German coalition agrees new subsidy for electric cars for lower-income households

On 13 November 2025, the coalition committee of Chancellor Friedrich Merz's government, the leaders' forum of the conservative CDU/CSU and the Social Democrats (SPD), agreed on a new subsidy programme for electric cars. The incentive was aimed at households with low and middle incomes rather than at all buyers.

The measure followed the end of Germany's previous nationwide electric car bonus in late 2023, which was stopped abruptly after a Constitutional Court ruling upset the government's budget planning. Since then, new electric car registrations had grown only slowly, and the car industry and the SPD in particular had pressed for renewed support. The coalition agreement had already promised to boost electric mobility.

The programme was intended to be financed from federal funds, including the climate and transformation fund, a special budget for climate and industrial modernisation. Details such as the exact income limits and payment rules were to be worked out afterwards. The decision mattered because it created a new recurring spending commitment, which is why it later features in discussions about how much extra money the federal budget for 2027 would require.