The new multibillion-euro electric vehicle subsidy introduced by the German government appears to be favoring foreign car manufacturers, particularly those from China. This assessment comes from Burkhard Weller, President of the Association of German Car Dealers (VAD), speaking to the news magazine Politico.
Weller stated that when the association asked its dealerships what cars were being purchased using the subsidy, the repeated answer was “the segment between 20,000 and 30,000 Euros.” The dominant brands in this category are Chinese automakers. Furthermore, in the 42 dealerships within Weller’s own group, sales of cheaper Chinese cars more than doubled in May; “the increase for BYD was 235 percent,” the association president reported.
German manufacturers are noticeably absent from this price bracket. For example, VW’s ID.Polo is not expected until September. While limited options from the EU are available, such as some Renault, Peugeot, Seat, and Cupra, Weller noted that the offering there is “thin.” This outcome is particularly sensitive given the EU’s efforts to protect its own industry against Chinese competition, exemplified by measures like the “Industrial Accelerator Act,” which mandates Made-in-EU requirements for state funding.
Details regarding the subsidy: it is available for all electric vehicles registered from January 1, 2026 onwards. It applies only to new vehicles and provides up to €6,000, dependent on the car model, income, and number of children. The total allocated fund is €3.5 billion.
Weller challenged the optimism of Federal Minister for the Environment, Carsten Schneider (SPD), who had praised the new funding. He argues that so far, the only submissions have been for postponed purchases. Although the subsidy was announced in December 2025, details were lacking at the time. “That contributed to purchasing restraint,” Weller said, noting that this restraint is now dissipating. He cautions that this relief may simply be due to customers who planned to buy an electric vehicle anyway. Regarding the subsidy’s real-world impact, Weller stated, “My forecast today is zero. no one is switching to electric because of the subsidy.”
Weller suggested that if funding is to be provided, used cars should also be included. However, he emphasized that more critically needed are expanded charging infrastructure, lower electricity prices, and greater price transparency at charging stations. His specific proposal is to implement a system similar to mobile phone roaming: consumers should agree on a tariff at home, and that price should be honored at any charging station.
