Germany’s efforts to support its automotive industry, through new corporate incentives for electric vehicles, may have started to pay off, Kallanish reports.
Following a 69% collapse in all-electric (BEV) car sales in August, the government announced in early September it is strengthening e-mobility with tax improvements. Companies may benefit from a special depreciation allowance for BEVs and other emission-free vehicles, such as fuel cell electric vehicles (FCEVs). Purchases will be exempt from tax, starting at a rate of 40%, and be valid until December 2028.
Additionally, employees who use an electric company car for private purposes will be taxed at a reduced rate, with the cap on the vehicle price now expanded to €95,000 ($103,876), from €70,000 previously.
Data released by the Federal Motor Transport Authority (KBA) this week show BEV sales rebounded in September, rising by 8.7% year-on-year to 34,479 units. Registrations account for 16.5% of the new German car market. FCEV sales rose exponentially in the month, to 39 registrations.
“With the growth initiative, the federal government has set out to support the automotive industry and its employees in the e-mobility modernisation project,” the government says in a statement.
The move comes amid an ailing automotive industry, with rising concerns about weak demand, plant closures and other regulatory and macroeconomic headwinds. By helping the auto sector, Germany will also support growth in associated supply chains such as the steel industry.
In September, overall new car sales rose 6% y-o-y in Germany to 530,805 units. Plug-in hybrid (PHEV) registrations slipped 2.9%, while hybrid electric (HEV) sales increased 4.7%.
Car manufacturing also improved last month, with a total of 390,000 units coming off production lines, according to auto association VDA. The volume represents growth of 8.33% on-year and 25.8% on-month.