Germany has reintroduced a major electric vehicle (EV) subsidy program with a €3.5 billion budget until 2029 to support up to 800,000 EV purchases. The program includes plug-in hybrids (PHEVs) and extended-range electric vehicles (EREVs), making it more flexible and realistic for consumers concerned about charging access.
BEVs qualify for a base subsidy of around €3,000, while PHEVs and EREVs are eligible for a base incentive of approximately €1,500. The subsidy applies to both purchases and leases, with imported vehicles, including those from Chinese brands, receiving the same subsidies as German and European cars.
Germany’s 2026 EV subsidy program includes a social tier system capped at €80,000 in taxable household income, rising €5,000 per child, potentially reaching €90,000. This targeted approach reflects lessons learned from past subsidy withdrawals and accommodates gradual consumer transition to electric vehicles.
China’s BYD Co. plans to double its sales network in Europe by the end of 2026, benefiting from Germany’s inclusion of Chinese brands in the subsidy scheme. Volkswagen AG and BMW AG are positioned to benefit from Germany’s renewed incentives, boosting sales of electric models and making them more affordable for consumers.
Tesla, Inc. is investing in its Gigafactory Berlin-Brandenburg to increase battery production by 2027, with hopes that the new German subsidy program will offset price sensitivity among consumers and support delivery volumes. Infineon Technologies AG, a leading German semiconductor company, is set to benefit from rising EV demand and higher semiconductor orders from automakers.
Germany’s 2026 EV subsidy restart aims to boost demand without blocking foreign companies, reshaping electric car buying behavior. Car makers and suppliers with electric models, flexible production, and a strong presence in Europe are likely to benefit the most, leading to industry growth and increased investor attention.
Read more at Nasdaq: Germany Revives EV Subsidies: Industry Impact & Key Beneficiaries