Umweltbonus genannt: All you need to know about German tax incentives for electric vehicles | Kaufprämie für Elektrofahrzeuge


Top summary:

➤The existing tax incentive scheme – often referred as environmental bonus (Umweltbonus genannt) is supposed to end by 31-12-2020. However, the German federal government has proposed to extend the benefit program up to end of year 2025.

➤The new proposal also embraces to increase the Umweltbonus genannt by up to 50%.

Full electric cars (BEV, as well fuel celled vehicles), and plug-in hybrid vehicles (PHEV) that emits less than 50 grams of CO2 /kilometer qualify for the new environmental benefit / tax incentive scheme of Germany.

This post may explain all the further information in detail.

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The plan is to increase the environmental bonus (Umweltbonus ) by 50% for electric vehicles with a net list price of up to € 40,000. For more expensive vehicles of net list price up to € 65,000 would be eligible for an increase of 25%.

So far, the incentive for pure electric vehicles is about € 4,000. This would get increased to about € 6,000 for full electric vehicles. Plug-in hybrids that are currently subsidized at € 3,000 , would get an increase up to € 4,500.

The German federal government believes that this new tax incentive scheme would boost the EV market to another 700,000 vehicles before 2025. In addition, the Federal Government wants to examine how under certain circumstances relatively new, but used electric cars can also be promoted.

What are the eligibility requirements for Umweltbonus genannt?

The main goal of the environmental bonus or Kaufprämie is to reduce CO2 emissions through more low-emission electric vehicles. So, in order to receive the incentive, below three conditions must be satisfied:

➤ The purchased vehicle must be from the list of eligible vehicles of the Federal Office of Economics and Export Control (BAFA).

➤ The purchased electric car must be registered and stay in Germany for at least six months and should be on the name of the beneficiary (Umweltbonus applicant).

➤ The purchase must be have been done between 18 May 2016 to 31 December 2020. (* new dates for 2025 are not published yet). Also, the new EV must be registered no later than 9 months after receipt of the Umweltbonus genannt decision.

Are there any other incentives in addition to the Umweltbonus?

Electric vehicles are still at an infancy state in Germany, the normal driver still hesitate to buy an electric vehicle over an internal combustion engine (ICE).

Thus the federal government also recommends individual municipalities to offer several promotion programs, such as free /priority parking, toll-free, exemption from purchase tax, subsidy for charge station installation…etc.

Incentives in Charging stations:

While promoting more electric vehicles, the expansion of the charging infrastructure is also urgently needed. Therefore, the federal government wants to initiate a nationwide, needs-based and user-friendly charging infrastructure network.

In the next two years, around 50,000 publicly accessible charging stations are expected to be installed and the automotive industry (Car OEMs) are expected to contribute about 15,000 public chargers by 2022. 

Benefits for charging station installation is also proposed, but may be offered at the municipal level. 

For example,
➤ The city of Munich pays 20% on net price for building AC charging infrastructure and a maximum of € 4,000 per DC fast charging station.

North Rhine-Westphalia also opens the bag and sponsors Subsidies for the own charging station for electric vehicles with up to 50 percent of the expenses, maximum €1,000. (Prerequisite: The electricity comes from renewable energies or locally produced regenerative electricity).

Which plug-In electric vehicles qualify for the Umweltbonus federal tax credit ?

Germany’s Federal Office of Economics and Export Control (BAFA) maintains the list of full-electric (BEV) and plug-in hybrids (PHEV with <50 grams of CO2 /kilometre) that are approved for the Umweltbonus. The latest list can be downloaded from the official BAFA website – link here.

Which plug-In electric vehicles do NOT qualify for the Umweltbonus ?

Looks like the German federal government has heard the people and complaints from all over world – buyers of rich vehicles such as Tesla, Porsche…etc are exempted from the Umweltbonus federal tax credit!.

The Federal government has clearly set a limit that the net list price of the basic model may not exceed € 60,000 (planned: € 65,000). Buyers of luxury vehicles are therefore not able to enjoy the purchase premium.

References & useful links for claiming the Umweltbonus tax credit:

➤ Info from BAFA : Elektromobilität
➤ On-line application form for Umweltbonus
➤ Electromobility promotion program in Munich
➤ Incentive program of North Rhine-Westphalia 

Hope we’ve answered all the frequently asked questions over the federal tax credit schemes and state incentives for full electric and plug-in Hybrid vehicles. Are there any more details that you want to know? Please email or comment.

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