Electromobility for businesses: Overview of Tax Benefits and Incentives

Electromobility for businesses: Overview of Tax Benefits and Incentives

The year 2024 brings changes to the landscape of electromobility funding in Germany. The environmental bonus for electric vehicles was halted on December 18, 2023, by a ruling from the Federal Constitutional Court. The current developments may seem challenging at first glance, but for businesses, diverse opportunities continue to emerge to benefit from tax advantages and incentives in the field of electromobility. This post provides an overview of the key aspects that are particularly relevant for companies.

Funding for vehicle purchases

Despite the suspension of the environmental bonus, there are still opportunities to leverage financial benefits when acquiring electric vehicles:

Manufacturer commitments

Automakers such as Stellantis, Smart, Audi, and Renault have announced that they will continue to grant parts of the reduced environmental bonus under certain conditions. However, the exact procedures vary: Some manufacturers cover the governmental portion of the purchase bonus for customers who ordered their vehicles by the end of 2023. Others extend their commitment until the middle of the upcoming year or retain their manufacturer's share at least for the year 2024. These details should be considered when selecting and ordering vehicles. These offers may also be interesting for companies seeking individual solutions.

Discount campaigns

According to ADAC, some manufacturers offer significant discounts on certain electric cars. Therefore, businesses should inquire with their car dealerships about possible discount campaigns.

Tax benefits for sustainable corporate mobility

The tax incentives for electric vehicles continue to offer financial advantages to companies:

Vehicle tax exemption

The vehicle tax exemption for electric vehicles remains an attractive incentive for businesses. Electric cars are exempt from vehicle tax for up to ten years. Companies can also avail this exemption for used vehicles and for conversion to electric drive. The message here is that electric fleets are not only environmentally friendly but also financially advantageous. The long-term perspective should encourage companies to consider electric vehicles as a sustainable contribution to their mobility strategy.

Graduated vehicle tax

After the expiration of the tax exemption, the vehicle tax for electric cars is graduated based on the total weight, but it remains 50% cheaper than for combustion engine vehicles.

Advantages in income tax

Companies can benefit from the income tax advantages of electromobility. Charging electric vehicles at the workplace, whether privately or for business purposes, remains tax-free until December 31, 2030. This also includes the temporary provision of corporate charging stations.

THG Quota as an additional revenue source for companies

The Greenhouse Gas Reduction Quota (THG Quota) offers companies the opportunity to generate additional income with their electric vehicles. By selling THG certificates representing the CO2 savings from vehicle electricity, companies can receive premiums in the three-digit range. This financial incentive can help reduce the operating costs of electric fleets.

Funding programs and grants from federal states

Various federal states financially support companies in building charging infrastructure. For example, North Rhine-Westphalia subsidizes the purchase, installation, and connection of charging infrastructure with grants of up to 40% of eligible expenses.

Additional grants from utilities and municipalities for corporate fleets

Electricity customers, especially companies, can benefit from financial incentives in some cities and municipalities. Energy providers and municipalities offer discounts on the purchase of wall boxes, financial support for the installation of charging stations, and discounted electricity. These incentives also serve as customer loyalty programs for companies.

Funding by the federal government

In addition to the tax incentives for electric vehicles, the federal government is implementing further measures and programs to achieve ambitious climate goals by 2030:

Immediate program 2022

The 8-billion-euro Immediate Program, adopted in June 2021, is a package of measures by the federal government for all sectors. It includes comprehensive measures to promote electromobility, including not only charging points for electric cars but also charging options for electric bicycles, as well as 200 million euros for fast-charging hubs in urban neighborhoods.

Charging infrastructure master plan II

The charging infrastructure master plan II, adopted in October 2022, reaffirms the commitment of the Grand Coalition to electromobility in Germany. With 68 measures, the plan sets the course for expanding the charging infrastructure. The goal is to make Germany the global market leader for electromobility by 2030. Despite current challenges in expanding the charging network, the federal government aims to create one million publicly accessible charging points by 2030.

Research and development programs

In addition to these overarching measures by the federal government, there are diverse research and development programs (R&D programs) by BMWi, BMVI, BMBF, and BMU in the field of electromobility. For example, the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports projects that harness the potential of electric vehicles for climate, environmental, and resource protection through the "Erneuerbar Mobil" R&D program. A total of 400 million euros are available for this purpose until the end of 2025. These projects are intended to contribute to improving quality of life and sustainable urban development.

Conclusion: electromobility as a strategic investment for companies

Despite the halted environmental bonus, numerous strategic advantages emerge for companies when introducing electric fleets. The tax and income tax benefits, the THG Quota, as well as various funding programs at the federal, state, and municipal levels, continue to make the transition to electric fleets extremely attractive. Companies should seize these opportunities to not only underline their ecological responsibility but also realize financial benefits. Thus, electromobility proves to be not only a sustainable but also a economically viable decision in the long term.

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