The Federal Government’s aim in launching its Growth Initiative is to support the automotive industry and its employees in pursuing the e-mobility modernisation project. The idea is that tax incentives on electric cars used for business purposes will help boost demand for zero-emission vehicles, while at the same time increasing Germany’s appeal as an industrial base.

What specific subsidies are available for electrically powered company cars?

Offsetting of the cost of newly registered, purely electric and emission-free company vehicles is to be accelerated by means of a new special tax write-off. It extends over a period of six years and starts at a rate of 40 percent, thereby giving companies additional liquidity. The regulation applies for a limited period for vehicles purchased from July 2024 to December 2028.

Company car tax benefits will be extended for electric vehicles, too:  employees who also use their electrically powered company car for private purposes will pay a reduced rate of tax. This previously only applied if the car cost a maximum of 70,000 euros according to the so-called gross list price. This amount will now be increased to 95,000 euros. The new limit applies to company cars purchased from July 2024 onwards.

See here for details of the Growth Initiative.

The Federal Government has decided to incorporate the agreed tax regulations in the Tax Reform Act by means of the parliamentary procedure.