The company car regulation allows German employees to use a car privately at favourable conditions. However, since company cars are often internal combustion vehicles, the Greens want to reform the regulation.
The Greens want company cars to no longer be tax-privileged. Now it is the case that company cars benefit both employees and employers. The employee or worker gets a cheap car also for private use, the employers take care of repair and maintenance and can deduct these vehicles from their taxes. At the same time, the scheme ensures that the used car market is constantly replenished, making cheap used cars affordable for many in the first place. In addition, the scheme is an important factor for innovation.
Critics, however, see it as an environmentally harmful regulation, because the most popular cars are premium burners. In fact, 38 percent of new registrations of the premium brands of BMW, Mercedes and Audi are company registrations. If the tax advantage were to be removed, many employees would probably buy smaller, more fuel-efficient cars privately, which would have a positive effect on air quality. However, the abolition of the company car regulation would have a particularly negative impact on the manufacturers of luxury and upper middle class cars, as 86 percent of these cars are registered to commercial owners.
With the proposed abolition of tax benefits, the Greens want to kill two birds with one stone: promote environmental protection and finance a successor to the 9-Euro-Ticket. In order not to hit those employees who actually do not have the money for their own car, the Greens now propose to tax company cars with higher pollutant emissions at a higher rate. But the Federal Ministry of Finance is waving it off, since hybrid and electric cars are already subsidised. Other cars are not subsidised, so no additional revenue can be expected that can actually be used to finance a cheap monthly ticket for public transport.
The president of the German Association of the Automotive Industry criticises above all the effects on the used car market. Without the company car scheme, far fewer cheap e-cars will enter the market and the goal of putting 15 million of these vehicles on the roads will be missed. This ensures more old combustion cars on the roads, worse air and stricter environmental zones.