Electric vehicles incentives in Europe

With the evolution of global regulations within the European union concerning decrease of carbon emissions, many countries provided incentives concerning electrified vehicles.

EV development in Europe in the last years

In the first half of 2024, close to a million BEVs (954.094) where sold in Europe (EU; EFTA; UK), increasing by 1.6% compared to the same period in 2023. Sales are carried by countries like France (158.402 vehicles and +14.9%), Belgium (64.404 vehicles and +47.8%), the Netherlands (60.338 vehicles and +4.1%) and Germany (184.125 vehicles).

In Germany specifically, the number of BEVs sold decreased by 16.4% compared to last year. In September 2023, Germany stopped its incentives towards electric vehicles. This created a surge in sales in the months prior due to the future disappearance of these helps. Since then, the amount of electrified vehicles sold has drastically decreased.

In other countries, the sales are stable with smaller increases and decreases.

For used car professionals, this means that more and more electric vehicles will join the global used car market in the coming years.

Main incentives available

In order to boost sales of electrified vehicles, countries in the European Union apply their own incentives and/or tax benefits using criterias like for example: the overall price of the vehicle, CO2 emissions or give a number of years of tax reduction. Some incentives can be increased in case of scrapping of an older vehicle.

The main incentives are:

• Tax benefits like VAT deduction or exemption, exemption of ownership tax, of NOX tax, of CO2 emissions tax, of road tax…
• Incentives on the purchase of electrified vehicles (BEV, PHEV) in forms of a bonus under conditions,
• Incentives on charging station purchase and installation.

Some of these incentives are also available when purchasing a used electric vehicle in certain countries like Belgium, France, Lithuania, Netherlands and Iceland.

In Greece, there is a 30% cashback on the net retail price (NRP) for BEVs, with a maximum cashback of €8,000. An extra €1,000 is given if a car of more than 10 years is scrapped, or the buyer is less than 29 years old.

In Luxembourg, incentives depend on the size of the battery (more or less than 18kwh).

In France, the bonus on the purchase of an electric vehicle is conditioned partially to the revenue of the buyers (higher for lower incomes).

These incentives are often limited in time, which means that they can increase or disappear from one year to another depending mainly on chosen politics inside countries.

Conclusion

All these incentives provide help to companies and individuals looking to purchase an electrified vehicle. They help increasing overall sales and thus, future stock on the used car market.

However, experience has shown that without these incentives, electric vehicles sales decrease and thus reduce the future number of EVs available later on the used car market.

Source: Tax benefits and incentives, ACEA, 2024