Incentives for Electric Vehicles

Many countries have tax rebate programs or incentive schemes favouring the purchase of electric vehicles. They come in a number of ways and vary in magnitude:

• A reduction in car registration tax (e.g. Austria: a € 500 bonus for alternative propulsion systems, in particular for battery and hybrid electric vehicles;
  
  
• A reduction in personal income tax (e.g. Belgium: 30% of the purchase price with a maximum of € 9,000);
  
  
• An exemption from the annual circulation tax (e.g. United Kingdom and Germany for the first five years);
  
  
• Incentives at the point of purchase (e.g. United Kingdom: £ 5,000; Spanish regional governments: between € 2,000 and € 6,000).  The future of these subsidies is still unclear. As they benefit a limited number of people  compared to a majority of consumers subject to the general taxation of conventional fleets, such incentives may not be sustainable as and when the numbers of electric vehicles increase substantially;
  
  
• In many cities, electric vehicles are also entitled  to circulate in low emission zones, to enter areas where traffic is limited or forbidden, to access  free parking spaces in central areas, to use bus lanes, and are exempted from road pricing schemes or congestion charges (where applicable). Such advantages are possible due to the limited number of electric vehicles on the roads but if the size of the electric fleet increases, municipalities and governments would need to review the practicality of such policies.