By 2035 at the latest, internal combustion engines will be phased out in the EU. New cars will then only be allowed on the road if they emit no greenhouse gases. However, many member states and car manufacturers want this to happen much sooner.
And it is not only when it comes to new registrations that the air is getting thinner for diesel and petrol engines. As part of their efforts to combat air pollution, more and more European cities and towns are banning older vehicles from their roads.
For those who still want to drive, the question is not if, but when they will switch to electric power.
Financially, the electric car is now ahead of the combustion engine, at least when buying a new car. In Germany, this is due in no small part to government subsidies.
And thanks to the exemption from road tax and the high cost of petrol, the electric car is also cheaper to run. Find out more at ADAC
However, whether or not the switch is worthwhile is ultimately a question of personal circumstances, especially with regard to individual mobility behaviour, charging facilities and the associated electricity costs.
Electromobility is subsidised by the government in many European countries. This may be in the form of a grant, as in France, Austria or Ireland, or through tax incentives, as in Bulgaria, Finland or Denmark.
In some countries, there is both a purchase premium and other tax benefits, such as in Italy, the Netherlands or Spain.
The purchase premium is conditional on the vehicle being registered for road use in the country where the subsidy is paid.
The foreign subsidy programmes are therefore likely to be of particular interest to those who live or reside in another EU country for an extended period of time.
Click here for more information on e-mobility support in individual European countries.
If you buy your car in another EU country, you are theoretically entitled to the German subsidy.
From 1 January 2023, only the purchase of a pure electric vehicle will be subsidised in Germany. There will no longer be a purchase bonus for plug-in hybrids.
And from 1 September 2023, only vehicles used for private purposes will be eligible. Commercial leases or vehicles used for self-employed work will no longer be eligible.
New vehicles with a net list price of up to €40,000 will be subsidised with €4,500. If the net list price of the e-car is between 40,000 and 65,000 euros, the government will provide a subsidy of 3,000 euros. From 2024, only e-cars costing up to €45,000 will be eligible.
In order for a vehicle bought abroad to be subsidised in Germany, the same requirements have to be met as for a domestic purchase.
This is particularly problematic in the case of the dealer discount. As a rule, a dealer in another EU country will not grant a discount on the German premium.
Without a dealer discount, there is no government subsidy – so you end up with nothing.
Currently, the required dealer discount for buying an electric car in Germany is €2,250 for vehicles up to €40,000 and €1,500 for vehicles up to €65,000.
- The seller must offer a discount of up to €2250 on the list price.
- The vehicle must be registered in Germany for at least 12 months. There were only 6 months until the end of 2022. The new regulation is intended to prevent electric vehicles subsidised in Germany from being exported to other EU countries at a profit after the holding period. This is because the young used cars are often sold there at much higher prices.
- Subsidies can be applied for at the earliest after registration and at the latest within one year.
- Used electric vehicles are subsidised if they were first registered less than one year ago and have travelled less than 15,000 kilometres. In addition, the vehicle must not have been claimed for an environmental bonus in Germany. However, you may have applied for a bonus abroad.
- Leased vehicles must meet the same requirements as new vehicles. To receive the full subsidy, the leasing contract must run for at least 24 months.
- From September 2023, only private individuals will be able to apply. In addition, the applicant must be both the buyer or lessee and the owner of the vehicle.
Before you decide to buy a car, you should carefully check whether you are eligible for a grant. Make sure you comply strictly with the terms and conditions of the grant.
Do not get involved in dubious arrangements with the seller in order to benefit from the subsidy, e.g. by reducing the purchase price on the invoice. Such transactions are illegal and, in addition to the loss of the subsidy, can have criminal consequences.
Detailed information on the environmental bonus and how to apply can be found on the website of the Federal Office of Economics and Export Control.
New electric vehicles registered between 18 May 2011 and 31 December 2025 are exempt from vehicle tax in Germany until the end of 2030.
Example: An electric vehicle registered for the first time on 1 January 2022 will be exempt until 31 December 2030.
For older vehicles, there is a maximum exemption period of 10 years from the date of first registration.
Even after the end of the tax exemption, the vehicle tax for pure electric vehicles will be lower than for combustion engine vehicles.
The tax does not depend on whether the electric vehicle was purchased domestically or abroad. The scheme applies to all vehicles registered in Germany.
Plug-in hybrids are not exempt. However, the tax rate is lower than for internal combustion engines.
If you own an electric car, you can sell your so-called greenhouse gas reduction quota. Depending on the car, you can earn several hundred euros a year.
The idea behind it: Oil companies that cause CO2 emissions through their fuels are required by law to gradually reduce these emissions over the coming years. If an oil company fails to meet its quota, it will have to pay a fine or buy pollution rights from electric car owners.
From the beginning of 2022, private individuals will be able to sell on the open market their greenhouse gas quota, which they automatically have as owners of electric vehicles. Plug-in hybrids are excluded.
Anyone wishing to participate in GHG quota trading must contact an intermediary. The intermediary collects the GHG quotas of many electric car owners and sells them as a package to companies that emit more CO2 than they are entitled to.
To get the money, you find an intermediary online, register your electric car there and send a copy of the registration document, e.g. as a scan or photo.
If you have received a government grant for your electric car, whether in Germany or another EU country, the vehicle must usually remain registered in your name and in the country where you received the grantfor a certain period of time.
If you move abroad with your car before the end of this period, this may affect your funding. In the worst case, you may have to pay back the bonus.
From a legal point of view, buying in other EU countries is no problem thanks to the European single market. Dealers from abroad are not allowed to simply refuse to sell to people from Germany. This would be an unacceptable form of discrimination or geo-blocking.
Whether the purchase is economically worthwhile depends on the individual case. At the moment, in most cases it does not seem worthwhile to buy an electric car in another EU country. But this can change quickly. For example, if the conditions for government support for electric vehicles change, or if a larger used car market develops.
At the moment, the net list prices for electric vehicles in Germany are usually lower than in other EU countries.
In addition, to receive the environmental bonus in Germany, proof of a dealer discount must be provided.
If the dealer does not give the discount required by the subsidy guidelines, there is no government bonus. This applies to both new and used cars.
But it may be worth looking across the border. Electric cars are currently in short supply and delivery times are long. Depending on the country, model and offer, you may be able to find something quicker abroad.
If you decide to buy abroad, you should consider the usual peculiarities of buying a car across borders, as well as the financing conditions for electric cars.
In the case of new cars, for example, VAT must be paid in the country of registration. There are also questions about transfer and registration.
If you buy an electric car in another EU country, you can claim your legal warranty rights. This is two years for new cars and at least one year for used cars.
In addition, most manufacturers offer a commercial guarantee for new cars.
For used cars, the seller will often offer a used car warranty for an additional charge.
Read more about the difference between warranty and guarantee.
The battery is one of the most expensive parts of an electric car. Replacing it often costs more than a quarter of the price of a new car. This makes it all the more important that consumers are well protected.
Even though sophisticated battery control systems in electric vehicles prevent the battery's performance from deteriorating too quickly, the battery can still fail.
For this reason, manufacturers often guarantee that their batteries will retain their charging capacity for a certain period of time (usually up to 8 years) and for a mileage of approximately 160,000 km. A remaining charge of 80% is defined as fault-free.
Incorrect charging may invalidate the warranty.
The same applies if the car is left standing for long periods. This can lead to deep discharge and irreparable damage to the battery.
- When buying a used electric vehicle, get written confirmation from the seller that the battery has been regularly charged.
- Familiarise yourself with the manufacturer's charging recommendations.
- If the battery is faulty, do not rely solely on the warranty, but also on the statutory warranty rights. Under these rights, the seller must be able to prove misuse within the first year. If they cannot, they must replace the battery free of charge.
Sellers often confuse the warranty and the warranty law. Don't let them confuse you.
With all its control systems, an electric car is like a computer on the move. This makes it all the more important that the software is always up to date and working properly.
As a buyer, you are obliged to always carry out the recommended updates, otherwise you may lose your warranty and guarantee claims.
Manufacturers, on the other hand, have an obligation to provide you with bug-free updates and ensure that you always have access to the software you need.
If the software is faulty, e.g. due to a programming error, you can also make a warranty claim.
Unlike material defects, the period is not limited to two years, but is initially unlimited or as long as updates are made available.
When you buy an electric car, the car dealer is obliged to inform you in detail about the update supply when you sign the contract.
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Innovation Council and Small and Medium-sized Enterprises Executive Agency (EISMEA). Neither the European Union nor the granting authority can be held responsible for them.