Electric Car Subsidies 2026: This is the Current Status
Major changes to the subsidies for electric cars are coming again in 2026. If you're considering driving or buying an electric car, you should keep a close eye on the latest developments and opportunities.
At the end of 2025, the German government decided to reintroduce a purchase incentive for electric cars starting in 2026. Here you can find out which subsidies are currently in place, what is planned for 2026, and how you can save money when buying an electric car.
The plans for electric car subsidies in 2026
Here you will find an overview of the most important points regarding electric car subsidies from recent years and from 2026 onwards:
- No more BAFA funding: Since December 18, 2023, there is no longer a government purchase premium in the form of the environmental bonus for private individuals.
- The electric car subsidy applies to leasing, new and used car purchases, and car financing.
- Funding from 2026: The German Federal Government approved a new funding program in November 2025. From 2026, there will again be a purchase premium of at least €3,000 for low- and middle-income households.
- Gross list price: The limit for the reduced company car taxation has been raised from €70,000 to €100,000 (applies to vehicles from July 2025).
- GHG quota: Despite the elimination of the original environmental bonus, alternative funding opportunities exist such as the greenhouse gas reduction quota (GHG quota) and local subsidies, which can provide financial support for the purchase of electric cars.
- Manufacturer discounts: Car manufacturers offer their own incentives and subsidies such as discounts, free additional services and special financing offers to make the purchase of electric cars more attractive.
Electric car owners continue to benefit from tax advantages, such as exemption from electric vehicle tax until 2035 and the possibility of generating additional income by selling the GHG quota.
The German Federal Government approved a new subsidy program for electric cars in autumn 2025. The coalition committee agreed on the final key points on November 27/28, 2025:
- Basic funding: €3,000 for purely battery electric vehicles (BEVs) and plug-in hybrids
- Child bonus: An additional €500 per child (for up to two children), so a maximum of €1,000 extra.
- Income bonus: For net household income below €3,000, the subsidy increases by a further €1,000.
- Maximum funding: Up to €5,000 for low-income families.
- Income limit: Maximum taxable annual household income of €80,000 (plus €5,000 per child)
- Start: Expected early 2026, subject to EU approval
Note: The exact funding guidelines will be published by the end of 2025. The Federal Ministry for the Environment is also examining whether used electric cars can be subsidized in a second phase.
Tax advantages for companies
The German Federal Government has (as of the end of 2025) adopted several new tax and investment measures to promote the sale of electric vehicles.
This includes:
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A special accelerated depreciation allowance (degressive depreciation) of 75% in the year of acquisition for company electric vehicles (applies to purchases between June 30, 2025 and December 31, 2027). In subsequent years, the allowances are 10%, 5%, 5%, 3% and 2%
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An extension of the 0.25% company car rule to vehicles with a gross list price of up to €100,000.
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An extension of the vehicle tax exemption for purely electric cars until 2035 (decided on December 4, 2025 by the Bundestag).
Changes to government subsidies for electric cars in 2026
The adjustments to the electric vehicle subsidy program affect both new car buyers and those interested in young used cars. From ordering before the end of the year (2023) to registration and the specific criteria for used electric cars – it's essential to know all the details.
What does the environmental bonus actually mean?
In 2016, the German government introduced the environmental bonus together with the car manufacturers. The environmental bonus
- is financial support that was granted when purchasing an electric car.
- It consists of two parts: the manufacturer's share and the government's share.
The aim of this bonus is to make the purchase of environmentally friendly vehicles more attractive and thus contribute to reducing CO₂ emissions in the transport sector.
The environmental bonus was discontinued at the end of 2023. However, a new government purchase premium for private individuals will be available again from 2026.
Hybrid vs. Electric
Both hybrid and electric cars received financial incentives. But what exactly is the difference, and which drive system suits you better – hybrid or electric ?
What were the requirements for the environmental bonus?
To be eligible for electric car subsidies, several criteria had to be met:
- The vehicle model had to be on the list of eligible vehicles of the Federal Office for Economic Affairs and Export Control (BAFA) and be an electric car or plug-in hybrid (until 2023).
- Purchase date and registration period: To receive the full subsidy, electric cars had to be ordered by December 31, 2023, and registered by January 31, 2024, at the latest. For new orders placed by January 31, 2024, only the manufacturer's share will be paid.
- The initial registration should have taken place no more than twelve months ago.
- The electric car was not allowed to exceed a maximum mileage of 15,000 km at the time of purchase.
- No environmental bonus may have been claimed for the electric car .
- Application process: The application for the environmental bonus had to be submitted to the Federal Office for Economic Affairs and Export Control (BAFA).
The manufacturer's share was usually credited immediately, while the BAFA subsidy had to be applied for by you directly from BAFA. This means you initially paid the government's share to the dealer and received it back upon successful approval.
Why are we writing this paragraph in the past tense? The reason is that no new applications for the environmental bonus can be submitted to BAFA anymore.
How high was the subsidy for electric cars until the end of 2023?
In 2023, the amount of the electric car subsidy depended on the vehicle type as well as the date of order and registration of the vehicle:
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For all electric cars ordered up to and including December 17, 2023, a full subsidy (government share plus manufacturer share) was paid.
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For registration within 2023, a subsidy of up to 6,750 euros could be expected (federal + manufacturer's share added).
A reduced subsidy rate already applied to all vehicles registered between January 1st and March 31st, 2024.
The end of the environmental bonus and its effects
On November 15, 2023, the Federal Constitutional Court ruled that the 60 billion euros earmarked for combating the Corona pandemic, but not spent, may not be used for the Climate and Transformation Fund (KTF).
The KTF finances and supports numerous projects in the field of climate policy, including the environmental bonus, often referred to as the electric car premium.
Against this backdrop, the German government was forced to reconsider the 2024 budget and decided to end subsidies for electric cars earlier than originally planned. For consumers, this means that the government subsidy program for electric vehicles was discontinued on December 17, 2023.
This is what electric car subsidies will look like in 2026.
Despite the end of the environmental bonus, there are still ways to obtain financial support when purchasing an electric car.
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One such possibility is the greenhouse gas reduction quota (GHG quota).
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Vehicle owners can earn an annual premium by selling GHG certificates to companies subject to quotas.
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The greenhouse gas (GHG) premium has risen again after reaching a low point in 2024 (approx. €50–100). Premiums of €200 to €260 are possible for 2026.
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Furthermore, some cities and municipalities are actively promoting the purchase of electric cars.
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e.g.: through local subsidies or through free or discounted parking offers for electric vehicles
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From 2026: New purchase bonus for private individuals
Private individuals with a taxable household income of up to €80,000 can again apply for a government purchase premium of €3,000 to €5,000 from 2026 onwards.
Tax advantages and GHG quota
Your electric car offers you tax advantages that you shouldn't overlook.
On December 4, 2025, the German Bundestag extended the vehicle tax exemption for electric cars: If your electric car is first registered by the end of 2030, you will enjoy this tax exemption for a period of ten years from the date of first registration – up to a maximum of 2035.
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Until 2030, you will be exempt from vehicle tax for your electric car.
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This regulation applies to all electric vehicles registered within this period, with the tax exemption lasting a maximum of ten years.
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The sooner you register your vehicle, the longer you will benefit from the elimination of vehicle tax.
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For an electric car registered in 2025, this results in a tax-free period until a maximum of 2035.
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provided the approval was granted less than ten years prior
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In addition to tax exemption, the greenhouse gas reduction quota (GHG quota) opens up further financial opportunities for you. As an electric car owner, you can benefit from the so-called GHG bonus once a year.
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The greenhouse gas premium has recovered: After reaching a low point in 2024 (approx. €50–100), premiums for 2026 are again between €200 and €260.
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To sell your GHG quota, you must first submit some information such as your name and bank details, as well as a photo of your vehicle registration document, to the Federal Environment Agency.
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You will then receive a certificate.
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You can sell this environmental certificate to companies that rely on such quotas to comply with their CO₂ balance.
These two aspects – the exemption from vehicle tax and the additional income through the GHG quota – represent important pillars in the funding landscape for electromobility and offer you, as an electric car owner, financial incentives to contribute to climate protection and save costs in the long term.
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Electric car subsidies: Cancellation and withdrawal from the purchase contract
The environmental bonus expired at the end of 2023. For the new funding program starting in 2026, there is no guaranteed entitlement to government subsidies. Funding is allocated on a first-come, first-served basis, depending on the available resources in the climate fund's budget. If the funds are exhausted, a pause in approvals may occur, as has already happened.
The date of vehicle registration is decisive for the amount of funding; a purchase or lease agreement alone does not guarantee funding. Funding applications are only possible after registration. If the funding conditions change between purchase and registration, the regulations in effect at the time of registration apply. This means that no funding will be granted for electric cars ordered in 2023 but registered after December 17, 2023.
Regarding cancellation of the purchase contract: There is no general right of withdrawal, and ordering a vehicle is binding unless otherwise stipulated in the contract. Sellers are only obligated to deliver a defect-free vehicle, not to secure government subsidies. However, you can usually withdraw from the contract by paying a cancellation fee of 15% of the purchase price. If you wish to cancel financing or a lease , as a private buyer you have the option to do so within two weeks.
When purchasing electric vehicles online, buyers have a good chance of withdrawing from the contract under distance selling regulations, provided that negotiations and the conclusion of the contract took place exclusively digitally or by mail. The cancellation period of at least 14 days begins upon delivery of the vehicle. In the event of cancellation, the amount already paid must be refunded within 14 days. If the vehicle has not yet been used or registered, you, as the buyer, will receive a full refund.
Legal entitlements
The receipt of funding does not constitute an automatic legal entitlement; it is contingent upon fulfilling all specified requirements. The exact application deadlines and holding period requirements for the new funding program starting in 2026 will be defined in the funding guidelines, which are scheduled for publication by the end of 2025
Electric car subsidies 2026: Conclusion
The landscape of electric vehicle subsidies in Germany underwent a fundamental change in 2025 – for the better. Following the abrupt end of the environmental bonus at the end of 2023, a new government purchase premium will return in 2026. With subsidies of up to €5,000 for low-income families, the government is specifically focusing on social equity in the transition to electric mobility.
The combination of the new purchase premium, improved tax advantages for companies (accelerated depreciation of 75% in the first year, higher gross list price limit of €100,000), the extended vehicle tax exemption until 2035, the recovered GHG quota and manufacturer discounts makes 2026 an attractive year to switch to an electric car.
FAQs
Which electric cars will still be subsidized in 2026?
Starting in 2026, electric cars will again be subsidized. The new purchase premium applies to purely battery electric vehicles (BEVs) and plug-in hybrids. Eligible individuals have a taxable annual household income of no more than €80,000 (plus €5,000 per child for up to two children).
How high will the new electric car subsidy be in 2026?
The basic subsidy is €3,000. With the child bonus (€500 per child, max. €1,000) and income bonus (€1,000 for net household income below €3,000), subsidies of up to €5,000 are possible.
When will subsidies for electric cars end?
Subsidies for electric cars were discontinued on December 17, 2023. This was announced at short notice by the Federal Ministry for Economic Affairs and Energy after a ruling by the Federal Constitutional Court led to cuts in the Climate and Transformation Fund.
How long will subsidies for electric cars continue?
Government subsidies for electric cars ended on December 17, 2023, meaning no new applications can be submitted after that date. However, applications received before this date will still be processed and approved.