Have Germany’s new EV incentives made an impact?

08 June 2026

The online portal for Germany’s new electric vehicle (EV) incentives opened in May. This came as the powertrain group bolstered the overall new-car market, while internal-combustion engine (ICE) models struggled. Tom Hooker, Autovista24 journalist, analyses the impact of incentives.

The German new-car market narrowly managed its fourth month of consecutive year-on-year growth in May. Registrations increased by just 0.1%, as 239,448 new models took to the country’s roads, the KBA reported.

According to Autovista24 analysis, this translated to an additional 151 deliveries compared to the same month last year. However, last month saw two fewer working days than May 2025. The VDIK stated that registration growth was 11.2% when adjusting for calendar effects.

Despite a relatively stagnant month, May kept the German new-car market on its path of growth. Deliveries were up 3.6% between January and May, totalling 1,188,015 units. At first glance, Germany’s new EV incentives for private buyers appear to be a driving force behind this improvement.

The powertrain group enjoyed soaring volumes in the cumulative figures and during May, while ICE models continued their decline. However, a closer look at the figures reveals that EV incentives were not the only factor at play.

EV incentives activated

After being revealed in January, the online application portal for Germany’s new EV incentives opened on 19 May.

The scheme offers a direct grant for the purchase and lease of new battery-electric vehicles (BEVs), plug-in hybrids (PHEVs), extended-range electric vehicles and fuel cell vehicles (EREVs). PHEVs and EREVs must meet climate protection standards and will be approved up to June 2027.

The model must be bought by a private individual and needs to be kept for at least 36 months. Taxable household income and family size determine the amount of funding available for each applicant. Importantly, retroactive applications are eligible back to 1 January 2026.

‘These EV incentives are an important building block in creating additional purchase stimulus and stimulating the private EV market in a targeted manner. From now on, car dealerships will be in the front row with great motivation to inspire customers for this subsidy,’ commented ZDK president Thomas Peckruhn.

‘The current trend in demand shows that more customers are consciously opting for an EV,’ he noted. The new incentives were also well received by another industry body, which highlighted an uptick in BEV orders.

‘The federal government’s funding is an additional incentive, especially for small and medium-sized incomes, where price sensitivity plays a special role. The development of demand is optimistic, with incoming orders for BEVs more than doubling compared to the same month last year,’ said VDIK president Imelda Labbé.

An immediate impact?

EV deliveries rose by 28.8% year-on-year to 87,890 units, the smallest improvement since February 2026. Within this category, BEVs recorded a 39.3% increase to 59,969 deliveries. For PHEVs, a 10.9% upswing to 27,921 units was the lowest growth of 2026 so far.

Even so, EVs’ slice of the new-car market did not thin in May. Despite a 0.2 percentage point (pp) drop in share from April, EVs’ 36.7% hold was up 8.2pp year on year.

BEVs suffered a month-on-month fall of 0.8pp to a 25% share. However, this represented an increase of 7pp compared to May 2025. Conversely, PHEVs’ share rose by 0.6pp from April, reaching 11.7%. This was up 1.2pp compared to 12 months prior.

May’s results remained roughly in line with the cumulative EV performance. Volumes grew by 32% in the first five months of the year, as the powertrain’s share reached 35%. This was up 7.5pp from the same period in 2025.

BEV deliveries improved by 40.9% between January and May. This gave the technology a 23.9% slice of the market, up 6.3pp year on year. PHEV volumes grew by 16.1%, while its hold rose by 1.2pp to 11.1%.

Consistent growth to continue?

This indicates year-on-year EV growth could continue at a consistent pace, rather than resulting in a short-term delivery spike.

This is in part thanks to the new EV subsidies’ long-term ambition. The government has allocated €3 billion to the scheme and aims to subsidise around 800,000 vehicles by the end of 2029.

By contrast, Italy’s latest EV incentives, launched in October 2025 with more than €597 million in funding, were exhausted within 24 hours.

The retroactive design of Germany’s scheme may also result in a more balanced rise throughout this year. This is because buyers did not need to hold off on purchases at the start of 2026. Even so, June will provide more answers on whether the programme’s activation will cause a steep EV registration surge.

Brands to benefit from EV incentives?

Germany’s new EV incentives also differ from the UK’s scheme, which uses a split-tier system based on strict sustainability criteria.

Instead, Germany’s subsidy puts all carmakers on an equal footing. It allows brands that import vehicles to Europe to benefit from the same eligibility as those hailing from the continent. This comes as the balance between domestic and international brands in Germany’s BEV market is shifting.

‘The disproportionate increase in the BEV market share of international manufacturers is due to their strong product range, especially in the entry-level segment. It is also due to the lower operating costs compared to ICE models,’ explained Labbé.

Some non-European brands, such as Tesla, saw strong growth in the overall new-car market during May. The US marque enjoyed the best year-on-year growth of any brand that recorded more than 100 registrations. Its 322.4% improvement was paired with a 2.1% share.

Meanwhile, BYD held a 2.6% share, benefiting from a 232.1% improvement. Xpeng managed a comparable growth of 240.3% on a smaller share of 0.3%. Leapmotor was a little further ahead, after a 139.1% improvement left it with a 0.5% share. Smart recorded a similar increase of 140.2% year on year, as it represented 0.3% of all new-car deliveries.

Declining domestic brands

Meanwhile, a declining trend was seen across most of Germany’s best-selling brands during May. Mercedes-Benz saw registrations fall by 8.9%, despite moving the second largest number of new cars, taking an 8.3% share.

BMW, the third best-selling carmaker in May, endured a 3.4% fall while keeping an 8.2% market share. The Volkswagen (VW) brand was some way ahead of them both with a 19% slice of the market. However, it also suffered an 8.9% delivery drop compared to May 2025.

Looking at VW Group brands, Audi felt a 2.7% downturn in volumes as it took fifth in the best-sellers table. Skoda was above it, with an 0.8% decline in registrations. SEAT sat sixth, after a 4.6% year-on-year delivery drop.

Only two carmakers in the top 10 best-sellers list recorded growth. This was Opel and Renault, as registrations rose by 9.9% and 43.5%, respectively. Meanwhile, the only two brands in the list originating from outside of Europe saw declines. Hyundai suffered a 16.9% drop, as Ford volumes fell by 21.7%.

Poor ICE performance

With some brands experiencing a more difficult May, so too did ICE models. Petrol deliveries plummeted by 23.7% to 51,806 units, as its market share fell 6.8pp to 21.6%. This placed it 3.4pp behind BEVs.

Diesel suffered a shallower drop of 13% year on year to 30,547 deliveries. In turn, its grip on the market loosened by 1.9pp to 12.8%. This was just 1.1pp ahead of PHEVs.

Combining petrol and diesel figures, ICE models made up 34.4% of total new-car volumes. This was 2.3pp behind EVs and 8.7pp down year on year. The ICE group’s 20.1% fall in May was diluted to a 15.3% drop in the cumulative figures. Between January and May, the share of ICE models remained ahead of EVs by 0.7pp, at 35.7%.

This decline was mostly powered by petrol’s 18.5% slump in the first five months of the year. This caused its share to decline by 6.1pp to 22.2%. Diesel’s slice of the market also thinned by 1.9pp to 13.4%, paired with a 9.3% drop in volumes.

No help from hybrids?

Hybrids saw a more positive performance, but did not offer much help in May. The technology, which includes full and mild hybrids, saw just 555 additional units registered last month compared to May 2025.

This translated to a 0.8% growth, with 67,545 new models delivered. Hybrids still led the market with a 28.2% share, up 0.2pp from May 2025.

However, this slowing growth could indicate that private buyers are beginning to move away from technology. Instead, they may be more inclined to opt for EVs now that incentives have been activated. Between January and May, hybrid figures rose by 5.4%, while its share was up 0.5pp to 29%.

As ICE deliveries fall and hybrids potentially face a slowdown, EV registration growth will become essential to the new-car market’s health. Therefore, the effectiveness of Germany’s latest EV incentives will have a big impact on the country’s automotive sector.