Germany extends tax exemptions for electric vehicles until 2035

The German lower house of parliament on Thursday decided to extend tax exemptions for electric vehicles by five years, aiming to make the purchase of electric cars more attractive.

Under the law, electric cars first registered by the end of 2030 will remain exempt from motor vehicle tax for up to 10 years, but no later than December 31, 2035. Buyers who switch to electric vehicles close to the deadline would enjoy only a five-year exemption.

Without the parliamentary decision, the exemption would have expired at the end of the year. The government estimates that the extension will reduce tax revenues by around €1 billion ($1.2 billion).

Hauke Finger of the far-right Alternative for Germany (AfD), the only party to vote against the measure, accused the government of “throwing money out the window on a whim.”

Stefan Korbach, a member of Chancellor Friedrich Merz’s conservative Christian Democratic Union (CDU), said the cost was manageable, arguing the move would ease the transition to electric mobility while supporting the car industry and its suppliers.