The German government plans to extend the vehicle tax exemption for electric cars until 2035, Federal Finance Minister Lars Klingbeil said, reviving a measure that had faced uncertainty due to budget constraints.
“In order to get many more electric cars on the road in the coming years, we need to provide the right incentives now. That is why we will continue to exempt electric cars from vehicle tax,” Klingbeil told the German Press Agency (DPA).
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Under the proposal, the exemption would apply to newly registered pure electric vehicles until the end of 2030, and the measure itself would remain valid until 2035, according to the Finance Ministry. The extension is intended to encourage early purchases of fully electric vehicles, though the ministry expects tax revenue losses of several hundred million euros.
The current Motor Vehicle Tax Act stipulates that the exemption for new EVs would end on Jan. 1, 2026, prompting urgency to pass the amendment. The policy is part of a broader set of initiatives agreed upon by Germany’s governing coalition—comprising the CDU, CSU and SPD—to strengthen the automotive industry. Other measures already enacted include raising the gross price limit for EV tax incentives to €100,000 and maintaining a special depreciation allowance for electric vehicles.
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Klingbeil’s announcement coincides with an upcoming automotive summit at the Chancellery, where Chancellor Friedrich Merz is set to meet officials from federal ministries, states, industry representatives, and trade unions. The discussions will cover international topics such as sales trends in China and the tariff dispute with the United States, alongside domestic policy measures.
“We must now put together a strong package to lead the German automotive industry into the future and secure jobs. We want the best cars to continue to be built in Germany,” Klingbeil said, adding that “the future is electric.”
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According to DPA, the meeting may also revisit a proposed support program for low- and middle-income households, modeled after France’s social leasing scheme, which aims to make electric mobility more accessible. The initiative, agreed upon in the coalition pact, has seen little progress since its initial announcement.
Source: Handelsblatt