Hoping to boost the German automotive industry, Germany launches electric vehicle subsidies and opens up to Chinese enterprises
The German federal government announced on Monday that it will once again implement subsidy policies for electric vehicles to improve the climate environment and boost the struggling German automotive industry. Germany will open up 3 billion euros in electric vehicle subsidies to all manufacturers, including Chinese brands. German Environment Minister Schneider said, "We will face the challenges brought by competition and will not set limits in this regard
According to the German newspaper "Handelsblatt" on the 20th, according to the new regulations, anyone who purchases or leases an electric car in the future will receive a subsidy of 1500 euros to 6000 euros, depending on the type of vehicle, income level, and family size. Pure electric vehicles, electric vehicles with range extenders, or plug-in hybrid vehicles are all within the subsidy scope, and the subsidy is not related to the vehicle price.
The German Federal Ministry of Environment stated that the total funding of 3 billion euros comes from the German Federal Government's Climate and Transition Fund, which is expected to benefit approximately 800000 electric vehicles in the next 3 to 4 years. Schneider said at a press conference in Berlin, "This will enable us to break free from our dependence on gasoline and diesel, thereby protecting the climate and reducing our dependence on power struggles and fuel price fluctuations among oil producing countries
The previous round of subsidies for electric vehicles by the German government ended at the end of 2023, resulting in a significant decline in electric vehicle sales in 2024.
The new subsidy program is open to all car manufacturers, regardless of their country of origin. This inclusive approach sets Germany apart from other European countries such as France or the UK, whose subsidy programs effectively exclude many Chinese cars.
The Business Daily pointed out that if the subsidy program is only targeted at European manufacturers, it will be difficult to implement legally. Schneider explained that about 80% of newly registered electric vehicles in Germany are manufactured in Europe. He is confident in the quality of European and German cars, and 'consumers also need these models'.
According to some media reports, this decision may significantly benefit more affordable electric vehicle brands such as BYD, which are expanding their market share in Europe. Schneider stated that it will also launch more affordable models from local German car manufacturers this year: "These are currently excellent German cars on the market
According to data from the German Federal Motor Transport Authority cited by Economic Weekly, the top 11 new pure electric vehicles with the highest registration volume in 2025 will all come from Volkswagen or BMW. In terms of hybrid vehicles, 7 out of the 10 most popular models come from BMW, Mercedes Benz, or Volkswagen. However, Chinese car manufacturers offer a variety of small cars and have recently achieved significant growth in vehicle registrations. These manufacturers also hold an important position in the field of range extenders.
Just a week ago, China and Europe reached a consensus on the dispute over tariffs on electric vehicles, and the European side released a guidance document on submitting price commitment applications. The German newspaper "Handelsblatt" quoted experts as commenting that China hopes to shape itself as a "rational" power, while the EU's release of guidelines sends a signal that Chinese manufacturers are still welcome.
The objective attitude of European public opinion towards reaching consensus between China and Europe. In another report, the Business Daily mentioned that even with tariffs, Chinese car sales in Europe have recently increased. The Swiss Watson News website quoted automotive expert Dudenhof as saying that there are no signs of dumping in Europe. On the contrary, Chinese brands such as BYD or MG have significantly higher sales prices in the European market than in the domestic Chinese market. The tariff policy has had a real impact on the electric vehicle industry in recent years, including price chaos and lack of consumer confidence. Therefore, the German automotive industry holds a positive attitude towards the EU's new minimum price guidelines, believing that they can maintain market stability.