EVwire brief: Demand for Germany's electric car subsidy is running well ahead of plan, with the governing coalition now expecting to pay out €1.72 billion ($1.93 billion) in 2027 alone, more than double the €803 million ($900 million) originally set aside for that year.
The revised figure appears in the draft for the final committee session on Germany's 2027 federal budget, a copy of which was obtained by Welt. The draft adjusts the program's yearly budget allocation to match the higher demand, though its total volume stays unchanged at €2.7 billion ($3.0 billion), as per the document. The government has previously described the program as a €3 billion ($3.4 billion) pot drawn from its Climate and Transformation Fund.
The draft gave this reasoning for the change:
"The electric vehicle subsidy program is developing much more dynamically than anticipated in its conception and the original demand planning."
The Volkswagen ID.7 Tourer and ID.7 sedan. Volkswagen remained Germany's top EV brand in Q3 (Image: Volkswagen)
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The socially tiered subsidy was designed to run from 2026 through 2029 and fund an estimated 800,000 vehicles. Private buyers and lessees can receive €3,000 to €6,000 ($3,400 to $6,700) for a battery-electric car and €1,500 to €4,500 ($1,700 to $5,000) for an eligible plug-in hybrid or range-extender model, depending on household income and number of children. Applications opened on May 19 and cover cars first registered since January 1, 2026.
Uptake has been quick. Germany's Federal Office for Economic Affairs and Export Control (BAFA) had approved 100,000 applications and paid out more than €430 million ($480 million) by early October, against the €550 million ($615 million) budgeted for 2026. At that pace, payouts could reach €1 billion ($1.12 billion) this year, and at roughly €200 million ($225 million) a month, the fund would run dry by autumn 2027. The government has not said whether it will add money to the program.
Federal Environment Minister Carsten Schneider said in October that demand had exceeded all expectations, while assuring buyers that funding would still be available next year:
"Anyone who decides to purchase a battery-electric vehicle now and meets the eligibility requirements for funding doesn't need to worry about next year either that the funding will run out."
The Skoda Elroq is one of Germany's most-registered EVs this year (Image: Skoda)
There is still a catch for buyers facing long delivery times. The subsidy isn't reserved when a car is ordered from a dealer, and it is only granted after the vehicle's first registration.
The subsidy, along with high fuel prices, has lifted Germany's EV market to new highs. Battery-electric cars took a record 37% of new car registrations in October, as 94,086 were registered, up 79.5% year over year, according to the Federal Motor Transport Authority (KBA). From January to October, 698,230 new EVs hit German roads, or 28.2% of the market.
EY automotive expert Constantin Gall told AFP that the subsidy is doing most of the work, and that he expects EV registrations to drop sharply once the money runs out, as they did in 2024 after Germany ended its previous subsidy in December 2023. “The market is running – but it's mainly because of the subsidy,” Gall said.
Here's how Germany's top EV brands performed in the third quarter, as per EY and KBA data published by Welt:
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Context:
Foreign brands have captured much of that growth. EY's third-quarter analysis found that German automakers' share of the country's EV registrations fell by about 10 percentage points year over year to 50.2%, even as the overall EV market grew 77% to a quarterly record of about 236,000 units. Volkswagen remained the top brand with roughly 26,500 EVs, but grew just 13%.
Chinese manufacturers expanded their registrations by 168%, and EY's release puts their share at 13.5%, up from 8.0% a year earlier, with Leapmotor, BYD and MG Roewe the highest-ranked Chinese brands at 12th, 14th and 16th. Gall attributed the shift largely to price, noting that German automakers have almost no EVs below €25,000 ($28,000).
Tesla was among the biggest gainers. Its 15,953 German registrations in the third quarter were up 168% year over year, driven by a September in which the Model Y became Germany's best-selling car, outselling the Volkswagen Golf. The Model Y finished the quarter as Germany's second most-registered EV with 9,763 units, behind the Skoda Elroq's 10,761. Germany's surge also fits a wider trend, as battery-electric cars took 24.2% of new car registrations across the EU, EFTA and UK through September.
Source: Welt, EY, Federal Environment Ministry, electrive
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