Electric Company Cars: Why the 0.25% Rule Is Transforming Fleets
6 min read
An electric company car with a 60,000 euro gross list price costs the employee 150 euros in taxable benefit per month under the 0.25% rule. The comparable combustion car costs 600 euros. Since mid-2025 the rule applies up to a 100,000 euro gross list price and runs until the end of 2030. For fleet managers and HR directors in the Mittelstand, this is the strongest tax lever to embed e-mobility in the fleet. Companies that fail to reflect the rule in their Car Policy leave money on the table and pass the bill to employees.
Key Points at a Glance
- A Quarter Instead of the Full Amount. For electric cars up to a 100,000 euro gross list price, the taxable benefit is 0.25 percent per month, not 1 percent as with combustion cars.
- Limit Raised Since July 2025. Previously the threshold was 70,000 euros. The tax investment program raised it to 100,000 euros.
- Term Runs Until 2030. The rule applies to vehicles acquired or provided by December 31, 2030.
- Example Calculation. At an 80,000 euro gross list price, this means 200 euros instead of 800 euros in taxable benefit per month.
Related:Home Charging for Electric Company Cars: Why the Flat Rate Ends in 2026 / Investment Backlog: How AI Unlocks Hidden Budgets
What the 0.25% Rule Exactly Regulates
Anyone who also uses a company car privately must tax the taxable benefit. For combustion cars this amounts to 1 percent of the gross list price per month; for electric cars up to the price limit it is one quarter of that, i.e. 0.25 percent. The regulation is set out in § 6 para. 1 no. 4 of the Income Tax Act and applies to all employees with company car privileges, regardless of company size.
The tax investment program raised the upper limit in summer 2025 from 70,000 to 100,000 euros gross list price. This brings significantly more market-available electric models into the benefit corridor. The reference price is the gross list price at the time of first registration. Discounts, rebates or used-car deductions change nothing.
The rule runs until December 31, 2030. Anyone who acquires or provides an electric car by then benefits for the entire period of use. Separate conditions with CO2-tiered rates apply to plug-in hybrids, which can fall into the 0.5 or 1 percent rule at higher emissions.
Three Price Examples for the Car Policy
The amount of tax savings depends on the gross list price. Three examples show the range for typical Mittelstand fleets.
| Gross List Price | Combustion Car (1%) | Electric Car (0.25%) | Savings / Month |
|---|---|---|---|
| 40.000 € | 400 € | 100 € | 300 € |
| 60.000 € | 600 € | 150 € | 450 € |
| 80.000 € | 800 € | 200 € | 600 € |
| 100.000 € | 1.000 € | 250 € | 750 € |
Source: EStG § 6 para. 1 no. 4. Monthly values, taxable benefit excluding commute portion.
Anyone who also drives commute distances benefits twice. The commute portion for electric cars is also reduced to 0.03 percent of the gross list price per one-way kilometer. At 30 kilometers one way and an 80,000 euro gross list price, this amounts to 720 euros per month instead of 2,400 euros for the combustion car. The combination of both levers makes the electric company car particularly attractive for employees with a commute.
Why the Car Policy Is the Lever
Tax law provides the framework. It is implemented in the Car Policy. Anyone whose policy only states “company cars subject to management approval” without rules on drive type, price range and allocation conditions leaves the biggest lever unused. Employees then choose what is available at short notice, not what is tax-optimal.
Three points belong in a modern Car Policy. First, the decision whether electric cars are preferred or mandatory in the selection. Second, price ranges relative to gross list price so the 0.25% limit can be utilized in a planned way. Third, clarification of who bears charging costs, electricity verification and maintenance. With the home charging flat rate expiring on January 1, 2026, the third point is open anyway.
Coordinating the Car Policy with the leasing provider often yields model proposals that fall precisely into the benefit corridor. Leasing companies know the 100,000 euro gross list price limit and can steer fleet churn so the tax privilege applies consistently.
What Lies Ahead Until 2030
The term until the end of 2030 provides planning certainty. Anyone signing a four-year lease today will complete it within the benefit window. Those driving longer must keep in mind that political majorities can shift. An extension beyond 2030 is not committed to, but industry observers do not expect an abrupt end.
Two developments are relevant for 2026 and 2027. First, the EU CO2 fleet limits, which are pressuring manufacturers to expand their electric model range. This increases choice within the benefit corridor. Second, residual value trends. Anyone leasing an electric company car today should review the contractually agreed residual value. High residual values lower the monthly rate but do not qualify for the tax benefit.
For the Mittelstand this means: the 0.25% rule is not a nice-to-have in the Car Policy but a hard cost factor. A fleet of 20 company cars switched to electric models up to 80,000 euros gross list price saves several thousand euros per month in taxed taxable benefit across all employees. The money stays with the workforce, not with the tax authorities.
Frequently Asked Questions
Does the 0.25% Rule Also Apply to Plug-in Hybrids?
Plug-in hybrids benefit on a tiered basis. Up to 50 grams of CO2 per kilometer and at least 60 kilometers of electric range, the 0.25% rule applies. Above that, higher rates apply. Pure electric cars are the more reliable choice for the full benefit.
What Happens After 2030?
The regulation is limited until December 31, 2030. An extension has not been politically committed. Anyone who acquires or provides by then secures the benefit for the entire service life of the vehicle.
Do Discounts Reduce the Gross List Price?
No. The gross list price at the time of first registration is decisive. Price reductions, discounts or used-car deductions change nothing. This is a common stumbling block with lease rates based on net purchase prices.
How Does the Commute Portion Affect It?
The commute portion for electric cars is reduced to 0.03 percent of the gross list price per one-way kilometer. For high commute distances, this is a second strong lever alongside the 0.25% rule.
What Must Appear on the Payroll Statement?
The payroll must correctly show the taxable benefit under the quarter rule. This requires the correct drive type, the correct gross list price and the term of provision. A properly maintained logbook eases the burden on accounting.
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Image source: AI-generated (July 2026)
