All about financial incentives for electric car buyers in Europe

Published by on 11.19.2019 - 5 min

Europe is taking action to cut down on greenhouse gases! Substantial support for electromobility lies at the core of this movement. Across Europe, the extent of available help towards the purchase of an electric car varies significantly between countries. But momentum is increasing. We take a closer look.

The electric car: a much-needed alternative

Europe’s intended CO2 emission reduction targets mean that fundamental changes need to be made. This is driven both by Europe’s wish to reduce greenhouse gas emissions and local authorities’ need to reduce traffic congestion and improve air quality. This accounts for the increasingly commonplace restrictions on motor vehicle access to downtown areas. On top of that, there are initiatives such as the Crit’air sticker in France and the support for electric vehicles that has come about in recent years thanks to various tax incentive policies.
Each country implements its own measures depending on local restrictions and objectives. With initiatives on various scales, Europe is, to date, the part of the world with the highest ambitions in this area, ahead of China and the United States.

Eco-bonus and conversion credit — what help can you apply for in France?

Arc de Triomphe, Paris

There are many types of help available in France, and two of them in particular are the flagships of the country’s eco-friendly transition support policy: the eco-bonus and conversion credit.
After a first raft of changes in this area, which were introduced this year, the parliamentary bodies have just started talks aiming to put together a new finance bill. So the existing legislation will undergo further changes in the coming months.

The eco-bonus: a safe bet

Introduced in 2008 for private individuals and businesses, the eco-bonus incentivizes car buyers (of passenger cars or utility vehicles) to opt for new vehicles with low CO2 emissions. Although you’re obviously free to choose whether or not you buy an electric car, the measure is designed with that in mind and qualifies the buyer for a bonus of up to 6,000 euros. All that’s needed to qualify for this tax break is proof of your home or business address in France. However, there are certain obligations for buyers depending on the type of vehicle.

Conversion credit for electric and hybrid vehicles

As of April 2015, the conversion credit has taken the place of the former scrapping credit, this time against the purchase cost of an electric or rechargeable hybrid vehicle. Unlike the eco-bonus, it is only valid against the purchase cost of an electric vehicle, and requires the beneficiary to have their more polluting car scrapped. It can reach 5,000 euros, and can be claimed in addition to the eco-bonus.

Whether for a purchase or long-term lease, the credit applies to new or used electric and rechargeable hybrid cars and light utility vehicles. Used vehicles and combustion engine cars with Crit’Air 1 or 2 stickers are also eligible, as are e-scooters with two, three or four wheels. As for the vehicle being taken off the road, it can be a diesel vehicle registered before 2001 or a gas one registered before 1997. It must be scrapped no more than six months after the vehicle’s purchase or lease invoice date. When it comes to the commitments made by the buyer, they are the same as those under the eco-bonus plan.

For further details on the conditions concerning the conversion credit in France, check the government website.

Local and specific help with going green

The French government is not the only one supporting the ecological transition. On their own scale, regions and local governments are showing support via their own plans to help with the purchase of electric vehicles for private individuals and businesses. These credits can be claimed in addition to the eco-bonus and conversion credit.
For example, the Île-de-France region (Paris and its bordering departments) supports businesses by offering those with fewer than 50 employees 6,000 euros towards the purchase of light electric vehicles, hydrogen vehicles and rechargeable hybrid vehicles. It is also helping transport companies by offering them 9,000 euros towards the purchase of electric or hydrogen trucks with a gross vehicle weight rating (GVWR) above 3.5 tons. It is therefore possible to accumulate most of these purchase aids, provided that you are thorough when getting information from your region and town or city.

The UK: financial support called “Car Scrap Allowance”

Financial district in London at dusk

What about conversion credit in the rest of Europe? The UK, for example, wants very low-emission vehicles to account for 50 to 70% of new vehicle sales by 2030. To do this, the first initiative in 2009 was to introduce the Car Scrap Allowance: a program granting support in the purchase of a new vehicle for British citizens who have owned a car of at least 10 years old for more than 12 months. It amounts to 2,000 pounds (around 1,800 euros).

Plus, government support for electromobility manifests in a plan helping towards the purchase of an electric or rechargeable hybrid vehicle, provided that it has a range of at least 70 miles (about 113 km). Since November 2018, only electric and hydrogen vehicles with this range can claim a credit of 3,500 pounds (3,990 euros).

Italy: the newcomer

Rome, Italy. Colosseum Also Known As Flavian Amphitheatre In Evening Or Night Time.

As of March 2019, Italy has joined the group of countries making the transition. It has announced plans to put a million electric vehicles on the road by 2022 and is going for a two-tiered support policy: a bonus towards the purchase of electric vehicles on one hand and taxes on combustion engine cars on the other. The subsidy towards the purchase of a new low-emission vehicle can reach 6,000 euros. However, it doesn’t apply to cars costing more than 50,000 euros. They also vary depending on emission levels (for hybrid vehicles).
Taxes on combustion engine cars are also subject to terms and conditions and will depend on emission levels (from 1,100 to 2,500 euros for the most polluting vehicles). However, this tax hike will not apply to small family cars. We will have to wait until the program comes to an end in 2021 to assess its impact.

The Romanian exception

Palace of Parliament at night

Another example of a European electric vehicle purchase initiative is Romania. As of 2016 the country had more than 6 million cars on the road, of which only 200 were electric or rechargeable hybrid vehicles. The Romanian government wanted to reverse this poor record via a large-scale purchase support plan. So that same year, the program known as Rabla Plus was launched, initially granting a credit of 5,000 euros to new electric car buyers.

The Romanian government thought that this measure didn’t go far enough, and in 2017 doubled the credit to 10,000 euros for the purchase of an all-electric vehicle. Those buying a standard (non-rechargeable) hybrid car will get a credit of 1,450 euros. This is quite a big difference, which shows that the country is serious about wanting to go green.

Germany: “Moves”, the support plan that replaced Movealt

Victory Column Berlin

Having trailed behind the EU as a whole at first, since 2017 Germany has been catching up with its neighbors with substantial support for electromobility. Over the past two years the country has seen clear changes in purchasing trends thanks to the introduction of new electric cars on the market. A credit plan has been put in place, with amounts ranging from 3,000 euros for a rechargeable hybrid to 4,000 euros for the purchase of an all-electric car.

Alongside its measures to support the electric car trend, Germany — in conjunction with its vehicle manufacturers — is working towards making diesel a thing of the past through a robust policy. It translates into two flagship measures. The first is the “Umweltprämie”, or eco-bonus, which can be claimed by owners of diesel vehicles that meet Euro 4 emissions standards  and those that came before them. The second, the “Wechselprämie”, or conversion bonus, can be claimed by buyers of relatively new vehicles that meet the Euro 4 or 5 standards, and who live in one of the 14 cities deemed priority cases by the government.
For each of these two measures, vehicle manufacturers are free to attribute their own bonus amounts.

 

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