Company cars: New tax advantages for electric cars

Faster depreciation and tax advantages even for more expensive electric cars as company cars: This is how the traffic light coalition wants to make the switch to electromobility attractive to companies and tradespeople, for example, tradespeople.

This article is part of the special topic Electromobility for trades and medium-sized businesses

In August, only 13,7 percent of new car registrations in Germany were electric vehicles. According to the Federal Motor Transport Authority, this was 68,8 percent fewer than in August 2023. Both private customers and commercial buyers are hesitant about electric vehicles. This is confirmed by Germany's car dealers. Orders for purely electric vehicles fell 41 percent and plug-in hybrids fell 33 percent in the commercial sector, but orders for diesel or gasoline vehicles increased 20 percent compared to the previous year, according to a survey by the Central Association of the Automotive Trade.  

The traffic light coalition now wants to offer companies stronger incentives to convert their fleets to electric mobility. "Company registrations account for the majority of new electric car registrations," Helena Wisbert of the Center for Automotive Research (CAR) explained to tagesschau.de.

For companies, this means that they newly purchased electric vehicles can be written off more quickly, which will apply retroactively from July 2024 to 2028. Over a period of six years, the purchases can then be written off from taxes – starting at a rate of 40 percent.

In addition, the company car policy Cap on the use of electric vehicle incentives from 70.000 euros to 95.000 euros gross list price. "With both measures, we are further increasing the attractiveness of electric vehicles in Germany and supporting the industry," emphasizes Federal Minister for Economic Affairs Robert Habeck.

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One percent rule for every vehicle!

0,25 percent, 0,5 percent or 1 percent - that makes the difference:

A company car is considered a non-cash benefit for tax purposes and must be included in the tax return. It is counted as income, which in turn determines the tax burden.

• A company car with combustion engine will with one percent of the gross list price per month calculated.
  
  
• For Electric Cars are currently only 0,25 percent of the gross list price for tax purposes – provided the gross list price is no higher than €70.000 (expected to be €95.000 under the new regulations). If the electric company car is more expensive to purchase, 0,5 percent of the gross list price counts as a non-cash benefit. 
  
  
• For Hybrid vehicles Under certain conditions, preferential regulations also apply. If a hybrid vehicle is chosen as a company car, monthly 0,5 percent of its gross list price as a monetary benefit. The vehicle must be externally rechargeable (i.e., only plug-in hybrids), CO2 emissions must not exceed 50 grams per kilometer, and the all-electric range must be at least 60 kilometers (at least 80 kilometers from 2025). 

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