German carmakers welcome new EV support via tax write-offs - minister

The new support mechanism for accelerating the roll-out of electric vehicles in Germany through increased tax write-offs for company cars has been received well by the automotive industry, economy minister Robert Habeck has said. “They were very content,” Habeck said in an interview with news station n-tv after visiting a factory of carmaker Daimler in Stuttgart. As part of last week's agreement on the 2025 budget, the government increased the price threshold for eligible cars to 95,000 euros, thus including many models made by the country's luxury carmakers. The government said the budget included “record” investments in climate action and energy transition measures as well as a “growth initiative” that is supposed to reinvigorate Germany’s industry after the slump in the wake of the energy crisis. Habeck said Germany’s carmakers were particularly strong in selling company vehicles which, according to the Federal Environment Agency (UBA), account for about 60 percent of all new registrations in Germany. “They need support now,” Habeck said, arguing that “this is about industry locations, many jobs, and economic power.” He added that the scheme would retroactively apply from 1 July and remain in place until 2028.

Daimler CEO Ola Källenius welcomed the government’s new EV support scheme. “Policymakers not only have to set the right framework conditions, they also have to give impulses,” Källenius told newspaper Die Welt during Habeck’s visit in Stuttgart, praising the Green Party minister's "can-do mentality.” However, the Daimler manager also said that his company had abandoned the goal of becoming a purely electric vehicle brand in Europe by 2030, opting instead to continue developing internal combustion engines well into the 2030s amid expected demand from customers.

The novel support scheme replaces the buyer’s premium that the government scrapped at the end of last year due to unforeseen budget constraints following a court ruling that declared parts of Germany’s earmarked climate and transition funding as unlawfully booked. While the premium was available to all customers, the tax write-offs for EVs are only available to businesses. Industry representatives and other observers had criticised last year's sudden subsidy cut, warning that this could deal a heavy blow to the budding e-car market in the country, which plummeted after the initial support mechanism was stopped.