Enterprise EVs in Germany: A Future Perspective

In an era where sustainability and innovation are at the forefront, the landscape of corporate vehicles is increasingly changing. Electric cars are taking a leading role in this transformation. This article highlights the financial and tax benefits associated with the use of electric vehicles as company cars, and examines the challenges and future trends in this rapidly evolving sector.

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1. Tax Benefits and Monetary Advantage

Using electric cars as company vehicles offers significant tax advantages compared to conventional combustion vehicles. The tax treatment is based on the monetary advantage that arises from the private use of the company car.

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Advantages Over Combustion Vehicles

Employers who provide electric cars as company vehicles can benefit from substantial tax advantages. Compared to combustion vehicles, where the monetary advantage often amounts to 1% of the gross list price per month, the use of electric vehicles offers a significant reduction.

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• Electric Vehicles Up to 60,000 Euros Gross List Price: The monetary advantage is estimated at only 0.25% of the gross list price per month.
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• Electric Vehicles Over 60,000 Euros Gross List Price: For more expensive electric cars, the monetary advantage rises to 0.5% of the gross list price but remains cheaper than that for combustion engines.
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Climate Protection Initiative for Small and Medium-Sized Enterprises

The KfW supports small and medium-sized enterprises in transitioning to electromobility through attractive funding programs. The "Investment Credit for Sustainable Mobility" and the "Climate Protection Initiative for Small and Medium-Sized Enterprises" offer low-interest loans for the purchase of electric vehicles and the establishment of charging infrastructures. These programs are central to the financial feasibility of investments in sustainable mobility.

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2. Tax Risks in Price Increases

The introduction of electric and plug-in hybrid vehicles as company cars carries specific risks, especially in terms of market price fluctuations and long delivery times. These factors can have unexpected impacts on the tax burden.

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• Issue of Long Delivery Times: With long delivery times and subsequent price increases by the manufacturer, the gross list price can exceed the mark of 60,000 euros, leading to a higher monetary advantage and, consequently, an increased tax burden.
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• Taxation of Plug-in Hybrids: Plug-in hybrid vehicles enjoy special tax benefits. They are taxed at 0.5% of the gross list price, provided they achieve a certain minimum electric range or exhibit particularly low CO₂ emissions.
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• Logbook Method as an Alternative: Instead of the flat-rate taxation of the monetary advantage, companies can also use the logbook method. This option can offer tax advantages, especially for electric vehicles that are predominantly used for business purposes.
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3. Business Use and Accounting

The integration of electric cars into corporate fleets brings not only ecological benefits but also specific challenges in business use and accounting. Particularly, aspects of private use, charging cost accounting, and tax treatment require careful consideration.
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Private Use and Logbook

• Choice of Taxation Method: For taxing the private use of a company car, there are two methods available: The logbook method and the flat-rate 1% rule.
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• Advantages of the Logbook Method: With this method, the private usage portion is calculated based on the actual kilometers driven. This can lead to a lower tax burden, especially for electric cars, which are often more efficient in operation.
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• 1% Rule for Electric Cars: For electric vehicles, this flat-rate taxation is often more favorable, as the monetary advantage is set lower than for combustion engines.

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Home Charging Cost Accounting

• Accounting Methods: In addition to installing a wallbox with a separate meter, companies can also use special accounting systems that accurately capture the electricity consumption for charging the company car.
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• Tax Aspects: Correct recording and accounting of charging costs are crucial for tax deductibility. It's important that the energy used can be clearly attributed to the operation of the company car.
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Flat Rate for Charging Costs

• Simplicity and Transparency: A monthly flat rate for charging electricity costs provides a simple and transparent solution for both companies and employees.
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• Tax Exemption Limits: Up to a certain amount, these flat rates can be made tax-free, simplifying administration and reducing the tax burden for the employee.
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4. How Does the Electric Company Car Become a Reality?

The attractiveness of electric vehicles for businesses lies not just in their contribution to emission reduction and ecological sustainability, but also in the significant financial incentives associated with their operation. However, companies must meet certain requirements to fully benefit from these advantages:
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• Business Use: The vehicle must be used for business purposes at least 10% of the time.
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• Tax Deductibility: For tax deductibility, it's important that the acquisition and operating costs are correctly documented.
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• Eligibility for Subsidies: The vehicle's eligibility for subsidies must be assessed, as different models may meet different subsidy criteria.
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• Charging Infrastructure: The installation of suitable charging infrastructure at the company's location may be required.
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• Environmental Benefits: To achieve maximum benefits, the vehicle should predominantly be charged with electricity from renewable energy sources.
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Careful consideration of these criteria enables companies to derive the greatest possible benefit from the acquisition of electric vehicles as company cars while simultaneously making a positive contribution to environmental protection.

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5. Future Perspectives and Trends

With growing awareness of environmental issues and the increased necessity to promote sustainable practices, more and more companies are turning to electromobility. This trend is further accelerated by technological advancements leading to improved range and faster charging times, as well as by an increasingly sophisticated charging infrastructure. In addition, government incentives and the rising availability of various electric car models are facilitating the transition. Future developments may also include a greater diversification in vehicle types, ranging from small city cars to heavy commercial vehicles, making electric cars attractive for a broader range of business applications. Overall, the increasing share of electric cars in corporate fleets reflects a growing commitment to innovation and environmental responsibility, which is likely to continue expanding in the coming years.

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Conclusion

Electric cars as company vehicles represent a forward-looking solution that offers both ecological and economic benefits. The lower tax burdens and support from government subsidy programs make them an attractive option for businesses. At the same time, integrating this technology into corporate fleets requires careful planning and adaptation to changing conditions. Looking to the future, the importance of electric vehicles in the corporate world is expected to continue to grow, accelerating the move towards sustainable mobility.

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FAQs

How does the use of electric cars as company vehicles affect taxes?

Electric vehicles offer significant tax advantages, particularly through a reduced monetary advantage compared to combustion vehicles.

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What happens with price increases during long delivery times?

Price increases can cause the gross list price to exceed the threshold of 60,000 euros, leading to increased tax burdens due to a higher monetary advantage.

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What are the accounting methods for charging costs of company electric cars?

Companies can install a wallbox with a separate meter or offer a monthly flat rate for charging electricity costs to account for charging costs transparently and efficiently.

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What requirements must be met for the acquisition of an electric company car?

Companies must ensure that the vehicle is predominantly used for business purposes and should correctly document the acquisition and operating costs to maximize eligibility for subsidies and tax benefits.

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How will electric cars as company vehicles develop in the future?

The demand for electric vehicles in corporate fleets is expected to continue to rise due to technological advancements, improved charging infrastructure, and growing environmental awareness.