07 August 2025
Electric vehicles (EVs) pushed the German new-car market into growth in July. Were recently introduced tax incentives to thank for this registration recovery? Autovista24 editor, Tom Geggus, investigates.
July was the first time since April 2024 that the German new-car market recorded double-digit year-on-year growth. With 264,802 models taking to the roads, registrations were up by 11.1%, according to the latest data from the KBA.
‘This marked a significant recovery from the previous month’s decline and reflects a continued shift in consumer demand towards electrified mobility,’ commented Robert Madas, Autovista Group’s regional head of valuations.
Germany’s new-car market has struggled in 2025. May has been the only other month to record an increase, with volumes up 1.2%. While July’s growth was a refreshing change of pace, it was not enough to change the current year-to-date trend.
With 166,7591 new cars taking to Germany’s roads between January and July, deliveries were down by 2.5% year on year. This equates to 42,313 fewer new cars making their way to customers.
With registrations of internal-combustion engine (ICE) models falling, July’s growth was powered by battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs). But just how well did these electric models perform, and were incentives to thank?
EVs and incentives
BEV registrations rose by 58% in July to 48,614 units. The technology captured an 18.4% share last month, up from a 12.9% market hold in July 2024. July’s BEV figures were just 0.1% behind those recorded in July 2023. At this point business and private purchases were subsidised by the German government.
In the year to date, 297,340 BEVs were delivered, an increase of 38.4%, according to Autovista24 calculations. This meant BEVs accounted for 17.8% of overall volumes during this period, up from 12.6%.
PHEV registrations surged by 83.6% to 27,197 units. The powertrain represented 10.3% of the market, up from its 6.2% share recorded one year prior. In the first seven months of 2025, a total of 166,102 PHEVs were registered, translating to year-on-year growth of 59.2%. This provided PHEVs with a 10% market share, up from 6.1%.
As a combined category, the EV market recorded 75,811 deliveries in July, up 66.4% year on year. This meant electric models took a 28.6% market share, up from 19.1% 12 months previously. In the year to date, plug-ins claimed a 27.8% share, up by 9.1 percentage points (pp). This was thanks to registration growth of 45.2%, with 463,442 units delivered.
Incentives linked to growth?
So, was this EV growth the result of recently introduced tax-based incentives? First, the scheme only covers BEV purchases from July 2025 to December 2027. While all-electric volumes exceeded PHEV figures last month, plug-in hybrids saw greater growth, continuing a trend established since February 2025.
Second, the scheme only covers corporate purchases. Private buyers and leasers do not benefit from the scheme. The VDIK outlined that companies buying BEVs for business use can deduct 75% from tax costs in the first year. After this, 10 % can be taken off in the second year, then 5% in the third and fourth years.
Third, following the withdrawal of incentives at the end of 2023 all-electric registrations struggled comparatively throughout 2024. Compared with July 2023, deliveries dropped by just 0.1% last month. Meanwhile, the first seven months of 2025 were up 10.6%, on the same period two years ago. This indicates non-incentive inspired improvement this year.
Autovista Group’s chief economist, Dr Christof Engelskirchen, also highlighted that the incentive programme fails to address the used-car market. This is a critical element in ensuring the long-term adoption of EVs. He wrote that ‘an increase in new-vehicle supply, without stimulating the demand for used models is not ideal.’
An increase in registrations without used-demand could also lead to supply outweighing demand in three to four years. This could impact the used-EV market in the future.
What is boosting electric growth?
ZDK president Thomas Peckruhn acknowledged that EV sales have continued to develop positively in Germany. However, he pointed out that a major contributing factor is a broader offering across the volume segments.
VDIK president Imelda Labbé made a similar observation. She also drew attention to an increasing number of BEV registrations for international manufacturers. ‘We attribute this increase to the significantly larger range of vehicles available in the entry-level segments,’ Labbé said.
‘In recent months, a number of brands have introduced new models that are technically mature and, above all, affordable for a broad range of customers and users,’ she added. ‘However, affordable vehicles are only one side of the coin.
The need for charging
Alongside budget, the lack of an accessible and robust, charging infrastructure is also a barrier to entry for those considering an electric model.
‘In order to achieve a sustainable ramp-up of electric mobility, we need a joint plan from all stakeholders for favourable framework conditions, which also includes charging infrastructure and electricity prices,’ Labbé commented.
Peckruhn also affirmed the need for better framework conditions. This includes a reduction in electricity taxes and a demand-oriented expansion of residential charging infrastructure. A consumer-friendly payment and pricing model for public charging was also suggested.
VDA president Hildegard Müller also argued for more public charging points, an expansion of power grids, and affordable charging.
‘The reduction in electricity tax for all consumers agreed upon in the coalition agreement could lower prices but is not included in the draft budgets for 2025 and 2026. Improvements are urgently needed here – otherwise, the federal government will miss the opportunity to secure cheaper charging current for e-cars,’ she added.
ICE wears thin
While EV registrations increased, ICE deliveries slid. Petrol registrations fell by 13.4% year on year to 72,192 units. This meant its market share fell from 35% in July 2024 to 27.3% last month. The year to date was similarly bleak, with deliveries dropping 25.9% to 469,651 units. The fuel type’s grip on the market hit 28.2%, down from 37.1%.
Diesel deliveries did not decline as much, but their volumes made up far less of the market. The fuel type accounted for 15.3% of all registrations, down 2.8pp. Its deliveries dropped by 6% to 40,529 units. In the year to date, it saw a 20.9% drop, with 251,911 new models hitting the roads. This meant it made up 15.1% of the market, down from 18.6% 12 months ago.
Combining petrol and diesel figures, the ICE sector fell by 10.9% last month to 112,721 registrations. This accounted for 42.6% of the total market, down from 53.1%. In the year to date, there were 721,562 ICE deliveries, down 24.2% year on year. Accordingly, ICE took a 43.3% share, down 12.4%.
So, while internal-combustion engines continue to command more of the German new-car market, the fuel type’s grip is thawing.
Most popular powertrain
While ICE thawed and EVs gained traction, hybrids continued to enjoy the greatest volumes. Combining full and mild variants, hybrid registrations reached 75,172 deliveries, up 15.5% year on year. This allowed the technology to claim a 28.4% share of the market, up 1.1pp.
The powertrain has been in a close battle with petrol for market dominance. It managed to take control in five out of seven months this year. However, its margin over its rival has only ever been a few hundred units. The exceptions to this trend were March, with a gap over 4,000 models, and July, where the difference was just under 3,000.
With this battle going the way of hybrids, the powertrain secured the greatest portion of the market in the year to date. Hybrids made up 28.5% of deliveries between January and July 2025, up from 25.1% 12 months ago. Registrations reached 475,138, up 10.7%.
Combining hybrid and EV numbers reveals a surging electrified market. In July, these models hit a 57% market share, up 10.6pp. Deliveries increased by 36.5% to 150,983 units. This bolstered the year-to-date figures to 938,580 registrations, up 25.4%, accounting for 56.3% of the market, up 12.5pp.
