Klingbeil: Motor vehicle tax exemption for electric cars will be extended.

 The German federal government intends to extend the motor vehicle tax exemption for electric cars until 2035. Federal Finance Minister Lars Klingbeil (SPD) told the German Press Agency:

"So that we can put many more electric cars on the road in the coming years, we must now set the right incentives. Therefore we will continue to exempt electric cars from the motor vehicle tax."

Klingbeil announced that he would submit a draft bill on this. 

Under the current framework, the tax exemption for newly registered pure electric cars would no longer apply as of January 1, 2026. The regulation is now to be extended by five years. The amendment to the law is intended to encourage the ownership of pure electric vehicles that are first registered by December 31, 2030. The maximum ten-year tax exemption should be limited until December 31, 2035, in order to provide an incentive for the early purchase of a pure electric vehicle, as the Finance Ministry said. 

Specifically, this concerns an amendment to the Kraftfahrzeugsteuergesetz. This will result in tax revenue losses for the federal government of up to several hundred million euros in the coming years. 

On Thursday "Auto Summit"

Klingbeil named the car tax exemption a building block for the measures to be discussed on Thursday at the "Automobile Dialogue," to which Chancellor Friedrich Merz (CDU) has invited.

"We must now forge a strong package to lead the German automotive industry into the future and secure jobs. We want the best cars to continue to be built in Germany." The automotive industry is in the middle of a transformation. "Everyone knows that the future is electric."

At the meeting in the Chancellery, alongside several federal ministers, representatives from the states, the automotive industry, and trade unions are taking part. The auto industry is grappling with a sales slump, competition from China, and the shift to electric mobility. On top of that comes the tariff dispute with the United States. Many companies are pursuing cost-cutting measures and are cutting jobs. 

Automotive association warned of setback for e-mobility 

The president of the Association of the Automotive Industry, Hildegard Müller, had demanded that the coalition must quickly ensure an extension of the car tax exemption for pure electric vehicles until 2035 — as promised in the coalition agreement.

"The tax exemption has proven to be an effective purchase incentive for electric vehicles, but would no longer apply for new registrations starting 1 January 2026 — with considerable consequences for the further ramp-up of e-mobility for passenger cars and commercial vehicles."

A spokesperson for Klingbeil had said just over a week ago that the implementation of the extension of the car tax exemption announced in the coalition agreement is currently being reviewed.