Germany’s next EV subsidy program is officially taking shape.

After the sudden termination of the Umweltbonus in December 2023, which caused a -27% collapse in EV demand and sent multiple companies into job cuts or bankruptcy, the government now wants to reactivate private EV demand.

This new program is narrower, more targeted, and designed to support middle- and lower-income private households rather than corporate fleets.

The income limit is based on taxable income (zu versteuerndes Einkommen), not gross salary.

Because taxable income excludes social contributions, insurances, and allowances, the thresholds correspond approximately to:

If we look at the professions and their median salaries.

Bottom Line:

The program successfully targets the middle and low income class, not the wealthy.

Market Response to Subsidy Removal

*till October 2025
_{(Source: KBA)}

Three patterns:

The Lesson:

Subsidy certainty matters more than subsidy amount. The market can adapt to lower subsidies, but cannot adapt to sudden elimination.

Officially, the subsidy runs until 2029. Realistically, it won’t. This is actually a good sign, it means the budget is based on realistic market volumes. However, the inclusion of PHEVs and used cars will drain this pot quickly.

The only way this runs to 2029 is if demand stays unexpectedly low, which goes against all historical patterns.

Equal subsidies for BEVs and PHEVs create a unique moment: the technology winner won't be decided by government policy. It will be decided by three groups who control the customer experience.

The Demographics:

Germany is a conservative market. Cash is king. Trust is built face-to-face.

Familiarity with Technology:

Many salespeople have spent decades selling combustion engines. They know the tech. BEVs require learning a new ecosystem (charging curves, apps, range).

The "Commission" Trap:

Sales jobs usually are structured around fixed income + performance commission.

I’ve spent 9 years as a sales manager in Germany’s automotive sector. Before that, as a student, I sold city tour tickets to tourists on the streets of Berlin for 2 years, competing with 3-5 other sellers in real-time. I know what desperation sales looks like. I know the temptation to take the easy route to hit a target.

If a dealership salesperson fails to sell a BEV multiple times because they lack the training or confidence, they will naturally shift to selling PHEVs. Not because they hate BEVs, but because their income depends on closing deals.

The Test:

Walk into a dealership in Q1 2026. The confidence with which a dealer answers "ID.4 or Tiguan eHybrid?" will determine the success of this subsidy.

What OEMs Must Do:

If manufacturers want BEV volume, they need to invest in dealer training. Most importantly, bring the CPOs in this training session with dealers as well, so that everyone understands how the ecosystem works and how to convince the potential customers.

The subsidy targets people who likely do not have a garage or wallbox. They will depend heavily on public charging. Here is where the industry is currently failing them.

New adopters don’t want 10 different apps. They want to tap a card or enter a pin using their credit card / EC Card, just like buying groceries in a supermarket or fueling their car at a gas station. The prices with card or cash are exactly the same. It is frictionless and understood by everyone.

No one spends time in front of oranges or fuel station, swapping apps to find the best deal and we need the same mindset in E-mobility as well.

But sadly, the CPOs in Germany currently punish anyone using the most widely used payment method. I analyzed pricing across 5 major non-Tesla CPOs covering ~33% of Germany’s public DC chargers.

I drove a VW ID.5 for 38,000 km over a period of 2 years. I used to frequently log my driving and charging sessions and payment methods to understand the technology better. This helped me in selling the EV chargers, as I understood the driving profiles and business case of my potential customers.

I have tracked my energy consumption across city and highway driving, but also in various terrains and conditions, e.g., perfect summer in Germany, Netherlands, Austria (Mountains), and winter in Germany and Switzerland (Mountains).

Now let me paint a very clear picture, where we stand today, while comparing public EV charging and fueling prices per 100 km in Germany.

Above €0.60/kWh, BEVs lose cost advantage over petrol hybrids.

The Psychology of Cost: 

EVs win on maintenance, but psychology is irrational. Maintenance is an annual cost; charging is a "visible" weekly pain on the wallet. We notice the €40 charging session much more than the once-a-year maintenance. To win the mass market, EVs must win at the “pump” (the charger), not just in the workshop.

Another Example: Think of your least favorite relative visiting: would you prefer they visit for 12 days once a year, or one day every single month? You notice the frequency. 😅

Warning for CPOs: If you keep ad-hoc pricing above €0.59/kWh, you break the business case for private buyers. They will buy PHEVs and drive on petrol instead.

Worse: If PHEVs dominate, they will clog DC fast chargers (charging at only 40kW) while blocking BEVs that could charge at 150kW+. This kills your revenue per minute.

The Solution: Drop ad-hoc pricing to €0.49/kWh. Stop punishing credit card users. Fix and improve the roaming prices, or else no one really wins.

EVs are objectively better, more efficient, fewer parts, lower maintenance. But physics doesn't sell. Experience sells.

The History Lesson In 1903, the President of the Michigan Savings Bank famously advised Henry Ford’s lawyer not to invest in the Ford Motor Co., saying:

Why? Because the horse was frictionless. The car only won when it became easier and provided much more value than the horse. EVs are currently an alternative to an existing technology and alternatives must be obviously better to win. To win, the friction must disappear.

Now looking specifically at E-mobility, the problem is that many people working are disconnected with the ground realities.

Also, if they own a private Tesla, they will also not feel the pain, as they are accustomed to best in class navigation, charging at superchargers with the best prices.

To fix EV adoption and increase utilization, companies must force their teams, from CEOs to service engineers, to experience what customers experience. Here is my suggestion.

The 4-Week Test:

Only then will you understand why a "satisfied" customer on a PowerPoint slide might actually be a frustrated driver ready to switch back to diesel.

If you follow me, you know I love charts. But stats can be skewed and therefore needs to be looked at very carefully.

90% passing accuracy for a midfielder in football could mean an elite level player or incredibly limited and passive player, who instead of bringing the ball forward and create goal scoring chances, plays the safe pass to sides or back to defenders under pressure.

Currently 65% of BEVs in Germany are registered as company cars. Also there are studies showing that once people get EVs, they rarely switch back.

But here is the fine line we need to understand. I have talked to many people driving company cars. Company car holders having a wallbox at home, love EVs and will never switch. But I've met drivers with company EVs who'd never buy one privately.

Why?

"I don't have time for apps.

Pricing is insane without a fleet card."

These people will be in the subsidy targets. If the experience doesn’t improve, they’ll take €3,000 and buy a PHEV.

Germany’s new subsidy is well targeted:

It supports the middle class, avoids subsidising fleets, and gives families meaningful support.

But whether BEVs or PHEVs win depends on:

Out of the ~800,000 vehicles this program will fund, what is your prediction for the split?

BEVs: ___ % 
PHEVs: ___ %

Reply with your estimates. I’m curious to see your take.

Also do you think, there dealerships might be asked about depreciation values of EV? If yes, what is the best take on it to alleviate concerns?

That is it for today.

Let me know your thoughts? Did you like it and found it insightful? I really appreciate your feedback

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Haseeb - till next time!

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