Germany’s Social Democratic Party (SPD) has outlined plans to boost the domestic electric vehicle (EV) market with tax incentives exclusively benefiting electric cars “made in Germany.” The proposal, part of the SPD’s newly unveiled election manifesto, aims to stimulate sales while emphasizing local production. According to reports by Handelsblatt and Reuters, the initiative includes a temporary tax deduction for German-produced EVs, offering buyers a direct subsidy via tax declarations.
The manifesto calls for EU Commission collaboration to either implement similar measures across Europe or approve Germany’s national program. Additional proposals include extending the motor vehicle tax exemption for electric cars until 2035, improving depreciation rules, and reforming company car taxation to favor EVs. The SPD also plans to revive hydrogen economy support and enhance funding for research into sustainable technologies.
The broader industrial policy outlined by the SPD focuses on targeted investments, including a “Made in Germany” premium and a Germany Fund aimed at mobilizing public and private capital to boost projects like expanding the national EV charging infrastructure. The party also advocates loosening the debt brake to allow for increased federal and state investments, contrasting with the CDU/CSU and FDP’s preference for general corporate tax cuts.
Other political parties are also proposing measures to modernize Germany’s automotive industry ahead of elections. The Green Party has suggested offering charging credits for public charging stations and leveraging tax incentives, with candidate Robert Habeck emphasizing the need for comprehensive support to transition the automotive sector toward sustainability. The SPD will formally present its program on Tuesday.
