Germany raises 2027 EV subsidy budget to €1.72 billion as demand outruns forecasts

Budget line more than doubles

The federal government plans to spend 1.72 billion euros on the electric car purchase bonus in 2027, 917 million euros more than the 803 million in its draft budget. The figures come from an adjustment document the Federal Finance Ministry sent to the Bundestag budget committee on Monday evening, 9 November. The document lists 1,134 pages of changes made since the draft was adopted, and the committee plans to finalise the 2027 budget from Thursday. The extra money is to come from the Climate and Transformation Fund (KTF), and the overall programme volume stays unchanged. The ministry justifies the increase with demand that has grown faster than officials expected:

“The EV subsidy scheme is developing far more dynamically than anticipated when it was designed and its funding requirements were originally calculated.”

Funds draining faster than planned

The bonus is graded by income and number of children, paying up to 6,000 euros per vehicle, and has been available since May. By early October, the Federal Office for Economic Affairs and Export Control (BAFA) had approved 100,000 applications and paid out more than 430 million euros. Government estimates had put the funding at enough for about 800,000 vehicles, with the programme planned to run from 2026 to 2029. If application levels stay unchanged, WELT and N-tv report that one billion euros could be paid out in 2026 alone. Focus calculates that monthly payouts of about 200 million euros could use up the funds by autumn 2027. Politico and Focus cite a total budget of 2.7 billion euros, while N-tv and WELT put it at three billion euros.

Government draft (2027)803

Revised allocation (2027)1,720

Government draft (2027)

803 € million

Revised allocation (2027)

1720 € million

Data from the article text

Electric car market and buyer risk

Electric cars now make up a large share of new registrations, with battery-electric cars at around 30% of new registrations in the year through 1 October 2026, according to the Federal Motor Transport Authority data cited by WirtschaftsWoche. WirtschaftsWoche reports almost 100,000 new battery-electric cars registered in October, up nearly 80% from October 2025. Politico, citing the same authority, puts October EV registrations above 94,000 for a record 37% market share, and the sources do not reconcile the two figures. Including hybrids, three quarters of new cars in October had an electric drive, while pure combustion engines held 24.6% and diesel just over 9%. Focus, citing WELT, reports that Chinese-owned brands reached a 12.1% share in the third quarter with about 39,500 registrations, up 168%, while the Volkswagen Group registered 26,500, up 13%. Constantin Gall, an automotive expert at the EY consultancy, said:

“The market is booming -- but it is booming primarily because of the subsidy.”

Chinese-owned brands39,500

Volkswagen Group26,500

Chinese-owned brands

39500 vehicles

Volkswagen Group

26500 vehicles

Data from the article text

The subsidy is only granted after a vehicle's first registration rather than when a dealer order is placed. Politico notes that buyers facing long delivery times therefore carry a financial risk.

Minister's reassurance

Environment Minister Carsten Schneider said in October that demand had exceeded all expectations. He also sought to reassure prospective buyers that enough money remains in the programme to keep funding it through 2027. In an interview with Auto Motor Sport, he said:

“Anyone who decides to buy a battery-electric vehicle now and meets the eligibility criteria need not worry about next year either.”

WELT reports that the coalition apparently assumes the funds will still be sufficient at the end of 2027. So far, the government has given no indication of whether it intends to add more cash to the programme.