"People are moving away from gasoline and diesel," said Jens Boysen-Hogrefe, a tax and transportation expert at the Kiel Institute for the World Economy (IfW). "The boom in electric cars triggered by high fuel prices is accelerating the transition in drive technologies that was already planned anyway," he told DW. According to the International Energy Agency (IEA), sales of electric vehicles in Europe rose by nearly 30% in the first quarter of this year compared to the same period last year.
Norway is leading the way, with electric cars accounting for as many as 95% of all newly registered passenger cars in the country. The agency's "Global EV Outlook 2026" reveals that EV growth rates in Asia-Pacific countries, excluding China, were even more remarkable, with sales in some regions rising by up to 80%. In Latin America, that figure was around 75%.
In Berlin, however, the boom in electric mobility has not been met with universal enthusiasm. That's particularly the case at the Ministry of Finance, as charging an electric car does not incur energy taxes, but only minimal electricity taxes. Currently, a liter of diesel in Germany is taxed at 47.04 cents, and a liter of gasoline at 65.45 cents.
On top of that, there is a carbon levy and a 19% value-added tax. With gasoline priced at €2.10 per liter, taxes account for €1.14 of the total, meaning more than half of the pump price goes to the government, according to the ADAC motoring club. The current fossil-fuel-based system, with its energy taxes, truck tolls and CO2 tax, is very lucrative for the government, said Boysen-Hogrefe.
"The finance minister doesn't benefit much when people drive electric cars," he noted. "Quite the opposite." "If the shift to electric cars takes place and nothing changes in the tax system, the road system will become a money-losing venture for the federal government," the tax expert underscored, predicting billions of euros in losses. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video According to the Federal Statistical Office, revenue from the energy tax on diesel and gasoline fell from €37 billion ($43 billion) in 2016 to €33 billion ($38 billion) last year.
In 2022, a report by the scientific advisory committee to the German Transport Ministry projected that revenue from the energy tax would drop to as low as €5 billion by 2050. "The transition to electric vehicles has fiscal implications that have hardly been discussed so far," the report states. The expected tax shortfalls add to the costly subsidies for electric vehicles that are currently still necessary to drive the transition forward, it added.
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