As Member States share competences with the European Union (EU) (EU countries exercise their own competence where the EU does not exercise, or has decided not to exercise its own competence) in electric mobility sector, the local, regional and national authorities in EU Member States tries to offer various incentives to encourage the purchase and use of electric vehicles (EV). Some of these incentives are not limited to passenger cars but also include other road vehicles such as vans, buses, bicycles and motorcycles.

Despite a significant increase in recent years, alternatively - powered passenger cars make up only 3.8% of the total EU car fleet: 0.7% of all cars on EU roads are hybrid electric vehicles, 0.2% are battery electric (BEV) and plug-in hybrids (PHEV) account for only 0.1% of the total.

In accordance with the available sources1, the leading EU Member States having the highest number of electric vehicles (EV) per capita and the highest EV numbers in total are France, Germany and the Netherlands. Although Norway is not EU member, it is the global leader in terms of EV market share, therefore, the EV's regulation in Norway and its example of success in this sector will be described, as it led Norway to its global No 1 position. This article provides the review regarding EV policies and incentives of the above-mentioned countries, which have the highest EV per capita.

Norway is the global leader in electro-mobility. As of May 2018, there are 230.000 registered BEVs in Norway and battery electric and plug-in hybrid vehicles together hold a 50% market share. It was succeeded due to a substantial package of incentives developed to promote zero-emission vehicles into the market, which have been gradually introduced since the early 1990s. Furthermore, the Norwegian parliament has agreed upon a 2025 target for all new passenger and light commercial cars to be zero or low emissions vehicles (electric or hydrogen).

Norway with the largest market penetration of EV has also the lowest electricity rate (0.15 EUR/kWh)2 and the highest gasoline prices between the analysed countries. France and the Netherlands have similar electricity rates and all other analysed countries are in the top third of European countries with the highest gasoline prices. Moreover, it is worth to mention that around 96% of electric car owners in Norway have access to a charging station in their own home or apartment.

Currently, Norway allows the installation of charging points in existing buildings without the consent of the housing unit board. Many new apartment buildings already provide charging points for all parking spaces, even without regulatory mandates as the availability of a charging point increases the value of the parking garage.

In the table below, there is the information about the incentives and policies applied in Norway. However, after 2021 the incentives will be revised and adjusted parallel with the market developments.

Direct consumer incentives

Tax benefits:

  • VAT: EVs are exempt from 25% VAT on purchase.
  • Registration tax: BEVs are exempt; PHEVs are eligible for a reduction of up to EUR 10,000.
  • Road tax: Reduced for EVs to EUR 45 annually (normal rate is at least EUR 280 for petrol or diesel cars).
  • Company car tax: The basis for the company car tax is the vehicle's full purchase price, which is reduced to 60% for EVs.

Local incentives

  • Some cities provide funding for normal charging stations in shared apartment buildings, parking garages, malls, etc.

Charging infrastructure incentives (public and private)

  • Governmental programme to finance the deployment of at least two fast charging stations every 50km on all main roads in Norway by 2017.

Complementary policies

  • No charges on toll roads or ferries.
  • Free municipal parking.
  • Access to bus lanes.

Germany

In June 2015, Germany introduced its Elektromobilitätsgesetz (Federal Electro-mobility Regulation) as an important part of national energy and climate policies. With the introduction of this regulation, municipalities can grant special privileges to low emissions vehicles, defined as vehicles that do not exceed 50g CO2/km or have an electric range of 40km or more. Special privileges include preferential or free parking, access to bus lanes, and entry to restricted traffic zones. The regulation is intended to enable the unhindered use of electric vehicles across operators, municipalities and countries.

The regulation determines that the charge point operators are obliged to inform the authority at least 4 weeks in advance for the construction of a new charging station and immediately after a new charging station has been put into operation. They also have to prove that they meet the technical requirements by sharing the relevant documents, at least at the construction of a new charging station and at any moment that this is requested by the authority.

Information about the incentives and policies applied in Germany:

Direct consumer incentives

Bonus payments & premiums:

  • BEVs get EUR 4,000 and PHEVs get EUR 6,000, given that 50% of the grant is paid by the automakers.
  • Low interest loans for company EVs.

Tax benefits:

  • Road tax: EVs registered until December 2015 are exempt for the first 10 years, if registered afterwards they are exempt for 5 years.
  • Company tax: Tax deductions on company cars based on the electric storage capacity included in the vehicle.
  • Transport companies are paying a reduced electricity tax for the operation of their electric or hybrid buses (11.42 EUR/MWh instead of 20.5 EUR/MWh).

Local incentives

  • Free parking, dedicated parking spots and bus lane use for BEVs in some cities.

Charging infrastructure incentives (public and private)

  • A maximum grant of 40% is given for both fast chargers (up to EUR 30,000) and normal chargers (up to EUR 2,500).

Complementary policies

  • Consumer awareness and research and development programmes on sustainable mobility.
  • Increased allowable spending for government EVs.

The Netherlands

The Netherlands' consumer incentives and the extensive funding of charging infrastructure have resulted in the highest number of publicly accessible charging points in the EU and made the Netherlands one of the global leaders in electro-mobility. The Netherlands wants all new cars to be emissions-free by 2030, effectively prohibiting new petrol and diesel vehicle sales. The charging infrastructure in the Netherlands has been successfully achieved due to the effective public-private partnerships - a consortium of regional and state-owned electricity grid operators.

The government supports the sales of low emissions vehicles by offering (partial) exemption from registration tax, road tax, and company car tax. While these direct incentives are still relatively high compared to most other EU Member States, they have been lowered over the past years.

Information about the incentives and policies applied in the Netherlands:

Direct consumer incentives

Tax benefits:

  • Registration tax: Zero emission vehicles are exempt. For the other cars, the system is progressive, with five levels of CO2 emissions that pay different amounts of registration tax: PHEVs go to level 1 (1-79g CO2/km) and pay EUR 6 per gram; for level 2 (80-106g CO2/km) the tariff is EUR 69 per gram CO2; the final level is EUR 476 per gram for 174g CO2/km or over.
  • Road tax: Zero emission vehicles are exempt. PHEVs (< 51g CO2/km) pay half of the road tax.
  • Company car tax: Income tax must be paid on the private use of a company car. This is done by imposing a surcharge of 4-25% of the catalogue value on the taxable income. This percentage is 4% for zero emission vehicles while the standard rate for ICE vehicles is 22%.
  • Tax deductible investments: System to facilitate investments in clean technology, and makes these investments partially deductible from corporate and income taxes. Zero emission vehicles and PHEVs (not with a diesel engine) are on the list of deductible investments, as are the accompanying charging points.

Local incentives

  • Various subsidies are available for the purchase of electric cars, taxis and trucks.
  • Additionally, municipalities offer various subsidies for the installation of charging stations.

Charging infrastructure incentives (public and private)

  • Green Deal: EUR 5.7 million for the deployment of publicly accessible charging points (provided that the municipality and the market party contribute equally)

Complementary policies

  • EUR 3,000/EUR 5,000 subsidy for electric vans and taxis.
  • Favourable asset depreciation rates for EVs.
  • Innovation incentives for small and medium enterprises.

France

Similarly to the Netherlands and Norway, France has announced an end date on the sale of conventional petrol and diesel vehicles - by 2040, all new vehicles will have to be emissions-free. To support the increasing share of PEV sales, promotional programmes for charging infrastructure have been in place for several years.

The Loi sur la Transition Énergétique pour la Croissance Verte sets EV targets for government and business car fleets. When replacing their vehicle fleets, the French state and its public bodies are required to purchase a minimum of 50% vehicles with low CO2 and air-polluting emissions, such as EVs. Local authorities have a lower target of 20%.

By 2020, car rental and taxi firms were also required to purchase 10% low emissions vehicles when renewing their fleets. All new buses purchased for public transport services from 2025 onwards must be low emissions vehicles.

Information about the incentives and policies applied by the Netherlands:

Direct consumer incentives.

Bonus payments & premiums

  • EVs and PHEVs emitting 20g CO2/km or less get EUR 6,000, vehicles emitting between 21 and 60g/km receive a EUR 1,000 premium.
  • "L" category vehicles (quadricycles, motorbikes, scooters, etc.) receive a premium of EUR 250/kWh, with a limit of EUR 1,000 or 27% of purchase price.
  • Diesel scrappage scheme: Up to EUR 4,000 if an old diesel vehicle car is replaced by a low emissions vehicle.

Tax benefits:

  • Registration tax: Regions have the option to provide an exemption (either total or 50%) for alternative fuel vehicles.
  • Company car tax: BEVs are exempt and hybrid vehicles emitting less than 110g CO2/km are exempt during the first two years after registration.

Charging infrastructure incentives (public and private).

  • EUR 50 million funding available for charging infrastructure covering up to 30% of the equipment cost.
  • Public-private partnerships to accelerate the construction of charging points.
  • Tax breaks for home charging equipment.

Complementary policies.

  • EV targets for government and business fleets.
  • Subsidy for car rental and taxi firms.
  • Research and development funding.

To summarize, it can be stated that the national, local regulations providing variety of measures such as fuel economy standards coupled with incentives for zero and low-emissions vehicles, economic instruments that help bridge the cost gap between electric and conventional vehicles and support for the deployment of charging infrastructure, are the cause bringing these countries to the leading positions. Tax breaks are the most common measure to incentivise EV in the analysed countries. These include exemption or reduction of registration tax, road tax, and company car tax. Apart from the tax breaks, grants and premiums are additional measures used to stimulate the uptake of EV and the dissemination of charging infrastructure.

Footnotes

1 Spöttle, M., Jörling, K., Schimmel, M., Staats, M., Grizzel L., Jerram, L., Drier, W., Gartner, J. (2018), Research for TRAN Committee – Charging infrastructure for electric road vehicles, European Parliament, Policy Department for Structural and Cohesion Policies, Brussels;

2 https://www.fleetcarma.com/european-countries-electric-vehicle-adoption/

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