Less than 3,000 electric vehicles were sold in Germany last year, far behind targets of one million to be on the roads by 2020 set by Chancellor Angela Merkel. Until now, company car drivers have been taxed 1% of a vehicle’s gross list price to use a vehicle for private use, putting the usually more expensive electric models at a tax disadvantage.

From 1st January 2014, private users will be able to offset the list price at €500 per kilowatt hour of battery size, up to the value of €10,000, and is applicable to battery electric and plug-in hybrids. The amount which can be offset shrinks annually by €50.