Germany's governing coalition has agreed to make build location a condition of its electric-car purchase subsidy. At a closed retreat of the CDU/CSU and SPD parliamentary leaderships in Münster on 31 August 2026, the two groups adopted a resolution paper folding local-content rules into a programme that is already paying out.
The commitment is conditional. Once the government has produced "EU-rechtskonforme und möglichst EU-weit harmonisierbare Local-Content-Kriterien" — criteria compliant with EU law and ideally harmonisable EU-wide — they go into the running programme. None exist yet; the reference point is the regime Brussels is drafting under its Industrial Accelerator Act. It is the coalition acting on a demand TeslAnt covered on 6 August, when the CSU called for the premium to be rewritten around European value creation after ministry data showed Tesla, Skoda and Renault benefiting most. Then, the coalition had agreed only to review the scheme in the autumn.
What the bonus pays today
Applications opened on 19 May 2026 and the scheme reaches back to first registrations from 1 January 2026. Around €3 billion is allocated to support roughly 800,000 cars through 2029. Grants are means-tested on the average of a household's two most recent tax assessments, and cover new M1 passenger cars only — no used cars, no price cap.
| Taxable household income | Battery-electric grant |
|---|---|
| up to €45,000 | €5,000 |
| €45,001–€60,000 | €4,000 |
| €60,001–€80,000 | €3,000 |
A further €500 per child, for up to two children, takes a battery-electric car to €6,000. The income ceiling is €80,000, rising €5,000 per child to €90,000. Plug-in hybrids and range-extenders run from €1,500 to at most €4,500, and until 30 June 2027 must emit no more than 60 g CO₂/km or cover 80 km on electricity.
What the rules do not contain today is any test of where the car was built. Every newly registered new M1 car qualifies.
Where this leaves Tesla
An assembly-location test would not simply include or exclude Tesla — it would split Tesla's own European range. Model Y for Europe comes out of Grünheide, where weekly output is set to rise around 20% to roughly 7,500 cars from October 2026, and is Made in EU by any definition. Model 3 for Europe is not: it is built at Giga Shanghai and shipped into Zeebrugge, Koper and Barcelona, one July voyage carrying 7,738 Teslas.
So it is the cheaper Tesla that is exposed. Up to €6,000 is a material share of a Model 3's price, and the version that would lose eligibility is the entry rear-wheel-drive car that just gained 38 km of official range from a tyre change. The tiering sharpens it: the largest grants go to the lowest incomes, precisely the buyer a Shanghai-built Model 3 is priced for.
This is the national version of a fight already running in Brussels, where the Commission is weighing treating British, Japanese and Korean production as European and separately pressing for European parts in Chinese-assembled cars. China appears on no trusted-partner list under discussion.
The plug-in hybrid ask
The same paper demands Brussels suspend its planned tightening of the Utility Factor next year. That factor sets how much of a plug-in hybrid's driving is assumed to run on electricity, and so how favourably PHEVs count towards CO₂ fleet targets. It was already cut once, in 2025, and the Commission's case for cutting it again is measurement: EU data on 320,000 plug-in hybrids found real-world CO₂ roughly 3.5 times the official figure.
What European buyers should watch
A faction resolution is not a regulation, no criteria have been drafted, and anyone applying now is unaffected. The wording will decide the outcome, not the headline: a test keyed to final assembly leaves a Grünheide Model Y eligible and puts a Shanghai-built Model 3 at risk, while one keyed to battery cell origin would redraw the list entirely. And because the criteria are meant to be EU-harmonisable, whatever Berlin writes is the pattern other member states are likely to copy.
Update: 2026-09-04
Reporting since publication has put figures on the criteria the Münster resolution deliberately left blank. The threshold under discussion is a minimum 70% European value-added share, measured against the vehicle price and applied to vehicle components excluding the battery. Battery cells and active cathode material would be exempt at first, but would have to be sourced from the EU or the European Economic Area from the third year onwards. That staging is the contested part: lithium, graphite and cobalt supply, and the processing of them into cathode material, are almost entirely controlled by Chinese companies including CATL and BYD, and the industry objection is that a European source for high-performance cathode material may not exist on that timetable. These remain negotiating positions rather than drafted law. Source: Table.Briefings.
Update: 2026-10-22
Environment Minister Carsten Schneider (SPD) told auto motor und sport, in an interview reported on 21 October 2026, that the purchase premium can be approved throughout 2027. Despite this year's strong demand there is enough money left in the €3 billion programme, he said, and the ministry will warn early if it is about to run out. The Made-in-EU test described above is agreed in principle: the coalition will add European value-creation criteria once rules compatible with EU law have been drafted. Schneider gave no date for that, and said no short-term changes are planned, including for electric cars built in China. He put Chinese makers' share of subsidised cars at between 9% and 17%, depending on whether joint ventures are counted as Chinese. Until the criteria exist, a Shanghai-built Model 3 qualifies on the same terms as a Grünheide Model Y. Source: ecomento.