Incentives key to EV adoption across Europe, ACEA report finds

Monetary and fiscal incentives remain critical to boosting the affordability and uptake of battery-electric vehicles (BEVs) across the European Union, according to a new report from the European Automobile Manufacturers’ Association (ACEA).

The report, Demand incentives matter: Making zero-emission cars affordable across the European Union, highlights stark differences in BEV adoption between high- and lower-income member states.

While electric cars are becoming mainstream in wealthier countries such as Denmark, the Netherlands and Finland, market share remains below 7% in many lower and middle-income nations. ACEA’s analysis shows a strong correlation between national wealth, consumer purchasing power and BEV penetration rates.

Incentives drive rapid growth

The report points to recent examples where targeted incentives have delivered quick results. Poland doubled BEV registrations following the introduction of new support schemes, Slovenia saw an 89% increase, and Portugal’s market share has risen to over 21% after a package of grants and tax exemptions.

ACEA said these results underline the importance of government-backed measures such as purchase grants, tax breaks and layered bonus systems in overcoming cost barriers and building consumer confidence.

Risk of setbacks when support is withdrawn

Conversely, the report warns that scaling back financial incentives can quickly stall progress. France’s subsidy cuts and Germany’s abrupt withdrawal of BEV purchase incentives at the end of 2023 both contributed to a slowdown in registrations across several EU markets.

ACEA argues that infrastructure expansion and wider model availability alone are insufficient to drive mass adoption. “Affordability remains the keystone of mass adoption,” the association said, calling for predictable, long-term support mechanisms to make electric mobility accessible to all consumers.

Policy implications

As the European Commission prepares new proposals to green corporate fleets, ACEA’s findings reinforce the need for consistent demand-side measures to sustain Europe’s shift to zero-emission mobility.

The report concludes that stable and well-designed incentive frameworks are essential if the EU is to meet its climate and transport decarbonisation targets.