German government plans to encourage EV uptake through tax exemptions and other incentives
Wed 18 May 2016
View all news
Germany's cabinet has approved measures worth around 1 billion Euros to provide new incentives and tax breaks to encourage the uptake of electric cars. Germany has set a target of bringing 1 million EVs on to its roads by 2020.
Under the new plans, electric cars will be exempt from paying vehicle tax for ten years with retroactive effect from Jan. 1, 2016. This is an extension of the previous exemption which acted for five years. Employees who charge their electric vehicles at work will also pay a reduced tax rate of 25 percent.
The tax breaks are in addition to plans announced earlier to give buyers of electric cars a 4,000 Euro incentive, while buyers of plug-in hybrid cars will get a premium of 3,000 Euros.
The costs of about 1 billion euros ($1.1 billion) will be shared equally between the government and the car industry. The program includes 300 million euros of spending on charging stations.
Germany currently has about 50,000 purely battery powered vehicles and plug-in hybrids among the 45 million cars using its roads. The government hopes the new incentives will help sell an additional 400,000 electric cars.
Reuters reports that the car industry, Germany’s biggest manufacturing sector by revenue, sees incentives as a potential game changer due to the size of the country’s market, which accounts for nearly a quarter of all auto sales across Europe.
Related Links
< Back to news list