Budget woes in Germany endanger extension of EV tax breaks for private owners – report
Frankfurter Allgemeine Zeitung
Tax breaks for owners of electric vehicles in Germany could fall prey to a government effort to close gaps in the country’s budget, newspaper Frankfurter Allgemeine Zeitung reported.
Finance minister Lars Klingbeil’s statement that tax increases are in the cards to balance the country’s budget have led to fears that a rule which frees private owners of EVs of the vehicle tax until 2030 if they are registered until the end of 2025 will not be extended by five years. Renewed tax breaks for commercial users had been part of the government’s so-called investment booster package before the summer break, but this did not cover buyers of EVs for private use. According to the newspaper, the involved ministries are not preparing an expansion of the scheme, even though the government’s coalition agreement promised tax breaks for electric cars until 2035. According to the finance ministry, extending the tax rebate “like any other measure in the coalition agreement is subject to financing proviso,” the newspaper said. The transport ministry told the newspaper that further measures to boost the uptake of EVs "will be implemented depending on market developments and the budget situation."
Car industry lobby group VDA said the government was required to act now and implement the tax break extension until 2035. Otherwise, potential buyers would continue to delay purchases and increase pressure on the industry, VDA head Hildegard Müller told the newspaper. Other measures Müller called for included improving the charging infrastructure and lowering power prices.
There were about 1.65 million purely electric vehicles registered in Germany as of January 2025. The previous government had aimed to bring this up to 15 million EVs on the road by 2030. Austerity measures during a budget crisis included a sudden end to purchase premiums for EVs, which hit sales significantly and has not yet been replaced with a comprehensive follow-up scheme or expansion target by the new government under chancellor Friedrich Merz.
