The subsidy will not impose origin-based restrictions, meaning Chinese EV brands will be eligible alongside local automakers. Germany has formally confirmed that it will restart its electric vehicle purchase subsidy program, committing about €3 billion ($3.5 billion) over three years and targeting roughly 800,000 EVs. The new incentives follow Germany’s decision to scrap EV subsidies at the end of 2023, which led to a 27% year-on-year drop in electric vehicle sales in 2024. Growth of EV markets in the UK, Germany, and France from 2012 to 2024 The renewed program aims to revive EV adoption while supporting an automotive industry under mounting pressure. Notably, despite the policy’s stated goal of backing domestic automakers, the government will not impose origin-based restrictions. Foreign automakers, including Chinese brands, will be eligible to participate. German Environment Minister Carsten Schneider said at a press briefing on Monday that imported vehicles—including those from China, Germany’s main automotive competitor—will not be excluded from the subsidy scheme. BYD Sealion 7 He added that there is currently no evidence of “dumping” by Chinese electric vehicles and said German automakers remain sufficiently competitive. The subsidies will apply to private consumers and cover newly registered battery-electric vehicles, selected plug-in hybrids, and extended-range electric vehicles from January 1, 2026. Depending on vehicle type, household size and income level, incentives will range from €1,500 to €6,000 ($1,700 to $7,000), with a focus on low- and middle-income buyers. Additional measures include extending EV tax exemptions through 2035. Leapmotor C10 EREV For Chinese brands, the policy represents a tangible boost. Despite EU-level tariffs on Chinese-made EVs, companies such as BYD and Leapmotor are still seen as retaining room for profitability thanks to their cost structures and pricing strategies. Germany’s approach contrasts with that of other European markets. The UK’s subsidy framework introduced last year effectively excludes Chinese-built EVs through low-carbon requirements tied to battery and vehicle production. France’s “social leasing” program has adopted similar thresholds. By comparison, Germany has opted for a more open path. The subsidy program will run through 2029, with eligibility retroactive to January 1, 2026. Detailed implementation rules are expected to be released later this year.
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