The administrative authority plans to advocate for electric cars being utilized as service vehicles.
The federal government is planning to rejuvenate the sales of electric vehicles by offering business-specific incentives due to a decrease in demand following the withdrawal of government subsidies. This initiative, titled "Growth Initiative," includes the introduction of enhanced tax deductions for electric cars used as company vehicles. According to the draft bill, the primary aim of the federal government is to significantly advance electromobility in Germany. They believe that substantial tax measures are necessary to achieve this goal.
The market for electric vehicles experienced a significant slump after the discontinuation of government subsidies. The environmental bonus, a popular incentive, was abruptly terminated in December due to financial constraints. The budget talks in July resulted in the agreement on the "Growth Initiative," which includes the tax incentives for electric cars used by companies.
To be more precise, the plan involves introducing a special tax depreciation for newly registered fully electric and comparable zero-emission vehicles, effective from July 1, 2024. Furthermore, the limit for the gross list price of electric vehicles in company tax, currently set at 70,000 euros, will be increased to 95,000 euros.
Economy Minister Robert Habeck expects electric vehicle demand to increase due to this initiative. He refered to it as a "demand push." Company cars, in particular, are crucial for the used car market, as they are kept for relatively short periods.
The draft bill also suggests that the new measures will provide "clear tax incentives" that specifically help in the market expansion of electromobility in the business sector. This regulation will only apply to newly acquired fully electric vehicles. The introduction is intended to be temporary, lasting from July 2024 to December 2028, with the intention of promoting prompt investment decisions.
Based on the draft bill, the tax losses expected for 2024 are minimal. In 2025, the estimated tax losses are 480 million euros, and by 2028, it is expected to reach 540 million euros.
The withdrawal of government subsidies led to a decline in electric vehicle sales, affecting the economy. The federal government's "Growth Initiative" aims to revive the market by offering enhanced tax deductions for company electric vehicles, which could stimulate demand and boost the economy.
