Germany's New $7,000 Electric Vehicle Subsidy Explained

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Home > Finance > Germany to offer up to $7,000 electric vehicle subsidy, Bild reports

Finance

Germany to offer up to $7,000 electric vehicle subsidy, Bild reports

Published by Global Banking and Finance Review

Posted on January 16, 2026

Last updated: January 16, 2026

Germany to offer up to $7,000 electric vehicle subsidy, Bild reports - Finance news and analysis from Global Banking & Finance Review

Germany's Electric Vehicle Subsidy Initiative

BERLIN, Jan 16 (Reuters) - Germany will offer families with small and medium incomes subsidies of up to $7,000 to buy new electric cars, newspaper Bild reported on Friday, in a bid by Berlin to revive sluggish sales of one of the country's key industries.

German carmakers are struggling with the transition to electric vehicles, experiencing significantly lower demand than initially expected.

The government is planning new subsidies of between 1,500 and 6,000 euros ($1,700-$7,000), Bild reported, citing the Environment Ministry. There was no mention in the Bild report of any local production requirements for the subsidy.

Details of the Subsidy Program

Applications can be submitted retroactively for new registrations from January 1, the report said, adding that a website for applications is expected to go live in May.

Expected Impact on EV Market

"The funds are sufficient for an estimated 800,000 vehicles over the next three to four years," Environment Minister Carsten Schneider was quoted as saying by Bild.

Criticism of the Subsidy Scheme

The Environment Ministry declined to comment on the Bild report.

Schneider was set to hold a press conference on Friday morning to lay out the details of the plans.

His ministry postponed the announcement until Monday, without giving a reason.

Last year, Volkswagen, with its namesake brand, Czech brand Skoda and Spain's Seat, accounted for most of Germany's battery-electric passenger car sales, according to official data.

Germany's coalition government under Chancellor Friedrich Merz in principle agreed on the new subsidies late last year and has set aside 3 billion euros for EV subsidies from 2026 to 2029.

These measures are expected to boost EV registrations this year by 17% year-over-year to nearly one million, according to the VDA auto industry association, which has called for a timely roll-out of the subsidies.

Ferdinand Dudenhoeffer, head of the CAR research institute, when asked about the subsidy scheme, pointed to data showing that the market share of electric cars is already steadily increasing, mainly due to more attractive prices.

"Subsidies make no economic sense and only place an unnecessary strain on the national budget," Dudenhoeffer said.

(Reporting by Holger Hansen, additional reporting by Rachel More, writing by Thomas Seythal, editing by Jane Merriman)