Germany is intensifying efforts to encourage EV adoption within its borders. Outlined in the 2030 Climate Action Programme, which was enacted in October 2019, the government sets forth a vision to have up to 10 million EVs and 1 million charging stations across the country by the year 2030. To reach this bold goal, a variety of EV incentives have been introduced or expanded. Moreover, the €130 billion stimulus package announced in June 2020, in response to the COVID-19 pandemic, dedicates substantial resources to infrastructure development, tax reductions, and additional subsidies aimed at stimulating Germany’s EV market.
This strategic push means that both existing and future EV drivers have access to a broad spectrum of grants, tax benefits, and other incentives for acquiring an EV or charging equipment in Germany. Leveraging these incentives to their fullest could allow for the acquisition of an EV, such as the Seat Mii Electric, for under €11,000.
Nationwide Incentives for Private EV Charging Stations
To our knowledge, the primary nationwide incentive for private EV charging installations comes from the German state-owned KfW-Bank:
- KfW-Bank Subsidy: Offers a €900 incentive for each charging point, covering both the purchase and installation of an EV charger.
Incentives for Public EV Charging Stations Nationwide
The German government is committed to establishing 1 million charging stations across the nation by 2030. To support this ambitious target, The Federal Ministry of Transport and Digital Infrastructure has launched a program aimed at accelerating the deployment of public charging infrastructure.
SME Incentive for Public Charging Infrastructure
A new incentive program, endowed with €300 million, is designed to assist small and medium-sized enterprises (SMEs), particularly those in the retail, hospitality, and catering sectors, as well as small municipal utilities and local governing bodies. This initiative, which runs from 12 April 2021 to 31 December 2021, prioritizes the integration of renewable energy sources for the operation of charging stations. It offers substantial financial support, covering up to 80% of the expenses related to the acquisition and setup of charging solutions:
- Up to €4,000 for each AC/DC charging station with a capacity of 3.7 to 22 kW.
- Up to €16,000 for DC fast-charging stations ranging from 22 to 50 kW.
- Additional funding of up to €10,000 for low voltage and up to €100,000 for medium voltage grid connections is also available.
Local & Regional Incentives for EV Charging Benefits
Local and regional incentives for the installation of private EV chargers can significantly vary across different areas. These benefits are provided by cities, municipalities, federal states, energy companies, and other organizations. Below are some examples of these incentives:
City and State Incentives (Examples):
- Nordrhein-Westfalen:
- 60% subsidy on purchase and installation costs for smart, bidirectional chargers (up to €3,500) and other chargers (up to €2,000) through the Sofortprogramm Elektromobilität (valid until 30 November 2020).
- €500 grant for using your own sustainable electricity
- €200 per kWh storage capacity for installing a battery storage system.
- Munich:
- 40% of total net costs (up to €3,000 per charging point of up to 22kW capacity and up to €10,000 for fast charging points over 22kW), covering purchase, installation, and planning costs. Not combinable with the national KfW-bank EV charger grant.
- Hannover: offers a €500 incentive for smart charging stations
- Limburg: offers a €300 incentive per charging point. Neither can be combined with the KfW-bank grant.
Tax Incentives
- Plug-in electric vehicle owners, including both private and company cars, charging at their workplace, do not need to list this as a taxable benefit in their income tax documentation.
- Individuals with company EVs who charge at home could qualify for a tax reduction.
- Employers providing free charging services for electric cars or bicycles are exempt from taxation on this benefit up until 2030.
National EV Incentives Overview
Subsidies: Umweltbonus Program
Germany’s “Umweltbonus” (environmental bonus) offers substantial savings on the purchase or lease of electric vehicles (EVs), part of the nation’s efforts to promote cleaner transportation.
Purchase Grants:
The enhanced “Umweltbonus” or “Innovationsprämie” comes under the economic stimulus package, applicable for vehicles registered from 4 June 2020 to 31 December 2021:
- For vehicles with a price tag up to €40,000:
- Fully-electric vehicles: €9,000 grant
- Plug-in hybrids: €6,750 grant
- For vehicles priced up to €65,000:
- Fully-electric vehicles: €7,500 grant
- Plug-in hybrids: €5,625 grant
To verify if your EV qualifies for a grant and to check the official price for your car model, you can download the list of eligible electric vehicles from the Federal Office for Economic Affairs and Export Control.
Typically, car dealerships handle the grant application process on your behalf. However, for those interested in understanding more about the grant or applying independently, further information is available.
Leasing Grants:
As of 21 October 2020, leasing incentives for EVs are determined by the lease term:
- For lease terms of 12 to 23 months, a minimum holding period of 12 months is required.
- For lease terms over 23 months, the minimum holding period is 24 months.
- For lease terms of 6 to 11 months, the minimum holding period is 6 months.
Leasing Incentives for Vehicles Up to €40,000:
- Fully-electric vehicles:
- €2,250 for contracts of 6-11 months
- €4,500 for contracts of 12-23 months
- Plug-in hybrids:
- €1,687.50 for contracts of 6-11 months
- €3,375 for contracts of 12-23 months
- Leasing Incentives for Vehicles Up to €65,000:
- Fully-electric vehicles:
- €1,875 for contracts of 6-11 months
- €3,750 for contracts of 12-23 months
- Plug-in hybrids:
- €1,406.25 for contracts of 6-11 months
- €2,812.50 for contracts of 12-23 months
- Fully-electric vehicles:
Incentives for Second-Hand EVs and Plug-in Hybrids:
Second-hand EVs and plug-in hybrid vehicles are eligible for the same grant amounts as new EV purchases listed above, provided they were registered after 4 November 2019 and have not previously received the Umwelt Bonus subsidy.
**AVAS Bonus – Get €100 Off Your EV Purchase with AVAS**
Enjoy a €100 bonus when purchasing an EV equipped with an Acoustic Vehicle Alert System (AVAS), valid until 30 June 2021.
Tax Advantages for EV Owners
Motor Vehicle Tax (Kfz-Steuer):
- Fully-electric vehicles registered from 2011 to 2030 benefit from a 10-year exemption from this tax, potentially saving EV owners an average of €194 per vehicle per year in ownership tax. Use this [official calculator](#) to compare the tax for ICE vehicles, which are subject to higher rates based on CO2 emissions starting from 2021.
- Plug-in hybrid vehicles are also subject to the tax but at a lower rate than their diesel or gasoline counterparts, reflecting their reduced CO2 emissions.
Company Car Tax:
- The private use of a fully-electric company car valued below €60,000 is taxed at just 0.25% of the list price monthly, significantly lower than the 1% rate for ICE vehicles.
- For hybrid company cars or fully-electric cars with a list price over €60,000, the tax rate is 0.5% of the list price per month, compared to 1% for ICE vehicles.
Value Added Tax (VAT):
- The temporary VAT reduction for EV purchases to 16% that was in effect from 1 July to 30 December 2020 has ended, with the rate now back to 19%.
Local & Regional Incentives for EV Purchases
Subsidies:
Residents in various locations may be eligible for local incentives up to €1,500 for purchasing an EV, in addition to the national incentives previously discussed. Offered by select cities and municipalities, these subsidies aim to further reduce the cost of your EV purchase if you meet specific criteria. Energy providers may also offer additional incentives to their new or existing customers who opt for electric vehicles. It’s advisable to conduct a search with “Elektroauto Förderung [your region/city]” to stay updated on any policy changes.
Additional EV Benefits:
The Electric Mobility Act (EmoG), enacted in 2015, seeks to advance electric mobility across Germany. The benefits for EV drivers, varying by federal state and city, may include:
- Free parking
- Reserved parking spots
- Permission to use bus lanes
For specific regional benefits, consult resources like the General German Automobile Club (ADAC) [here](#) (article in German).
Overview of Germany’s Electrification Initiatives and Policies:
The German government’s commitment to electrification is evident in the 2030 Climate Plan and the 2020 economic stimulus package, with significant investments aimed at achieving updated electrification targets. Key initiatives include:
- Battery and Infrastructure Development:** The €130 billion stimulus package includes €2.5 billion for battery cell production and charging infrastructure expansion, with a goal of installing 1 million charging stations by 2030.
- Electrification of Petrol Stations:** Future regulations will mandate that all gas stations in Germany offer EV charging, transforming them into dual-service stations to promote electric mobility.
- Manufacturer Subsidies:** A bonus program for 2020 and 2021 encourages investment in new technologies and infrastructure.
- Fleet Exchange Programs:** To support SMEs and social services in renewing their fleets without financial strain, programs like “Sozial & Mobil” and others are designed to foster electric mobility, with €200 million allocated for 2020 and 2021.
- Bus and Truck Funding: Until the end of 2021, increased funding is available for electric buses, trucks, and their charging infrastructure. Private and municipal operators are encouraged to switch to alternative drive systems with a €1.2 billion fund.