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The energy industry has welcomed the new German government’s “investment booster” to stimulate growth in Europe’s biggest economy, which includes tax incentives for buyers of electric vehicles. “Tax incentives have already led to great success for our European neighbours and boosted the uptake of electric mobility,” Kerstin Andreae, head of the German Federation of Water and Energy Industries (BDEW).

Over the weekend, Germany’s finance minister, Lars Klingbeil from the Social Democratic Party (SPD), released a first draft of the government’s new economic policy concept, which is intended to stimulate investment. According to a draft public broadcaster ARD, tax write-offs will be made available for EVs and machinery. Starting on 30 June, the write-offs are planned to amount to 30 per cent for machinery in the years 2025, 2026 and 2027, according to ARD. For EVs registered as company cars, the write-off in the year of purchase could amount to 75 percent of the purchase price. In a second step, the corporate tax is planned to drop from 15 to 10 percent.

"This comes at the right time," said Andreae, adding that the country's transport sector urgently needs 'effective incentives' to reduce CO₂ emissions. The leader of the energy industry lobby group said that Germany's EV charging infrastructure is already “very well developed” and currently lacks the vehicles to make use of it. She added that the energy industry hoped to soon gain greater clarity on the government's plans to reduce electricity prices, ensuring they can take effect by the beginning of next year.

The measures are intended to stimulate growth and investment in the short term, and in the long-term provide companies with greater planning security. The law was agreed upon by the SPD and its coalition partner, the conservative CDU/CSU alliance led by chancellor Friedrich Merz, who campaigned on a pro-industry platform in Feburary's election.