Germany's coalition government has approved tax reductions aimed at promoting electric vehicle (EV) adoption as new registrations plummeted by 36.8% in July year-on-year. The proposed measures include allowing companies to deduct up to 40% of the cost of newly purchased electric vehicles from their taxes in the first year, decreasing to 6% by the sixth year, with an estimated cost of €465 million annually from 2024 to 2028. Additionally, the threshold for preferential tax treatment on company cars has been raised from €70,000 to €95,000, making more models eligible. Economy Minister Robert Habeck emphasized the necessity of supporting the automotive sector amid rising competition from Chinese manufacturers, as Volkswagen faces potential plant closures. Critics have raised concerns that these tax benefits may primarily benefit higher-income earners. The government aims to revitalize the struggling EV market and ensure the future competitiveness of German automakers.