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In July 2025, the German automotive market experienced a significant recovery, with new car registrations increasing by 36.5% year on year. This growth was primarily driven by a surge in electrified vehicles (EVs and hybrids), which accounted for 57% of the market, up 10.6 percentage points.
The growth in EV sales can be attributed to a combination of factors. One key driver has been the introduction of tax-based incentives in Germany, which aim to boost EV sales. These incentives include an increased price cap for company car tax benefits and a new accelerated depreciation method. However, early evidence suggests only a modest immediate impact on sales growth, with consumer hesitation and the need for stronger incentives still evident.
Despite these tax incentives, Europe’s EV sales growth slowed to its weakest pace of the year by June 2025, with only a 14% increase and overall new car registrations declining 5.1%. In Germany specifically, sales showed some recovery in July 2025 with the best results since April 2024, marking the second month of year-on-year growth.
However, it is too early to conclusively attribute sales growth to these measures, as the tax incentive scheme only began in July 2025 and covers EV purchases through 2027. A detailed analysis notes that the scheme only covers BEV purchases from July 2025 to December 2027 and only covers corporate purchases, suggesting that the growth in July was not solely due to these incentives.
In July 2025, hybrid registrations reached 75,172 deliveries, up 15.5% year on year, allowing the technology to claim a 28.4% share of the market. Battery-electric vehicles (BEVs) also saw a significant increase, with registrations rising by 58% to 48,614 units. As a combined category, the EV market recorded 75,811 deliveries in July, up 66.4% year on year.
The growth in EV sales has been positively received by industry leaders. VDIK president Imelda Labbé attributed the increase in BEV registrations for international manufacturers to a larger range of vehicles available in the entry-level segments. Hildegard Mueller, VDA president, argued for more public charging points, an expansion of power grids, and affordable charging, while emphasizing the need for a reduction in electricity taxes to lower charging prices.
Thomas Peckruhn, president of the ZDK, acknowledged that EV sales have continued to develop positively in Germany, citing a broader offering across the volume segments as a major contributing factor. Robert Madas, Autovista Group’s regional head of valuations, commented that the recovery reflects a continued shift in consumer demand towards electrified mobility.
In the year to date, hybrids made up 28.5% of deliveries between January and July 2025, up from 25.1% 12 months ago, with registrations reaching 475,138, up 10.7%. Combining hybrid and EV numbers reveals a surging electrified market, with 938,580 registrations in the year to date, up 25.4%, accounting for 56.3% of the market, up 12.5 percentage points.
While the German tax incentives provide financial levers to support EV adoption—especially for company cars—the full effect will likely unfold over the next 1-2 years as more consumers and firms adjust to the incentives and as the scheme continues to operate. The ultimate goal is to accelerate the transition towards a more sustainable transportation sector.
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The growth in company car sales, particularly electric vehicles (EVs), has been boosted by the introduction of tax-based incentives in Germany, which aims to accelerate the transition towards a more sustainable transportation sector. However, the full impact of these incentives on the overall év market growth may take more time to unfold, as the scheme only began in July 2025 and covers purchases through 2027.
In conjunction with these incentives, the popularity of electrified vehicles (EVs and hybrids) is driving a shift in consumer demand towards electrified mobility in Germany, with hybrid and EV registrations accounting for 56.3% of the market in the year to date. This surging electrified market is primarily led by a surge in battery-electric vehicles (BEVs) registrations, which have increased significantly, along with hybrid vehicles.
