For purchasing one Electric cars or plug-in hybrids, there will be a bonus of up to 5,000 euros next year – but only for private individuals with “small or medium incomes”. The coalition committee of the Union and SPD decided this on Friday night. A total of three billion euros is available, which could support 600,000 cars.
There was already a purchase bonus for electric cars – the so-called environmental bonus for private individuals and companies was introduced in 2016 and was abruptly canceled by the traffic light coalition at the end of 2023. The background at the time was the ruling by the Federal Constitutional Court that the budget was unconstitutional – the traffic light therefore had to save billions.
The end of the purchase bonus caused a slump in new registrations of electric cars in 2024. According to the Federal Motor Transport Authority, there were around 1.6 million purely electric cars on Germany’s roads at the beginning of 2025, a share of 3.3 percent of the over 49 million cars in this country. The number of plug-in hybrids was 967,000.
Households with small and medium incomes should benefit
The new purchase bonus is intended to support the demand for low-emission vehicles in road transport and the switch to climate-friendly mobility, according to the coalition resolution. Households with small and medium incomes in particular should benefit “specifically”. Therefore, households with a taxable annual income of up to 80,000 euros should be supported; this limit increases by 5,000 euros per child.
The premium for buying or leasing an electric car or plug-in hybrid should be 3,000 euros – it increases by 500 euros per child, but by a maximum of 1,000 euros. For households with particularly low incomes, a further increase of 1,000 euros is possible. The limit here is set at 3,000 euros net per month. Only private individuals can receive the funding. The car may not be resold immediately afterwards. The funds for the purchase premium should therefore come from the climate and transformation fund.
The exact design of the funding program should now be “finalized” by the end of the year, according to the coalition decision. The program will then be “started as quickly as possible in 2026”. The prerequisite is the approval of the EU Commission.
“Huge boost for the domestic market”
CSU boss Markus Söder (58) emphasized on Friday that the program also includes so-called “local content criteria” – regulations that a certain proportion of the vehicle is manufactured in Europe. It is important “that it is not just about cars that are produced in Asia,” said Söder. They must “also create value for us and secure jobs”. The funding program also strengthens the German economy: “This is a huge boost for the domestic market.”
There was already a purchase bonus for electric cars – the so-called environmental bonus for private individuals and companies was introduced in 2016 and was abruptly canceled by the traffic light coalition at the end of 2023. The background at the time was the ruling by the Federal Constitutional Court that the budget was unconstitutional – the traffic light therefore had to save billions.
Government is promoting the end of combustion engines
The federal government also wants to give the auto industry a helping hand by pushing for a relaxation of the ban on combustion engines in 2035. Chancellor Friedrich Merz (70) announced that he would send a letter to EU Commission President Ursula von der Leyen (67) on Friday asking for a departure from the regulation. According to the federal government’s wishes, plug-in hybrid cars and electric vehicles with a gasoline generator should remain permitted in the future. “Our common goal should be innovation-friendly and technology-open regulation that harmonizes climate protection and industrial competitiveness,” said Merz.
Environment Minister Carsten Schneider (49) spoke of a pragmatic position. The climate impact will remain, but at the same time the industry will have more flexibility on the way to the goal of zero emissions for new cars in 2035. In return, however, the additional emissions that arise when operating combustion engines should be offset, for example through the use of green steel or renewable fuels. “All in all, the climate impact of the current regulation remains intact.”