New Electric Car Incentive Starting in 2026.
Jun 23, 2026
After the environmental bonus expired at the end of 2023, there was no direct government purchase incentive for electric cars in 2024 and 2025.
Many clients were therefore faced with the question of whether switching to electric mobility still made financial sense. That has since changed: A new, income-based electric car incentive for private individuals was introduced starting in 2026. Entrepreneurs, on the other hand, continue to benefit in particular from tax breaks and expanded depreciation options for company-owned electric vehicles.
Starting in 2026, fully electric vehicles, as well as certain plug-in hybrids and vehicles with range extenders, will be eligible for subsidies.
The amount depends on taxable household income and the number of children:
Household income (annual): Up to €45,000 + 2 children
Incentive for all-electric cars: €6,000
Incentive for plug-in hybrids: €4,500
Household income (annual): Up to 45,000 €
Incentive for all-electric cars: 5,000 €
Incentive for plug-in hybrids: 4,000 €
Household income (annual): Up to 60,000 €
Incentive for all-electric cars: 4,000 €
Incentive for plug-in hybrids: €3,500
Household income (annual): Up to €80,000 (up to €90,000 with 2 children)
Incentive for all-electric cars: €3,000 (base subsidy)
Incentive for plug-in hybrids: €1,500
The subsidy increases by €500 per child, up to a maximum of €1,000.
Key Requirements at a Glance
- New vehicle registration required as of January 1, 2026
- Applications can be submitted online to the Federal Office for Economic Affairs and Export Control (BAFA) starting May 19, 2026
- Eligible vehicles must be kept for at least 3 years
- For plug-in hybrids: Max. 60 g CO₂/km or at least 80 km of electric range
- Used cars are not eligible
- You will need: a BundID account, two recent income tax assessment notices
Tax Incentives for Electric Vehicles as Business Assets
Instead of the general electric car incentive, business buyers benefit in particular from the following provisions:
- When purchasing a fully electric vehicle between July 1, 2025, and December 31, 2027, 75% of the acquisition cost can be depreciated in the year of purchase. The remaining 25% of the acquisition cost is depreciated in subsequent years according to percentages specified by law.
- Vehicle tax exemption for fully electric cars through the end of 2035.
- Company car taxation: Raising the price limit to €100,000 for the 0.25% rule for electric vehicles.
Starting in 2026, the new electric vehicle subsidy program will once again provide significant financial incentives for switching to electric mobility. Depending on their income and the number of eligible children, individuals can receive subsidies of up to €6,000. Business owners will continue to benefit in particular from tax breaks and expanded depreciation options for electric vehicles.
We would be happy to review the eligibility requirements and tax implications for you on a case-by-case basis.
Note: The information above has been compiled to the best of our knowledge and is provided for general informational purposes only. It is not a substitute for individual tax or legal advice. The applicable legal regulations and the circumstances of each individual case are decisive.