Germany boosts e-bus subsidies, but public transport digitalisation lags behind, VDV urges

The German federal budget for 2025 includes higher funding for municipal transport infrastructure and electric buses, but support for digitalisation projects remains limited, according to the VDV, the German association of public transport companies.

The German Federal Ministry for Transport (BMV) had indeed announced in June 2025 a new funding round to support public transport operators across the country in transitioning their bus fleets to zero emission technology. The call is open to battery-electric and hydrogen-powered (fuel cell) buses, including the necessary infrastructure and which is worth mentioning, retrofitting of conventional buses.

VDV on the funding for digitalization

Making a few steps back, Germany’s federal funding program for alternative drive systems in public buses, launched in 2021, has already supported the procurement of around 3,500 zero emission emission buses. However, in early 2024, the funding program was halted, with concerns arising on the development of the zero emission bus market in the country.

Back to today, Ingo Wortmann, VDV President, welcomed the increase in funds, while urging the government to maintain momentum on modernisation and digitalisation. “‘We can see a strong will to take decisive action in numerous areas, such as the increase in funding for municipal transport infrastructure and the electrification of bus fleets, and we welcome the courage to make these decisions. At the same time, this path must continue beyond this year into the future – and important areas for the future, such as digitalisation and modernisation, must not be neglected“. Wortmann said.

A central element of the budget is the GVFG (Gemeindeverkehrsfinanzierungsgesetz) programme, which provides federal support for municipal transport infrastructure. Originally decided in 2020, GVFG funding will rise to two billion euros from 2025, supporting the renewal and expansion of light rail networks and non-federally owned railways. Wortmann called this an important step but urged the government to modernise the programme further and increase funding beyond the planned levels.

The budget also includes additional support for electric buses and related infrastructure. After last year’s funding pause, the federal subsidy programme for alternative-drive buses will receive around 350 million euros from 2027 onwards, allowing new approvals. Wortmann highlighted that “while the programme has helped around 12% of German public transport buses adopt clean drive systems, the increase is still insufficient to cover the full cost of fleet electrification.”This programme has contributed significantly to the fact that around twelve per cent of public transport buses in Germany now use alternative drive systems and comply with the requirements of the Clean Vehicles Directive. However, the increase in funding is far too small to cover the actual costs of switching to clean drive systems”

In contrast, digitalisation of public transport systems remains underfunded. Only 50 million euros are earmarked for 2025, with no new projects approved. Wortmann stressed that municipal transport operators have implemented numerous projects in recent years—ranging from intelligent transport systems to digital ticketing platforms—and called for significantly higher support in the future.

The 2025 budget draft will go before the Bundestag plenary session from 15 to 19 September for approval.