AfD voters generally divide into two groups, those who actually support the AfD’s goals and those who vote AfD to spite the other parties. In the 2017 federal elections, the AfD’s 13% were apparently approximately 5% true-blue AfD supporters and approximately 8% protest voters.
The AfD should not be underestimated but the implication that almost every fifth German voter is now a neo-Nazi is probably overblown, too. The main observation one can make is that most AfD politicians are full of hot air, and the best strategy would be to attack them on the political level and expose them as the windbags that they are. Unfortunately many politicians here still seem to think it is best to pretend the AfD doesn’t really exist, and that is probably not a good idea.