Enhancements have been implemented across various aspects of the transportation industry by the Commission.
In the first seven months of 2025, the German automotive industry witnessed a significant surge in the adoption of electric vehicles (EVs), with the overall market for passenger cars across all drive types decreasing by just 2.5%. This positive development, according to Thomas Peckruhn, President of the Central Association of the German Automotive Industry (ZDK), is due in part to a broader range in the volume segments.
The growth is particularly evident in the registration of purely battery-electric passenger cars (BEV). In July 2025 alone, 48,614 BEVs were registered, marking a 58% increase from the same month the previous year. From January to July 2025, this figure stood at 297,340 BEVs, a 38.4% increase from the previous year.
The ZDK is pleased with this performance and calls for further political support measures to further strengthen the trend of electric vehicle sales. Peckruhn emphasized that the potential for EV growth is there, but reliable signals from politics are needed to tap into it.
One of the key measures Germany employs to support the adoption of EVs is through tax incentives and legislative programs. For instance, reduced Benefit-in-Kind (BIK) tax rates for BEV company cars see only 0.25% of the gross list price of BEVs up to €100,000 taxed. BEVs above this threshold face a 0.5% tax rate, with these regulations valid until the end of 2030. Plug-in hybrids (PHEV) have a 0.5% BIK tax if they meet specific emissions and range criteria. Employers also benefit from accelerated depreciation, allowing 75% of BEV costs to be written off in the acquisition year.
Although direct government purchase subsidies ended abruptly in 2023, causing an initial sales drop, the government currently promotes indirect incentives like tax benefits for corporate EV purchases. This pivot has stabilized EV market growth post-subsidy, as evidenced by increased EV registrations in 2025. The government has also promised new purchase incentives going forward, with a tax-based incentive scheme running from July 2025 to December 2027 aimed at new BEV purchases.
German manufacturers have also stepped up production, with German manufacturers producing 635,000 BEVs in the first half of 2025, representing about 25% of all cars produced in the country during that period. BEVs accounted for 18.4% of all new car registrations as of July 2025, showing steady upward momentum.
However, the growth of the EV market is not without challenges. The German and European automotive sectors face supply chain vulnerabilities linked to dependence on Chinese rare earth elements essential for EV batteries. Proposed strategic improvements include expanding battery recycling, developing alternative supply sources, securing strategic contracts, and researching substitutes for critical materials to support sustainable e-mobility growth.
Peckruhn also proposed a demand-oriented expansion of charging infrastructure, particularly in residential areas, to support the growth of electric vehicles. The number of PHEV registrations also increased significantly, with 166,102 PHEVs registered from January to July 2025, a 59.2% increase from the previous year.
In conclusion, Germany’s current political support for EVs focuses on tax incentives for companies and individuals, legislative thresholds favouring BEVs, and the promise of new subsidies, combined with strategic efforts to stabilize supply chains and sustain long-term EV market expansion. These initiatives, coupled with the increasing production and adoption of EVs, indicate a promising future for the German EV market.
[1] German government website - EV incentives
[2] ZDK press release - EV market growth
[3] Reuters article - Post-subsidy EV market growth
[4] ZDK report - Challenges in the EV market
[5] German government press release - New purchase incentives
- The growth in electric vehicle (EV) adoption within the German automotive industry, particularly in the registration of battery-electric passenger cars (BEV), has been marked by a significant surge, with a 38.4% increase from January to July 2025 compared to the previous year.
- The Central Association of the German Automotive Industry (ZDK) has expressed its satisfaction with the current performance of the EV market, but emphasizes the need for further political support measures, such as tax benefits and legislative programs, to reinforce the trend of EV sales.
- German manufacturers have increased their production of electric vehicles, with 635,000 BEVs produced in the first half of 2025, accounting for about 25% of all cars produced in the country during that period.
- The growth of the EV market in Germany faces challenges, including supply chain vulnerabilities linked to dependence on Chinese rare earth elements and the need for strategic improvements, such as expanding battery recycling, developing alternative supply sources, and researching substitutes for critical materials.
