Motorists in an increasing number of EU countries now have to pay what the electric cars actually cost. Several governments are filling the coffers with state subsidies.
Several EU countries have plans to phase out or reduce government subsidies for electric cars by 2025. This change could potentially hamper the growth of one of the most important markets for electric cars.
France is one of the countries implementing the most significant changes. In the national budget for 2025, the budget for electric car subsidies is reduced from DKK 11.25 billion to DKK 7.5 billion.
At the moment, French buyers can receive between DKK 28,000 and DKK 49,000 in subsidies for electric cars with a price below DKK 332,500. In 2025, the support will be reduced to between DKK 14,000 and DKK 28,000.
In addition, France is also reducing its leasing program for electric cars. The program, which allows low-income families to lease a small electric car for 700 kroner a month or a larger family car for 1,050 kroner a month, proved so popular that it had to be put on hold after just two months due to high demand.
In 2024, the program received DKK 4.55 billion in funding, but next year the budget will be reduced to DKK 2.1 billion.
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Spain is also making changes to its support program for electric cars, which has had a budget of 10.85 billion kroner. Buyers currently receive up to DKK 49,000 for electric cars, DKK 63,000 for commercial vehicles and additional support for motorcycles and scooters.
From next year, Spain will introduce direct payments of the support, which means that customers will no longer experience delays of up to two years to access the support. Although this change will streamline the process, the details of the program's overall budget and scope have not yet been released.
The consequences of reducing support for electric cars can already be seen. Germany, one of Europe's biggest markets for electric cars, saw a sharp drop in sales after the government cut subsidies in December 2023. Sales of electric cars in the country fell 69% in August compared to the previous year, after falling 37 percent in July and 16 percent in June.
A report from Rho Motion shows that electric cars are still on average 75% more expensive than cars with a combustion engine. Subsidies and tax incentives remain important tools to promote the sale of electric cars and make them available to more consumers.
