(Bloomberg) -- German Chancellor Olaf Scholz’s cabinet approved additional tax incentives for company fleets of electric cars only days after Volkswagen AG threatened to close factories in Europe’s biggest economy for the first time.
The tax breaks, part of a wider package designed to lift sluggish growth agreed on in July, will be worth about €465 million ($514 million) on average annually between 2024 and 2028, according to a briefing paper distributed by the government in Berlin.
Scholz’s ruling coalition last year abolished some purchase incentives for e-cars following a surprise judgment by Germany’s constitutional court that upended its budget planning and forced significant belt-tightening.
Under the new regulations, which still need backing from lawmakers, companies will be able to take advantage of a series of depreciating write-offs, starting at 40% in the first year. The government will also allow more expensive corporate vehicles to qualify for tax breaks when they’re used privately.
©2024 Bloomberg L.P.
