German government confirms tax exemption for electric cars to continue
dpa / Spiegel
Germany’s government has confirmed it will extend the vehicle tax exemption for electric cars. Finance minister Lars Klingbeil told newswire dpa he will table a law to prolong the existing exemption until 2035, according to a Spiegel report. The current exemption is due to expire at the start of next year.
Klingbeil said the vehicle tax exemption is one of the measures on the agenda of chancellor Friedrich Merz’s “car summit” on Thursday, where he will meet industry leaders, unions and regional officials to discuss ways to address the car industry’s crisis.
Germany’s car industry, one of the country’s largest industrial sectors, is struggling with low sales, increasing Chinese competition, US tariffs, and the transition to electric vehicles. Several suppliers announced plans in the past weeks to cut thousands of jobs in response to the crisis.
“We must now put together a strong package to lead the German automotive industry into the future and secure jobs,” Klingbeil said. He added that the sector is in the midst of a transformation and that “everyone knows the future is electric.”
Car industry association VDA has urged the government to rapidly implement its coalition treaty promise to extend the tax exemption. Participants at the car summit could also discuss a social leasing programme to support low- and medium-income households in switching to electric mobility, another promise by Merz’s conservative Christian Democratic Union (CDU) and Klingbeil’s Social Democratic Party (SPD).
The EU’s 2035 ban on the sale of new combustion engines is also likely to be a topic at the talks. The VDA and Merz have called for reversing the ban to help industry, but SPD environment minister Carsten Schneider said he wanted it to stay in place.
