Drivers of electric vehicles will continue to enjoy exemption from vehicle tax in the coming years. On Wednesday, the German federal government approved a five-year extension of the tax relief. Federal Finance Minister Lars Klingbeil (SPD) stated, “This helps everyone switching to e-cars and supports the automotive industry.”
Under current law, the tax exemption for newly registered purely electric vehicles would have expired in January 2026. According to the cabinet decision, new registrations or vehicle conversions will now be tax-free until the end of 2030, with a maximum exemption period of ten years. This period will be extended by another five years to 2035. Only those who purchase and register an electric vehicle by the end of this year can fully benefit from the ten-year exemption.
The Federal Ministry of Finance also pointed to the coalition committee’s early October decision to promote climate-neutral mobility. Three billion euros are set aside for a support program targeting individuals with low and middle incomes to facilitate the switch to emission-free vehicles. Funding will come from the Climate and Transformation Fund as well as the EU Climate Social Fund, with the program running until 2029.
The already approved “investment booster” includes an additional special depreciation for companies purchasing electric vehicles: businesses buying an e-car worth up to 100,000 euros can deduct 75 percent of the cost in the acquisition year.
The Finance Ministry noted that citizens who purchase an electric vehicle early will benefit from tax relief totaling 50 million euros in 2026, increasing to up to 380 million euros annually by 2030. Klingbeil emphasized, “Through a variety of additional measures, the government aims to lead the German automotive industry into the future and secure jobs. The best cars should continue to be built in Germany.”
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