Introduction to the Environmental Bonus
The Environmental Bonus is a government financial incentive in Germany aimed at supporting and accelerating the transition to environmentally friendly mobility, in particular the adoption of electric and plug-in hybrid vehicles. The Environmental Bonus, often referred to as the purchase incentive for electric cars, was first introduced in 2016 and has been repeatedly revised. The legal structure, eligibility requirements, and administration of the Environmental Bonus are determined primarily by national regulations, funding guidelines, and the administrative practice of the Federal Office for Economic Affairs and Export Control (BAFA).
Legal Basis of the Environmental Bonus
Funding Guideline for Electromobility
The primary legal basis is the currently applicable “Guideline for Promoting the Sale of Electrically Powered Vehicles (Environmental Bonus)”. This administrative regulation, issued by the Federal Ministry for Economic Affairs and Climate Action (BMWK), specifies the funding requirements, procedures, and responsibilities involved in awarding the Environmental Bonus.
Relevant Laws and Regulations
Although the Environmental Bonus is based on a funding guideline, numerous other laws and regulations govern its application. These include, in particular, the Budget Act, the Federal Budget Code (BHO) regarding technical budget processing, the Act on the Environmental Compatibility of Motor Vehicles (Environmental Code), as well as EU regulations concerning the granting of government aid and rules to avoid over-subsidisation pursuant to EU state aid law.
Responsible Authorities
The operational administration of the Environmental Bonus is handled by the Federal Office for Economic Affairs and Export Control (BAFA). BAFA is the responsible authority for audits, claims for repayment, and management.
Requirements and Eligibility
Eligible Vehicle Types
In order to claim the Environmental Bonus, the vehicle must be listed on the BAFA’s current list of eligible vehicles at the relevant time. Eligible vehicles include battery electric vehicles (BEVs), plug-in hybrid vehicles (PHEVs), and, depending on political developments, also hydrogen-powered vehicles. It is essential that certain technical minimum requirements are met, including a sufficient electric range for plug-in hybrids.
Eligible Applicants
Private individuals, companies, foundations, public bodies, and associations with registered office or place of business in Germany are eligible to apply. Leasing companies can apply for vehicles registered to them, provided the funding is passed on to the end customer.
Eligible Acquisition Process
The Environmental Bonus is granted for new vehicles and, under certain conditions, for young used vehicles if they were first registered after the eligible cut-off date. The prerequisite is acquisition through purchase or leasing (with a minimum term specified in the guideline).
Prohibition on Cumulation and State Aid Law
Cumulation with other incentives is generally only permitted in the exceptions specified in the guideline. There are specific requirements to prevent over-subsidisation according to EU state aid law. Funding may be denied or reclaimed if the maximum overall subsidy amount is exceeded.
Scope and Structure of the Environmental Bonus
Funding Amount and Financial Structure
The amount of the Environmental Bonus varies according to vehicle type and price. The bonus consists of a federal contribution and a manufacturer’s share. The manufacturer’s share must be deducted directly from the purchase price as a net discount, as evidenced by the invoice; the federal share is paid retrospectively by BAFA upon application.
Changes Due to Political Decisions
The exact structure (in particular, the amount of the incentive and the eligible vehicle groups) is determined by political decision-making and is subject to ongoing change. Budgetary considerations and political aims, in particular, regularly influence the revision of guidelines.
Application Procedure and Proof of Eligibility
Application Submission
Applications are submitted exclusively electronically via the designated online portal of BAFA. Deadlines and required documents are governed by the funding guideline. The application must be submitted no later than one year after initial registration or vehicle handover.
Obligations for Proof and Documentation
In particular, the invoice showing the federal and manufacturer’s shares, registration certificates (Parts I and II), and, where applicable, proof that the vehicle is used must be submitted. Subsequent audits and random checks are possible.
Rights of Recovery and Revocation
BAFA may reclaim funding already granted in whole or in part in cases of breaches of regulations (e.g., premature sale abroad, false statements, over-subsidisation). The legal basis for this is found in the funding guideline, supplemented by §§ 48 ff. of the Administrative Procedure Act (VwVfG).
Further Legal Aspects
Tax Treatment
The federal government’s Environmental Bonus payment is not taxable income; the manufacturer’s share, as a price reduction, immediately lowers the basis for VAT calculation. The exact tax treatment should be checked on a case-by-case basis in accordance with the applicable regulations.
Data Protection and Reporting Obligations
The application and processing involves the handling of personal data and is therefore subject to the provisions of the General Data Protection Regulation (GDPR) and the Federal Data Protection Act.
Outlook and Reform Efforts
The development of the Environmental Bonus is dynamic, as the program is regularly adapted to climate policy objectives, technological advances, and the status of the automotive industry. Depending on the current budgetary situation and political priorities, its scope, target groups, and funding amount may in the future be expanded, reduced, or discontinued.
Summary: The Environmental Bonus is a central instrument for achieving national climate targets in the transport sector and is subject to extensive legal requirements. Its structure and administration are based on detailed funding guidelines, statutory regulations, and European restrictions. Receiving the incentive requires strict compliance with formal and substantive requirements, and any violation may lead to revocation or repayment. Legal certainty and transparency are the focus in structuring the funding process.
Frequently Asked Questions
Who is currently eligible to apply for the Environmental Bonus?
According to the funding guideline, those eligible to apply for the Environmental Bonus are individuals and companies that purchase or lease an eligible electric vehicle registered in Germany. This includes private individuals with residence in Germany, companies, foundations, public bodies, and associations with registered office or branch in Germany. It is required that the vehicle is either registered to the applicant or – in the case of leasing companies – is leased for at least twelve months. It is particularly important to note that municipalities and public institutions are also eligible to apply to the extent permitted by their respective budget regulations. Applications must be submitted exclusively online via the electronic portal of the Federal Office for Economic Affairs and Export Control (BAFA). There is also a deadline regulation, requiring the application to be submitted no later than one year after the first registration, whereby the application date and the correct and complete submission of all required documents are decisive.
What legal requirements apply to a vehicle’s eligibility?
Under current law, a vehicle must meet certain technical and legal requirements to be eligible. The eligible vehicle must be listed in the published BAFA list of eligible models. Only fully battery-electric vehicles and plug-in hybrids are eligible, as long as they meet the maximum permissible CO₂ emission limits and minimum ranges (the so-called “eligibility criteria for plug-in hybrids”). In addition, it is crucial that the vehicle is being registered for the first time (“new car”) or, in the case of young used vehicles, that no Environmental Bonus has yet been granted for the same vehicle. Net list price limits must also be observed, along with an eligible purchase or leasing contract that clearly identifies the manufacturer’s share of the Environmental Bonus. Proper proof of acquisition (invoice, leasing contract) and registration to the applicant is legally binding.
What deadlines must be observed when submitting an application?
The funding guideline specifies that the application for the Environmental Bonus must be submitted no later than one year after the vehicle’s initial registration. The key factor is the date the complete application is received by BAFA. For leased vehicles, the deadline typically commences on the date of registration to the lessee. Late applications are not legally considered. For used vehicles, it must be ensured that no Environmental Bonus has previously been granted for the specific vehicle, and the initial registration date is determinant. Once the deadline has expired, any legal entitlement to funding lapses.
What legal consequences arise from fraudulent applications or false statements?
Anyone who knowingly or grossly negligently provides false information in the course of the application process faces not only a claim for repayment of the Environmental Bonus already paid, but may also be subject to further civil and criminal consequences. According to general subsidy law (§ 264 German Criminal Code, subsidy fraud), the Environmental Bonus and similar funding measures are legally classified as subsidies. Therefore, any false information—for example, regarding proof of the vehicle, the purpose of funding, or eligibility—is subject to penalties. BAFA is entitled to reclaim funds already disbursed and to initiate fine proceedings. Further, exclusion periods for future applications may be imposed.
How is the application legally reviewed and processed by BAFA?
BAFA examines each submitted application for both formal and substantive accuracy. The submitted documents, such as the registration certificate, purchase or leasing contract, and declaration of receipt of the manufacturer’s share, are legally evaluated and checked for compliance with the requirements of the respective funding guideline. BAFA may request additional evidence or documents. Processing is carried out entirely digitally, with each step securely documented for audit purposes. Only after a positive review is the Environmental Bonus approved and paid out. In the case of irregularities or missing documents, the application may be rejected; a written notice of rejection is issued, including instructions on the legal remedies available.
What legal remedies are available if the Environmental Bonus application is rejected?
If an application for the Environmental Bonus is rejected by BAFA, the applicant receives a written rejection notice including the reasons. An objection can be filed against this notice within one month. The objection must be submitted in writing, accompanied by justification. After a renewed review by BAFA, the objection will either be granted or another rejection notice (objection notice) will be issued. Legal recourse against the objection notice is possible by filing a lawsuit with the competent administrative court, subject to federal and administrative procedural deadlines.
What obligations to repay can arise?
If the legal requirements cease to apply after funding has been granted – for example, due to an early resale of the vehicle before expiry of the minimum holding period or discovery of false statements – there is a statutory obligation to repay the Environmental Bonus in full or in part. The minimum holding period is generally six months from first registration, or, in the case of leased vehicles, depends on the lease term (at least twelve months). Repayment claims are usually asserted by repayment order from BAFA and can also be enforced through compulsory measures. A violation of the funding requirements may also result in exclusion from future funding programs.
