benefits, make sure to check our comprehensive guide on EV and EV charger incentives in Europe.
