ACEA calls for expansion of EV incentive schemes across Europe to meet expected targets
May 7, 2025
The European Automobile Manufacturers’ Association (ACEA), based in Brussels, Belgium, has published an updated overview of tax and incentive schemes for zero-emission cars and commercial vehicles. As the market for electric vehicles continues to underperform, the ACEA states that the expansion and better coordination of EV incentive schemes at the European level is crucial.
“Today, the EV market share for cars stands at around 15% – that’s still far from where it was expected to be at 25% by the end of this year,” stated Sigrid de Vries, Director General of the European Automobile Manufacturers’ Association (ACEA). “Europe’s electric vehicle market is still developing and hasn’t hit the crucial tipping point for mass adoption yet. Incentives are one key piece of the puzzle to help drive demand and get us to this common goal.”
While EV technology continues to advance, and there is an increasing range of models priced under €30,000 on the market, upfront costs remain a significant barrier for many consumers. Battery-electric vehicles (BEVs) are currently more expensive than internal combustion engine (ICE) vehicles, largely due to higher battery manufacturing costs. Therefore, purchase incentives play a crucial role in consumers’ purchasing decisions, making them essential for establishing a mass market for these vehicles.
The withdrawal of incentives for EV purchases in Germany at the end of 2023, leading to the collapse of the German BEV market, highlighted its fragility. As state-funded schemes ended before the market had fully matured, EV purchases dropped by nearly a third.
While the European market is still far from its potential, several purchasing incentive schemes are being phased out. The number of member states not offering any purchase incentives for cars has increased to eight, up from six last year. The availability of schemes for heavy-duty vehicles (HDV), such as trucks and buses, is even more critical, with over a third of member states offering no incentives for acquisition. Only twelve countries offer infrastructure incentives despite the significant lack of public HDV-suitable charging points.
While robust incentive schemes have been proven to work, the issue extends beyond just financial incentives to a need for better coordination across European countries. Unlike nations such as China, Europe has a fragmented framework, with schemes being decided at the national level. This results in over thirty widely differing schemes across the continent, with different funding levels and criteria, leading to a multi-speed EV uptake in Europe.
Belgium is known for its generous schemes and higher EV share in the powertrain mix – but this starkly contrasts with weaker schemes in several Central and East European member states, where the share is noticeably low. This is why European automakers were disappointed with the lack of funding for demand incentives so far in the Automotive Active Plan, despite Executive Vice-President Ribera previously announcing a pan-European subsidy scheme that could address imbalances and fragmentation. The ACEA encouraged the European Commission to revisit this proposed initiative as it would provide a much-needed impulse at a critical time in the transition.
The ACEA stressed the need for more robust schemes and a cohesive approach to EV incentives. The fragmented landscape of national schemes not only hinders the potential for broader adoption but also delays progress on reaching CO2 targets in a challenging environment for manufacturers.
