Germany’s curbing of its subsidy spending is indicative of a pan-European development. In 2020, the European Automobile Manufacturers Association (ACEA) identified 20 national purchase subsidy programmes still in place in the EU, and the number continues to fall. Budget cuts or the achievement of specified market targets are often cited as reasons for restricting or terminating incentives.
In France, for example, the subsidy is set to reduce from €6,000 to €5,000, and plug-in hybrids will no longer qualify. In the Netherlands, the subsidy will gradually decrease until 2025. However, demand here regularly exceeds the annual budget so much that the bonuses are only available for a few months. Italy and Spain, on the other hand, are retaining the existing BEV and PHEV subsidies – and are offering additional scrappage bonuses. The biggest cuts in financial support will be seen in the UK and Sweden. From 2023, fully and partly electric-powered vehicles will no longer receive any bonus at all (in Sweden this has been the case since last November).
The situation is slightly different in Norway, which has so far completely exempted new electric vehicle purchases from VAT. This is now changing, but only above a certain net purchase price: in the new year, vehicles that cost kr500,000 or more – approximately €50,000 – will be subject to at VAT rate of 25% levied on the full price of the vehicle.
Germany also offers tax relief, but for the private use of an electric company car. Here, electric vehicles that are registered for the first time by 31 December 2025 at the latest are exempt from motor vehicle tax until 31 December 2030. Electric vehicles and plug-in hybrids used as company cars are also favoured through special provisions for non-cash benefits.
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