New car incentives could come from Europe

As anticipated, German Chancellor Olaf Scholz finds confirmation in statements by Teresa Ribera, Executive Vice President of the European Commission

Photo by: Volvo

By: Eleonora Lilli

Jan 26, 2025 at 4:20am ET

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Car incentives in Europe have ended in several countries at the end of 2024, but may return, not by the state, but possibly by the EU. After recent statements by German Chancellor Olaf Scholz, the confirmation comes directly from Teresa Ribera, executive vice-president of the European Commission.

According to the Financial Times, at the World Economic Forum in Davos, the Spanish politician declared that yes, the European Commission is considering the introduction of new incentives for the purchase of electric cars.

Putting up a united front

"What we need are pragmatic solutions, not ideological ones," said Scholz. "And that is why I am pleased that the President of the Commission (Ursula von der Leyen, ed.) has now accepted my proposal for harmonised European purchase premiums for electric cars.

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"It makes sense to think in a pan-European perspective to facilitate common measures, instead of going through national subsidies," Ribera then commented, specifying however how discussions are still ongoing to define the scope and modalities of car incentives. In short, if the door has been opened, the road still promises to be long.

What is certain is that the electric car in Europe needs a boost. In 2024 the market share was 15.3%, down 1.3% from the previous year. As mentioned, it remains to be seen which rules will be adopted, especially in terms of protectionism. In fact, European manufacturers could be favoured, as the Biden administration did, with tax credits of $7,500 (just over £6,000), provided they have a total of components produced in the United States. A move that has brought numerous investments to the US. Europe could follow the same example.