Germany makes EVs tax-free for 10 years

December 01, 2016

Germany has increased incentives for electric vehicles (EVs) in a bid to encourage demand. Zero-emission vehicles are now exempt from annual car tax for 10 years.

The change was introduced in November instead of in 2020 as originally planned, Automobilwoche reports.

The move doubles the length of time an EV can be driven without incurring annual road taxes. This will help stimulate demand in both the new and used car markets.

By doubling the period of the tax exemption, the savings will extend to second and third owners of EVs, where tax makes up a larger proportion of the value of a car.

In addition, owners of EVs can charge their electric car at work and have the cost paid for by the company without incurring benefit-in-kind tax.

The initiatives are part of a wide-ranging programme by the German government to increase demand for EVs.

The introduction of a €4,000 incentive for electric vehicles at the start of July has been less successful than the government hoped.

Demand declined from 2,000 applications after launch to 1,000 in August and 1,400 in September.

EVs have a higher purchase price than their petrol or diesel counterparts but the €4,000 incentive offered by the German government has significantly reduced the price differences.

For example, the BMW i3 and Renault Zoe are cheaper to buy new in Germany when the incentive is included than the BMW 120d (Advantage) or Renault Clio dci90 (Experience) respectively, although this doesn’t include battery lease costs.

Resistance to EVs is caused by a number of factors, including range anxiety concerns, a lack of charging infrastructure, a limited choice of cars and uncertain residual values.

Also in News & Insights

UPDATE: News & Insights have moved to the Autovista Group website

March 31, 2017

Our regular automotive industry News & Insights are no longer being published on the Autovista Group Market Reports website.

Instead, you can now find the latest updates at our central Autovista Group website, home to our pan-European brands including Autovista, Eurotax, Glass's and Schwacke.

To stay up to date with rapidly changing market trends, we recommend signing up to our free Autovista Group Daily Brief which delivers our daily news stories directly to your inbox.

You can still find our in depth market reports here on the Autovista Group Market Reports site. Keep checking back as we have an exciting new report due to be launched shortly!

PSA to boost UK presence in the event of a ‘hard Brexit'

March 08, 2017

UK sales flat despite upcoming road tax hike, diesel demand plummets

March 08, 2017

UK new car registrations fell annually by 0.3% in February to 83,115 units according to the SMMT, driven down by weaker demand from individuals and companies. More noticeable, however, was the 9.2% drop in demand for diesels compared to February 2016, a steeper drop than the decline in Germany...