Europe makes it clear: Electric mobility cannot progress without government support
Monetary and fiscal incentives are essential to maintain the desired pace of electric vehicle (EV) sales in the EU — this is the main conclusion of a study conducted by the European Automobile Manufacturers’ Association (ACEA), which was also shared with the Serbian Association of Vehicle and Parts Importers.
The analysis shows that despite the increasing number of EVs, falling prices, and the introduction of more affordable models, the share of electric vehicles among newly registered cars remains unsatisfactory. It was also observed that the market share of EVs closely follows GDP per capita. In high-income countries such as Denmark, the Netherlands, and Finland — where purchasing power is stronger and incentives are stable — the uptake of electric cars is significant: two out of three new cars in Denmark are electric, and about one in three in the Netherlands and Finland.
In contrast, in lower- and middle-income EU member states, where average GDP per capita is around €26,000, market share remains below 7%. “Without incentives to narrow the price gap between electric and internal combustion engine (ICE) vehicles, the transition risks becoming a privilege of wealthier nations,” warns ACEA.
Affordability is the key element of the transition: without it, even the best infrastructure and the widest range of models cannot sustain mass-market demand.
Europe’s path toward reducing road transport emissions depends on predictable, long-term demand support, as affordable electric mobility is the way to make it universal, the analysis states.
In its report, ACEA provides an overview of national incentive schemes and their impact on EV purchases in selected EU member states. The report focuses on the passenger car market only, as commercial vehicles operate under different business models and require differently structured incentive frameworks.
This group includes eleven of the EU’s most prosperous markets, with an average GDP per capita of €63,680 and an average EV market share of 29.7%. Denmark leads with an impressive 63.8% share of EVs, followed by the Netherlands (35%) and Finland (34.2%). Even the more modest participants in this group — Germany (17.7%) and France (17.6%) — exceed the EU average for the first half of 2025. These countries benefit from strong consumer purchasing power and advanced charging networks, making EVs an economically attractive choice for buyers.
This cluster includes sixteen markets with an average GDP per capita of €26,059 and a much lower average EV share of 6.9%. Portugal stands out as a positive example with a 20.2% EV share despite moderate income levels, while Eastern European countries such as Slovakia (4.4%), Bulgaria (4.7%), and Poland (5%) lag significantly behind.
Income limitations in these markets create affordability barriers that are difficult for policy interventions to overcome, resulting in EV adoption rates far below the European average. Also in this group are Cyprus (€34,490; 8.9%), Estonia (€28,990; 7.2%), Lithuania (€27,150; 5%), Croatia (€21,740; 0.9%), Latvia (€21,610; 6.6%), and Romania (€18,560; 6.9%).
Poland
The new Polish “NaszEauto” program, launched in February 2025 with a budget of PLN 1.6 billion (≈€376 million), provides private individuals with a base subsidy of PLN 18,750 (≈€4,400), or PLN 30,000 (≈€7,050) in certain cases — such as private renters, entrepreneurs, or family cardholders — for new EVs priced below PLN 225,000 (≈€52,900) net of VAT.
Additional bonuses include PLN 10,000 (≈€2,350) for scrapping an old ICE vehicle and up to PLN 11,250 (≈€2,650) for low-income households, with total subsidies capped at PLN 40,000 (≈€9,400).
As a result, EV registrations surged by 106.7%, increasing market share to 6% between January and September 2025, compared to 3.1% in the same period of 2024.
Slovenia
Thanks to these incentives, EV registrations increased by 89% this year, raising market share to 10% (Jan–Sep 2025) compared to 5.7% in the same period last year.
Spain
Spain retroactively extended its MOVES III program, adding €400 million to reach a total budget of €1.735 billion. The program now offers:
Up to €7,000 for new EVs priced under €45,000 (excl. VAT) with vehicle scrappage or €4,500 without scrappage
Retroactive application to purchases made since January 1, 2025
These incentives have led to a sharp 89.6% increase in EV registrations by September, boosting market share to 8.4% (from 5.1% a year earlier). By April 2025, €1.335 billion had been distributed across Spain’s regions, supporting the purchase of over 142,000 EVs.
Portugal
In Portugal, private buyers of new EVs priced up to €38,500 (incl. VAT) — or up to €55,000 for six- to nine-seat models — are entitled to a €4,000 refund if they scrap a vehicle over ten years old. Social institutions can receive an additional €5,000 per vehicle for certain population categories. EVs are fully exempt from registration and annual circulation taxes, providing ongoing fiscal relief for owners.
Additional corporate tax incentives include:
Full exemption from vehicle tax for EV's
100% VAT deduction for EVs priced ≤ €62,500 (excl. VAT)
EVs are not taxed as “benefits in kind” for companies
Indirect incentives include income tax-free subsidies, VAT deductions on electricity, maintenance, and repairs, as well as free or discounted parking in many municipalities and access to restricted zones. EV sales rose by 26.3% from January to September, with market share up to 21.4% from 18.4% last year.
France
In 2025, France significantly cut its eco-bonus budget from €1.5 billion in 2024 to €500 million. During the first half of the year, incentives for new EV purchases were reduced to €2,000–€4,000 depending on household income — a major drop from the previous €7,000 maximum. The eco-bonus was abolished on July 1, 2025, and replaced by two energy savings certificate (CEE) schemes. In this market-based system, energy suppliers finance energy efficiency measures, effectively replacing direct subsidies.
By July, all passenger car bonuses were phased out, leaving the CEE framework as the main support mechanism.
From October 2025, two separate schemes coexist, but cannot be combined:
Certificats d’économie d’énergie (CEE)
- The “classic” scheme (since Jan 2025): €300–€5,000 incentives for EVs and light commercial vehicles, available to households and legal entities.
- The “coup de pouce” scheme (since July 2025): targeted at households with monthly income between €3,100–€4,200, for fully electric cars priced under €47,000 and under 2.4 tons. From Oct 2025, an additional €1,000 is available for EVs with battery cells made in Europe.
Social leasing program (since Sept 30, 2025): provides up to €7,000 support, with monthly lease payments capped at €200, for individuals earning ≤ €16,300 per household member who meet specific commuting or mileage conditions.
Despite these generous measures, EV registrations have not increased. The French EV market has remained relatively flat, and total new car registrations are down 6.3% this year. EV market share reached 18.2%.
Belgium
Belgium’s most notable change was the early termination of its €5,000 EV subsidy in Flanders on November 22, 2024 — originally planned to last through 2025.
However, tax incentives for company cars continue:
- 100% tax deductibility for EVs purchased from 2020–2026
- 6% VAT rate on household electricity consumption (vs. standard 21%)
By early 2025, EVs made up 33.4% of new registrations, but growth slowed to 12.4%, and total registrations fell by 9.2% between January and September.
The experiences of European markets clearly demonstrate that fiscal support is a decisive factor in the pace of the electric transition. Where subsidies are stable and predictable, markets grow and consumer confidence follows; where they are reduced or withdrawn, stagnation and decline occur.
Without consistent, long-term government policy, the shift to electric mobility will remain a privilege of wealthier nations and social groups rather than a shared European goal. Subsidies are therefore not a cost — but an investment in sustainable mobility and the competitiveness of Europe’s automotive industry.
Source: ACEA
Photo: AI
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