Automakers in Germany reduced their in-house discounts on electric vehicles in May, according to the latest monthly new car market report from the private Centre Automotive Research (CAR).
The decline is seen as a response to the reintroduction of government subsidies, which are being paid retroactively for vehicle registrations made during the current year.
“This suggests that manufacturers are testing market demand,” said CAR director Ferdinand Dudenhoeffer, noting that the price gap between electric vehicles (EVs) and internal combustion engine (ICE) cars is widening again, reversing a previous trend.
Data covering the 20 best-selling EV models shows that average discounts have decreased from 19.5% in January to 18.6% in May. As a result, electric cars are now on average €1,971 more expensive than comparable ICE vehicles, excluding government incentives.
CAR also found that discount reductions were most pronounced in the small EV segment, which is more likely to benefit from subsidy eligibility among households.
Under the current scheme, subsidies apply to the purchase and leasing of new electric cars, certain plug-in hybrids, and range-extender EVs equipped with small combustion engines to increase driving range. Eligibility requires registration from 1 January 2026 onward.
The size of the government grant varies between €1,500 and €6,000, depending on the vehicle type, household income (up to €80,000), and family size. The scheme applies only to private buyers, not company vehicles, and is intended to support up to 800,000 vehicles.
