Approximately One-Third of Electric Car Owners Forego the GST Discount
In Germany, a significant trend has emerged in the electric vehicle (EV) sector – a decline in the number of applicants for greenhouse gas (GHG) quota funding. This decline is influenced by several key factors.
The phase-out of direct EV subsidies is one such factor. Germany fully phased out its €4,500 per-vehicle subsidy by the end of 2023, reducing the attractiveness of applying for GHG quota funding and likely contributing to the drop in applications in 2024.
Changes in GHG quota rules and payouts have also played a role. The exact GHG quota system structure for 2025 was not finalized as of early 2025, but an amendment restricts GHG quota usage to the respective year only, meaning quotas cannot be banked for future use. This limits flexibility for EV owners and companies, possibly deterring applications.
Increased CO2 and fuel taxes have altered economic incentives. The CO2 tax on fuels increased in 2025 from €45 to €55 per tonne, raising fuel prices and operating costs, impacting the transport sector’s incentive structure. Although aimed at promoting cleaner alternatives, these tax changes might intersect with GHG funding policies, complicating the incentives.
Stricter vehicle emissions and fleet requirements have also affected the availability, costs, and eligibility for GHG quota benefits. EU regulations have tightened CO2 emission limits for vehicles from 2025, imposing penalties on manufacturers. These changes can indirectly influence EV owners' funding applications.
Additional administrative and registration requirements may also be deterring some applicants. While specific new registration requirements for GHG quota funding are not detailed, the tightening of regulations and the ordinance changes to the Federal Immission Control Act suggest more stringent compliance and eligibility criteria.
Initially, the registration process for GHG quota funding is free, but intermediaries retain a portion of the bonus. To participate, EV drivers need to register with an intermediary, such as automobile clubs, energy suppliers, or specialized companies.
It's important to note that the German Environment Agency (UBA) is the organization that provides information about the greenhouse gas quota regulation in Germany. Last year, approximately one-third of electric vehicle owners did not apply for funding from the greenhouse gas quota regulation, down from 75% the previous year.
In 2022, payments were made to 1.15 million electric vehicles, an increase of only around 20,000 vehicles from the previous year. Interestingly, EV drivers can sell their saved carbon dioxide as an emission allowance to mineral oil companies.
The decline in EV owners applying for GHG quota funding is a notable trend that warrants continued monitoring and potential adjustments to policies to encourage more widespread adoption of electric vehicles in Germany.
- The decline in the number of electric vehicle (EV) owners applying for greenhouse gas (GHG) quota funding in Germany might be due to several factors, with the phase-out of direct EV subsidies being one such factor.
- Changes in GHG quota rules and payouts have also influenced the trend, as an amendment now restricts GHG quota usage to the respective year only, impacting the flexibility of EV owners and companies regarding applications.
- Increased CO2 and fuel taxes have altered economic incentives in the transport sector, potentially complicating the incentives for GHG quota funding applications.
- The rise of electric vehicles (EVs) in the lifestyle and technology sectors, such as cars and electric vehicles, could benefit from more adjustments to policies, considering the significant decrease in the number of applications for GHG quota funding.
