Subsidies Have Contributed to the Increase in Sales of Electric and Hybrid Vehicles

The sale of fully electric vehicles has increased from 9 vehicles in the first seven months of last year to 39 vehicles in the same period this year.

Regarding the discontinuation of subsidies for the purchase of new electric and hybrid vehicles, which have been subsidized according to the Government of the Republic of Serbia's regulation since November 2020, the Minister of the Environment, Irena Vujović, organized a meeting with representatives of the Serbian Association of Vehicle and Parts Importers and the Group of Vehicle Importers at the Chamber of Commerce.

An announcement on the Ministry of the Environment's website stated that the process of accepting applications for subsidies had been halted. Passenger vehicles, mopeds, and motorcycles with electric, hybrid, and plug-in hybrid propulsion, with a CO2 emission limit of 140 and 65 g/km, were subsidized under this regulation. The discontinuation occurred because the budget for subsidies had been exhausted.

According to information provided by representatives of the Ministry of the Environment, the subsidy allocated for this purpose last year was 30 million dinars, while this year a larger amount of 120 million dinars has been allocated. Given the business conditions last year due to the COVID-19 pandemic, the overall vehicle sales were lower than in 2019. Expectations were that the situation would improve in 2021.

Representatives of the Serbian Association presented data indicating that, according to the latest registration report, the sale of passenger vehicles for the first seven months of this year amounted to 15,217, compared to a total of 12,197 in the same period in 2020, representing an increase of 24.76%.

The sale of fully electric vehicles increased from 9 vehicles in the first seven months of last year to 39 vehicles in the same period this year. The sale of hybrid vehicles (petrol-electric and diesel-electric) increased three and a half times, from 473 in 2020 to 1,688 in the same seven-month period in 2021.

The data shows an increase in the share of electric and hybrid vehicles in total new vehicle sales compared to the previous year, although they are still significantly smaller than European averages, especially in the case of purely electric vehicles, whose sales are rapidly growing in Europe, along with investments in expanding electric charging infrastructure.

This statistics indicates very positive effects of the subsidy regulation, which contributed to an increased interest in purchasing less-polluting vehicles and, consequently, a reduction in air pollution from the impact of passenger vehicles in traffic. In addition, the offering of these vehicles will increase in the future across all manufacturers. As manufacturers announce, there is an expectation for a complete phase-out of internal combustion engine vehicles, starting with diesel engines that cause more pollution. Some manufacturers announce such steps as early as 2025.

The meeting concluded that work will continue in the coming period to prepare and harmonize all provisions of the regulation that have hindered or slowed down the process from the Ministry's or the user's side, the applicant.
All applications received until the suspension of new requests will be processed and handled, while the new regulation will be enacted in November for the following year.

Belgrade, August 20, 2021.

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