Electric car incentives: what's happening in Europe?

As Europe gradually decarbonizes its energy supply, it is banking heavily on electric cars. Many national governments are using incentives to accelerate the transition from fossil fuels to electric cars, with the goal of completely eliminating the production of combustion engine vehicles by 2035. Here's what's happening on the Old Continent.

United Kingdom

Ofgem, the energy regulator, is considering making electric vehicle sales more attractive to consumers by allowing drivers to sell the electricity stored in their car batteries to the grid when demand is at its peak. Ofgem is optimistic that if enough new EV drivers participate in this program, the energy sales could generate revenue and allow the UK to avoid developing new power plants by providing the same amount of electricity generation as up to 10 nuclear power plants. More than 535,000 electric vehicles, including hybrid cars, are currently on British roads. This number is expected to reach 14 million by 2030.

Germany

Germany recently announced that it will extend subsidies for existing electric vehicles until 2025, after they were originally scheduled to end in 2021.
During 2020, incentives for electric vehicles were doubled, offering a €3,000 bonus for fully electric vehicles and €2,250 for hybrids, as well as a 10-year tax exemption and reduced VAT rates. Some European manufacturers are offering buyers an additional €3,000 bonus. Germany represents the largest market for electric vehicles in Europe: in 2019, they accounted for approximately 1.8% of all new passenger car registrations, a figure that has been increasing year after year. According to AutoNews, brands such as Smart, Seat, Mini, and BMW saw significant gains over the past year, increasing electric vehicle sales by 37%.

France

France has also joined the list of European countries offering incentives for electric vehicles, offering domestic manufacturers, such as Renault, a package of support measures aimed at encouraging production in this sector. The French government also offers consumers CO2 tax exemptions, subsidies of up to €7,000, and a scrappage program for old conventionally powered cars.

Spain

Similarly, Spain has reduced taxes on electric vehicles in major cities, while offering subsidies of €4,000 to €5,000 for scrapping old vehicles.

Italy

After achieving great success in 2020, the state incentives for cars were confirmed also for 2021 and on October 15, a new tranche of incentives equal to 65 million euros was announced, intended for the purchase of cars with emissions between 0 and 60 g/km of CO2, plus 10 million euros for the purchase of cars with emissions between 61 and 135 g/km of CO2, useful to allow the svecchiamento of the fleet in circulation. The eco-bonus, which will have a maximum amount of 6,000 euros, can be reserved until December 31, 2021, for applications made between January 1 and June 30, 2021. However, with the infrastructure decree, for applications made between July 1 and December 31, 2021, reservations will be authorized until June 30, 2022.