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EV incentives to drive demand in Europe

  • Market: Metals
  • 13/07/20

Europe is rapidly becoming a global hotspot for growth in the electric vehicle (EV) market, with incentives introduced by multiple national governments expected to drive growth over the next five years.

EVs accounted for 6.8pc of Europe's total vehicle sales in the first quarter of 2020, up from a 2.5pc share a year earlier, in part because of an overall drop in sales due to Covid-19 but also indicating robust demand within this sector. Overall, EV market share crept up to 3pc in 2019 from 2pc in 2018, according to the ACEA.

Meanwhile, the number of EV models available in the EU market is set to reach 214 by 2021, up from 98 at the end of 2019, according to the European Battery Alliance. With all these new models to sell during an era of declining overall vehicle sales, EU countries and the UK have introduced further incentives to encourage uptake of EVs.

In the EU's largest market, Germany, several carrot and stick policies have been designed to increase EV demand. From 1 July until December 2020, value-added tax (VAT) on EVs will fall to 16pc, down from 19pc. Any privately owned EVs registered until the end of 2020 will have a 10-year tax exemption and EVs with a sales price below €40,000 will qualify for a €9,000 subsidy until December 2021.

France announced a package of support for carmakers in May, which included several loans to its embattled national producers such as Renault. In addition, all EVs in France are subject to a tax exemption from CO2-related taxes. France has subsidies of up to €7,000 for households buying EVs below €45,000 and a scrappage scheme of up to €5,000 for households and €2,500 for individuals.

Spain has reduced tax by 75pc for EVs in big cities like Madrid and Barcelona, and a scheme which subsidises the purchase of EVs by €4,000-5,000 depending on if a vehicle seven years or older is scrapped. In Italy, EVs are tax exempt for five years from registration and get a 75pc reduction in tax after that. Italy also has a bonus-malus scheme, where vehicles are subsidised up to €6,000 per car emitting less than 70g of CO2/km, but penalised by €2,500 per car if they emit above 250g of CO2/km.

Outside the EU, in the UK there is a road and VAT tax exemption for zero-emission vehicles and a €3,000 government grant for vehicles below €50,000. Every country in the EU 27 plus the UK, excluding Lithuania, offers incentives, tax reductions or a combination of both.

The EU battery market is now expected to rival China in the coming years. EV production is set to surge to over 2mn vehicles by 2021, from under 500,000 in 2019 according to clean transport campaign group Transport & Environment. Investments in EVs were €60bn in 2019 according to the group's estimates, compared to €17bn in China. German carmakers could overtake Chinese companies in 2021 in EV production, according to the European Battery Alliance.

Electric vehicle incentive measures EU 27+ UK
CountryTax break?Incentive/Subsidy?
AustriaYesYes
BelgiumYesNo
BulgariaYesNo
CyprusYesNo
CroatiaYesYes
Czech RepublicYesYes
DenmarkYesNo
EstoniaNoYes
FinlandYesYes
FranceYesYes
GermanyYesYes
GreeceYesYes
HungaryYesYes
IrelandYesYes
ItalyYesYes
LatviaYesNo
LithuaniaNoNo
LuxembourgNoYes
MaltaYesNo
NetherlandsYesYes
PolandYesYes
PortugalYesYes
RomaniaYesYes
SlovakiaYesYes
SloveniaYesYes
SpainYesYes
SwedenYesYes
United KingdomYesYes
— European Automobile Manufacturers' Association (ACEA)

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Canada levies new C$30bn counter-tariffs on US


12/03/25
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12/03/25

Canada levies new C$30bn counter-tariffs on US

Calgary, 12 March (Argus) — Canada is levying new counter-tariffs worth nearly C$30bn ($20.9bn) on the US in response to Washington's 25pc tariff on steel and aluminum imports. As of 12:01am on 13 March, 25pc reciprocal tariffs on an additional C$29.8bn of imports from the US will be put into place, Canada's finance minister Dominic LeBlanc said Wednesday. This includes C$12.6bn on steel products, C$3bn on aluminum products, and C$14.2bn on additional imported US goods. The list of additional goods includes computers, sports equipment, cast iron products, among others. US president Donald Trump imposed a 25pc tariff on steel and aluminum imports on Canada, Mexico and all foreign countries, effective Wednesday. LeBlanc said the government learned the US' tariffs would also be imposed on steel and aluminum content in "certain derivative products", which Canada is assessing and may impose further counter tariffs. Canada's minister of innovation, science and industry, François-Philippe Champagne, LeBlanc, and Ontario premier Doug Ford will meet with US secretary of commerce Howard Lutnick in Washington on 13 March to discuss an update to the US-Mexico-Canada (USMCA) free trade agreement. "The conversation tomorrow will be around lowering the temperature and focusing on the process that President Trump setup," said LeBlanc. Canada's position is that Trump should respect the USMCA agreement that he signed, LeBlanc said. The European Union is meanwhile preparing to retaliate against Trump's tariffs. The region will impose countermeasures of €26bn ($28bn), introduced in two stages starting on 1 April and then be fully in place on 13 April, European Commission president Ursula von der Leyen said on X today. "I've been telling my European colleagues that Canada is the canary in the coalmine," Canadian foreign affairs minister Melanie Joly said on Wednesday. "If the US can do this to us, their closest friend and ally, then nobody is safe." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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