Insights

Purchase incentives for new electric vehicles (EVs) have been announced in Germany. But how will they work, and what are the implications for the used-car market? Tom Hooker, Autovista24 journalist, discusses the topic with Autovista Group experts. For the first time since December 2023, government-funded EV incentives will become available in Germany. However, unlike previous subsidies, the new scheme will be income-dependent. Battery-electric vehicles (BEVs), plug-in hybrids (PHEVs) and extended-range electric vehicles (EREVs) are eligible for the incentives. The subsidy scheme comes as EVs recorded 49.6% registrations growth in 2025. This was a significant improvement from a 18.2% decline in 2024, the year after incentives ended. Funding applications can be submitted through an online portal, expected to open in May 2026. Incentives can be applied retroactively from 1 January 2026. A total of €3 billion has been allocated to the scheme. The government projects this will allow for around 800,000 vehicles to receive subsidies between 2026 and 2029. The incentive will be available for both buying and leasing applicable models, regardless of list price. All vehicles receiving the subsidy must be kept for at least 36 months. So, how is the announcement expected to affect Germany’s automotive market? Will it impact specific segments more than others? Could it influence residual values (RVs)? Scaling incentives The subsidy is expected to scale with taxable household income and family size. It is also dependent on the vehicle’s powertrain. For households with an annual income between €60,001 and €80,000, a BEV subsidy of up to €3,000 will be offered. This increases to €4,000 for households earning between €45,001 and €60,000. €5,000 will be made available for households with a yearly income of up to €45,000. BEV buyers can also benefit from an additional subsidy worth €500 per child, up to a total of €1,000. However, these amounts are lower for PHEVs. For example, those with a household income between €60,001 and €80,000 will only receive a base subsidy worth €1,500. Additionally, households with an income between €80,001 and €85,000 will only be allocated funds if they have at least one child. At least two children per household are required to receive subsidies if annual earnings sit between €85,001 and €90,000. Therefore, the full €6,000 support will only be available for households below a taxable income of €45,000, or €22,500 per person for couples. On top of this, they must have two children and be purchasing a BEV. This means that only a small share of German new‑car buyers will qualify for the maximum amount, especially in the BEV-relevant price classes.  Lower incomes not supported? ‘The new German incentive scheme is unlikely to support citizens with lower incomes,’ said Christian Schneider, director of valuations at Autovista Group. ‘Even if BEVs reach price parity with new internal-combustion engine (ICE) vehicles, prices for all powertrains have been rising significantly. This means that most people from this income class cannot afford a new vehicle,’ he explained. ‘Additionally, this new scheme is creating pressure on BEV RVs. In turn, leasing rates will also not fully benefit from this incentive. ‘There would have been smarter ways to invest this money. A more effective implementation could increase electrification, stimulate new and used-car demand, and support a wider range of citizens. For example, the funds could have been used to invest in charging infrastructure or incentivise charging prices,’ commented Schneider. Incentives impact residual values Autovista Group experts forecast that the strongest negative RV impact from the incentives will be faced by BEVs. This forecast is accordingly adapted to experts’ observations of new-car sales and incentives. In December 2025, a decline of 1.9% in BEV RVs expressed as a percentage of retained list price (%RV) was predicted in 2026. This will be driven by two effects. First, the powertrain is projected to experience pressure on prices in the short term. As new-car list prices drop due to the incentives, this can lead to lower used-car prices as the market adjusts. Second, Autovista Group experts forecast that there may be an oversupply of BEVs in the medium term. Subsidised new registrations typically create a wave of used BEVs returning to the market simultaneously after two to four years. This can cause longer stock days and declining RVs when vehicles enter the used-car market. Some European countries with early, aggressive subsidies have already felt the impact of this trend. Additional BEV effects Vehicles in the €30,000 to €45,000 price band will likely be most affected by the subsidies. This price range includes many compact crossovers and other BEVs aimed at the mass market. In this bracket, Autovista Group experts project that the incentives will significantly alter price positioning. The scheme may also only provide a limited uplift to BEV demand. This is because households earning below €45,000 are unlikely buyers of new BEVs, or indeed any new car. Buyers in this demographic would be more likely to consider smaller or inexpensive models. Additionally, it is more likely that households in this income bracket will opt for used vehicles. Even then, they can be expected to choose older models. The reintroduction of state support may prompt OEMs and dealers to reconsider their discounting strategies. After the previous BEV subsidies expired in December 2023, discounts increased. In turn, this could further moderate the real purchase incentive felt by buyers. However, this may help regulate short-term pressure on BEV RVs. This is despite the powertrain likely being the most affected by the incentives. Other powertrains influenced? Autovista Group experts also project that PHEVs will see a slight RV impact. It will likely be more moderate than the effect on BEVs. This is because the technology will receive lower subsidies while holding a smaller market share. It also has a lower future oversupply risk than all-electric models. The ICE market, which includes petrol and diesel models, is forecast to see a limited but varied incentive impact. In the short term, young used ICE cars may see a slight downward pressure on RVs. This will be caused by BEVs becoming temporarily more competitive. In the medium-to-long term, structural supply shortages may appear in the used market. This could cause stable or even rising RVs for ICE models. Moreover, declining petrol and diesel registrations and tightening emissions rules could support ICE RVs structurally. Reduced model availability could also encourage this trend.

While the used-car market in Poland faces continued supply pressures, the new-car market has remained stable so far in 2025. Marcin Kardas, head of valuations at Eurotax Poland, analyses the figures with Autovista24 web editor James Roberts. So far in 2025, Poland’s used-vehicle market has seen struggles spanning both passenger cars and light-commercial vehicles (LCVs). A large supply of used models and significant discounting continues to put pressure on market values. In the used-car sector, hybrid vehicles have seen the strongest residual values (RVs), whilst battery-electric vehicles (BEVs) saw the biggest declines. In contrast, Poland’s new-car market has remained stable over the first three months of the year. By the end of March, 138,696 units were registered in the country, an increase of 2.5% from 2024, according to data from industry authority PZPM. Notably, the Polish new-car market has seen an increase in Chinese brands debuting. As well as this, the sector has not been adversely impacted by looming EU emissions regulations. However, potential shifts in policy, coupled with recently announced US tariffs, could cause disruption as the year progresses. Continued used-car struggles The used-car market continues to see a decline in values that follow a longer trend. Discounts on new prices, plus a large supply of used vehicles, continues to put pressure on market values. Coupled with this, the beginning of the year usually signals a period of high volatility. The steady decline of values in Poland, which has continued since the beginning of 2024, is one of the higher among the largest markets in Europe. Demand for used cars is currently limited. Within the Polish used-car market, vehicles aged between 31 and 90 months saw the largest drops in value. However, the prices of the youngest cars, limited in availability due to the post-COVID-19 supply constraints, and the oldest, most affordable cars on the market, are gradually stabilising. Hybrid vehicles emerged as the most resilient used powertrain, losing the least value. Alternatively BEVs saw the greatest rate of depreciation. This continues a trend witnessed throughout 2024. It is notable that the gap between the asking price and the final sale price is particularly wide for BEVs. This is largely due to low demand and a widespread lack of confidence in these vehicles on the used-car market. As a result, the resale value of BEVs remains uncompetitive compared to internal combustion-engine (ICE) vehicles, which in turn hampers the growth of BEV sales. Historically, BEVs tend to depreciate more quickly than their ICE counterparts. While the limited availability and small sample size contribute to high variability in the data, the trend of higher depreciation is clearly visible in listings. Although manufacturers are pushed to produce and sell BEVs due to Corporate Average Fuel Economy (CAFÉ) regulations, the used car market has yet to fully embrace this powertrain, further reinforcing their low RVs. New-car market stable for now For the time being, the Polish new-car market has not seen any significant impact from the CAFÉ standard. This EU-enforced regulation sets a CO2 emissions to a limit of 93.6g/km across a carmaker’s fleet. Other European markets, such as Hungary, are anticipating price rises later in 2025 as a result. ICE-powered cars remain available without restrictions in Poland. With the recently-announced transitional three-year period to meet the emission targets, importers and dealers will gain time to phase in BEVs. Meanwhile, more Chinese brands continue to appear in the Polish new-car market. These vehicles cover most segments, spanning a variety of powertrains including ICE. Adoption of Chinese models has been unexpectedly strong so far, especially among private users. This trend could be attributed to published price lists not showing the effects of the protective duties introduced last year, making these vehicles attractive to consumers. Fleets are only just beginning to show interest in these new Chinese brands. One unknown that could impact the market is the implementation of US tariffs. With production spread globally, this could pose a problem for European manufacturers. In Poland, potential exposure to increased logistical costs and reduced sales could affect new vehicle sales. Used van market under pressure New van registrations in the Polish market grew in the first quarter of 2025. This amounted to 16,127 units, a minimal increase of 1% year-on-year, according to data from PZPM. In contrast to the relative stability in the new van market, used vans are currently selling at a slow pace. At the beginning of the year, an increased decline in value can be observed in every segment of the market, from light to heavy vehicles. Models older than five years are also falling in value. This is indicative of a growing general problem with demand for close transportation and the adverse economic climate. Compared to the largest markets in Europe, Poland currently has the largest decline in the value of vans. Poland’s truck crisis continues The truck market continues to experience significant problems, with marked decline entering a third year. The sector is suffering from a widespread lack of interest in used vehicles, compounded by an elevated quarterly decline in the value of used trucks. An increased interest in eight-to 10-year-old tractors from Arabic countries has had little positive effect on the wider market picture. However, this is a normal situation at the beginning of the year. It is therefore difficult to judge whether this marks the beginning of a greater depreciation in the following months motivated by minimal demand. The market is currently facing a shortage of attractive used vehicles. However it is important to recognise that trucks purchased during the early phase of the pandemic, when new vehicle sales were heavily restricted, are only now beginning to re-enter circulation. This creates a unique dynamic of subdued demand on one side, and a limited supply of quality used stock on the other. The key to reversing this trend likely lies in an economic recovery in Germany, Poland’s primary export destination, and a bellwether for regional transport demand. Meanwhile, distribution trucks have seen a sharp and sustained drop in value. New vehicle sales data offers limited insights. This is due to the segment's relatively small share in overall truck sales. However, the steep depreciation of used vehicles strongly suggests a broader slowdown in local transport activity. Sales of new trucks are following the same trend. From the beginning of 2025 to the end of February, only 4,461 trucks were registered in Poland, a year-on-year drop of as much as 15.9%. This is comparative to a poor result at the start of 2024.