Electric Vehicles

Policies by Country

By Simon Johns - Sep 29, 2023

Almost all EU member states, as well as several non-members on the continent, have some kind of EV incentive policy in place, from tax breaks and purchase grants to fee waivers and scrappage schemes. But they vary widely from country to country.

Austria’s government exempts EVs from fuel consumption and pollution tax, ownership tax and company car tax, plus lower VAT on zero-emission cars. Until the end of 2020, there is a bonus for the purchase of cars and vans with a fully electric range of 50 km and a gross market price of €60,000 or less. In 2020, it upped its purchase bonus from €3,000 to €5,000 for BEVs and fuel cell EVs, and €1,250 can be gleaned for plug-in hybrids and extended-range EVs. Austria also provides €600 for home charging stations and €1,800 for charging stations in multi-occupancy buildings.

In Belgium, EVs boast the lowest annual ownership tax (€74 as opposed to €1,900) in all three provinces, and the expense tax deductible for companies is 100% for BEVs and 100% for vehicles emitting less than 42 g/km of CO2.

Those who want to buy an EV in Croatia enjoy exemption from excise duties and environmental taxes for EVs, as well as incentives worth €9,200 for BEVs and €4,600 for PHEVs from a fund worth €5.8 million for commercial and private purchasers. The scheme, which came into effect in July 2020, proved so popular that the online application system crashed after 20 minutes of coming online.

Denmark passed a deal at the end of 2020 to secure financing to put at least 775,000 EVs on the road by 2030. Taxes on cars using fossil fuels will gradually increase, while taxes on new cars will scale based on the carbon dioxide they emit. The government will set aside approximately €335 million to fund the deal. Denmark also offers tax reductions on electricity used to power commercial EV charging stations.

At the end of 2019, Estonia’s parliament introduced a bill that gives companies (limited to 15 vehicles) and individuals a grant of up to €5,000 to buy a BEV car or van that costs no more than €50,000, excluding VAT. There are some conditions, though: The vehicle must be driven at least 80,000 kilometers within four years, mostly in Estonia, be bought from an Estonian Vehicle Dealers and Services Association-certified dealer and go at least 60 km per hour.

Until 2021, buyers in Finland get €2,000 per households to buy or lease a BEV worth up to €50,000. These vehicles are taxed at the minimum rate. The Finnish government also provides subsidies for charging infrastructure: a 35% refund of total purchase and installation cost of commercial charging infrastructure and a 35% refund, up to €90,000, of the purchase and installation for residential charging infrastructure, plus a tax return of €300 for such installations.

France’s bonus-malus system puts a surcharge on vehicles with the highest CO2 emissions, with over €10,000 being charged for the highest-emissions vehicles, thus creating an EV purchase incentive. An EV then earns an “eco-bonus” of up to €5,000, which cannot surpass 27% of the car’s value. There is also a scrappage bonus of up to €2,500 for ICE vehicles. This results in a total of €7,500 of incentives available to private EV buyers.

French President Emmanuel Macron announced an €8 billion plan to rejuvenate the country’s struggling auto industry. He included in the plan increased incentives to buy EVs and an ambition to become a leader in zero-emission vehicle manufacturing.

Greece’s prime minister proposed a €100 million package of incentives in June 2020 that includes purchase subsidies worth 15% of the cost of a private passenger and light commercial BEV or PHEV up to a limit of €5,500, 20% for a two-wheelers up to €800 and 25% for taxis up to €8,000, as well as road tax exemption and free parking. They are also offering a scrappage bonus of €2,500 and tax-free charging. The benefit for a single car could be as much as €10,000.

As of June 2020, BEVs and PHEV owners in Hungary get €7,350 for EVs with a gross price of up to €32,000 or €1,500 for vehicles with a cost in the range of €32,000 to €44,000. They also pay no registration tax, circulation tax or company car tax.

Iceland’s EV market is going full steam ahead. It is second to Norway in the ratio of EV to ICE vehicle sales in Europe, with 19% of sales. The government exempts plug-in EVs from import duties, which are between zero and 65% depending on the vehicle’s CO2 emission level, and they get free parking in the center of Reykjavik. EVs are also exempt from VAT up to approximately €40,000, with standard rate applied for the remainder of the price.

At 1.5% of all vehicles on the road in 2019, Ireland’s EV fleet is modest, but its ambitions are grand; the country hopes that EVs will make up 10% of the car parc by the end of 2020. The country also hopes to end the sales of cars powered only by fossil fuels by 2030. Privately purchased EVs costing at least €14,000 get a purchase subsidy up to €5,000 and a domestic charging point subsidy of €2,000. They also enjoy the lowest road tax of €120, and companies can write off 100% of the purchase price of EVs and PHEVs.

Italy employs a bonus-malus system in which EV buyers can receive a cash bonus of up to €6,000 for vehicles that emit less than 70 g/kg CO2 and cost less than €50,000.

Liechtenstein offers approximately €2,700 for the purchase of EVs that cost at least €18,279.

EV and fuel-cell cars in Luxembourg get a €5,000 credit on their tax returns as well as the lowest benefit-in-kind tax for company cars. EV owners also pay the lowest annual circulation tax rate.

Malta offers various subsidies: €7,000 for new EVs while scrapping an ICE vehicle at least 10 years old; €6,000 for new EVs without scrapping an ICE vehicle; €2,000 for the purchase of a previously owned EV less than 3 years old and 15,000 kilometers on the odometer without scrapping an ICE vehicle; and 25%, capped at €6,000, off the purchase of an electric quadricycle or motorcycle. Other tax and registration benefits are also provided.

Monaco offers drivers up to $12,600 to buy a BEV or PHEV, which can then park free in public parking spots.

Drivers in the Netherlands enjoy no registration taxes for BEVs, as these taxes are based on CO2 emissions. For drivers of company cars who use their vehicles privately, only 8% of the car’s value is included in that person’s income tax, which beats the rate of 22% for ICE vehicles. The scheme applies to vehicles priced up to €45,000. PHEVs no longer qualify for tax relief.

In Norway, BEVs and fuel-cell vehicles are exempt from import taxes and the 25% value-added tax on motorized vehicles, which is otherwise tacked on to a vehicle’s value after customs and import taxes are applied. Because of this tax break, the Norwegian market is one of the few globally where there is almost price parity between an EV and ICE vehicle of a comparable size. Other perks include limited use of bus lanes in certain areas, as well as discounts on ferry fees, tolls and parking costs. 

The EU’s 2021-27 budget contains a proposal to spend 60% of the €42.3 billion infrastructure fund on projects that contribute to reversing climate change, such as EV charging infrastructure. The EU is also committed to decarbonizing transport, so European carmakers can expect ever more stringent emissions targets.

In Poland, BEVs and PHEVs up to 2,000 cc are exempt from purchase tax until the end of 2020 and get $10,156 for BEVs worth up to $33,853, and $24,374 for fuel-cell EVs costing up to $81,249 until the end of 2027.

Motorists in Portugal are aided by €3 million in EV purchase subsidies for private citizens worth €3,000 per vehicle, while company EVs are exempt from motor vehicle tax and single road tax. The government is also investing in charging infrastructure.

Romania offer a BEV purchase incentive up to €10,000, €4,250 for a PHEV and an extra €1,250 for scrapping a vehicle more than eight years old. It is the most generous in Europe, if not globally. Electric and hybrid vehicles are exempt from registration tax and an emissions-based tax reduction is also in place.

BEVs in Slovakia are subject to the lowest registration tax rate and no motor vehicle tax, while hybrids and CNG cars get 50% off.

Like Romania, Slovenia is also generous to EV buyers. Its sliding-scale incentive scheme offers €7,500 for BEV cars, €4,500 for vans and heavy quadricycles, €4,500 for PHEV cars, vans and EREVs, and €3,000 for light BEV quadricycles. BEVs also pay the lowest tax rate among vehicles.

Spain earmarked €45 million in purchase grants of €4,000 to €5,000 for BEVs and €1,900 to €2,600 for PHEVs, dependent on whether a vehicle seven years or older is being scrapped. Electric vans and trucks are eligible for grants from €4,400 to €6,000, also dependent on scrapping of older vehicles. There is also no registration tax for BEVs.

Starting mid-2018, Sweden offered a €5,700 bonus on purchases of electric cars, light trucks and buses, but the incentive cannot exceed 25% of the vehicle’s value. The incentive for companies purchasing an eligible vehicle cannot exceed 40% of the difference between the prices of a new EV and a similar ICE vehicle. Bonuses are paid directly to vehicle owners six months after registration, a protocol designed to prevent the vehicle from being sold during that time period. The bonus is decreased by $87 for each gram of CO2 emitted by the car for up to 60 g/km.

Certain zero- and low-emissions vehicles in Bulgaria, CyprusLatvia, Lithuania, Switzerland and Turkey are variously exempt from or have reduced duties, fees and road taxes. None has purchase incentives, per se.

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