The German government is preparing the pursuit of new tax breaks for electric company cars, between disintegrating sales and raised unmatched plants closures at VW, reported WirtschaftsWoche.
According to an n-tv report, Economy Minister Robert Habeck stated, “Government is currently preparing tax breaks for electric cars and the car sector is a cornerstone of German industry and should remain so.”
According to Habeck, the auto industry is undergoing an ‘enormous’ transition. German manufacturers require long-term planning certainty, particularly when it comes to e-mobility and have to compete in the global market.
“If they fail to understand, the only one who will be happy is China, which will continue to expand its technological development,” said Habeck.
The government resolved to increase tax write-offs for company cars as part of the agreement on the 2025 budget among other things by raising the price threshold for eligible cars to 95,000 euros, thus involving several models produced by the nation’s luxury automakers.
Tens of thousands of people are employed nationwide by German automakers and their suppliers. However, their belated decision to dramatically increase their investments in electric vehicles and battery technologies is upending established industry networks and manufacturing procedures.
Automobile manufacturers, such as VW, one of the significant participants in Germany, are facing intense competition, especially in and from China. As profits decline, the corporation has implemented drastic cost-cutting measures and is now considering closing factories.
In Germany, the number of new electric car registrations has been declining for months, in part due to abrupt termination of subsidies that lowered the cost of the vehicles last year due to accounts inadequacy. According to the most recent official statistics, the number of new battery-electric vehicle registrations decreased by almost 70% in August as compared to the same month in 2023.
