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24 Jun 2025, 13:20
Carolina Kyllmann
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Germany

Germany's EV social leasing programme to focus on small, EU-made models – SPD

WirtschaftsWoche

A new social leasing programme should enable those in lower income brackets in Germany to participate in the transition to climate-friendly mobility, Isabel Cademartori, transport policy spokesperson for the Social Democrats’ (SPD) parliamentary group, . Under such a scheme, similar to , a middle to low-income household could, for example, drive a small electric vehicle (EV) for 99 euros per month for three years, Cademartori said.

Germany's new coalition government, formed by the conservative CDU/CSU alliance and the SPD,  said it would introduce a support programme for low-income households to switch to e-mobility, financed through the EU Social Climate Fund. EVs tend to be more expensive than combustion engine cars, meaning that for now they are mostly owned and driven by high-income groups.

Larger models and electric SUVs would be excluded from the social leasing programme, signalling to the market that there is demand for smaller models, Cademartori said. Moreover, "de facto, only cars produced in the EU would be eligible," she added. "We don't want to give support to Chinese-made vehicles at great expense. It's not about the brand, but about where the vehicles are produced."

The price for carbon emissions in the transport sector is set to rise from 2027 onwards with the reform of the EU Emissions Trading Scheme (ETS). Some of the money from the scheme should flow back into a social fund to support the people most affected by this rising levy. "Social leasing is very well suited here because it enables people to switch from combustion engines," Cademartori said.

The ramp-up of electromobility is key for finally reducing emissions in the transport sector, which have been flatlining for decades in Germany. A successful shift to electric mobility will also be crucial to secure the long-term survival of the country’s large automotive industry.

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