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Market research: Tax incentives for electric cars in Europe

Today, electric vehicles are even more expensive to purchase than internal combustion vehicles. Fortunately, there are tax incentives for the purchase of electric cars in Europe. These incentives are intended to simplify the transition to cleaner mobility. Discover in this article a comparison of the different financial incentives depending on the country.

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  1. France
  2. Belgium
  3. Luxemburg
  4. Great Britain
  5. Germany

In France

The maluses

The first tariff grid is based on the NEDC standard and was implemented on 1 January 2020, with a trigger threshold at 110 g CO2/km for amounts ranging from 50 euros for the least polluting vehicles to 20,000 euros for those emitting more than 185 g CO2/km.

second ecological malus grid was applied in March 2020 in France to comply with the new WLTP measurement standard (for more information, please read the article dedicated to this subject). For all vehicles that have been approved via this new standard, the malus will be applied to the car emitting at least 138 g CO2/km given the rigour of these tests for a malus worth 50 euros.

Service-public.fr specifies that individual users are entitled to a reduction on this ecological malus depending on their personal and family situation. The same measure applies to vans not chartered to transport passengers and their goods.

The bonuses

The French can receive an ecological bonus worth 6,000 euros for the purchase of a 100% electric vehicle. An ecological bonus that is among the most advantageous in Europe, just ahead of Luxemburg (5,000 euros).

The French can also benefit from a conversion bonus. It will be awarded to private individuals and professionals who switch from a diesel vehicle registered before 2001 (before 2006 in certain exceptional cases) or a petrol vehicle registered before 1997, for the purchase of a new or second-hand thermal, electric or rechargeable hybrid vehicle.


Details of the conversion premium in France

  • 2 500 € + ecological bonus for the purchase of a 100% electric vehicle
  • 2 500 € for the purchase of a rechargeable hybrid vehicle
  • 1 500 € for the purchase of a petrol vehicle (CRIT’AIR 1) emitting less than 117g CO2/km
  • 1 500 € for the purchase of a diesel vehicle (CRIT’AIR 2) emitting less than 117g CO2/km
  • 1 100 € + ecological bonus for the purchase of two-wheelers, three-wheelers and electric quadricycles

Note that the French government specifies the possibility of obtaining a “Super-prime” of up to 5,000 euros for the purchase of an electric or rechargeable hybrid vehicle and up to 3,000 euros for the purchase of a petrol or diesel vehicle, up to a limit of 80% of the purchase cost.

In Belgium

It should be noted that Belgian citizens residing in Flanders, Wallonia and Brussels-Capital do not enjoy the same tax advantages concerning their vehicles, even when buying an electric or electrified car. This is due to the regionalisation of competence in the Belgian political system.

Aperçu des taxes belges

  • Taxe de première mise en circulation après immatriculation du véhicule
  • Taxe de circulation annuelle basée sur la puissance du moteur et le carburant.

What about electric cars?

While Belgian citizens who decide to invest in an electric bicycle receive a bonus (to be checked + amount + conditions), owners of electric vehicles are left out. The registration and road taxes are reduced, of course. However, there is no bonus as such, except in Flanders, where owners of electrified vehicles can receive between 2,000 and 4,000 euros as a purchase bonus.

It should be noted that it is possible to deduct the purchase price from tax, and beyond (120% of the value of the electric vehicle). However, beware of the constraints that apply! This tax reduction applies to vehicles:

  • Rear-wheel drive
  • With an electric motor
  • Able to carry a minimum of 2 people
  • This applies to owners of 4-wheeled electric vehicles (2 or more people) but also to owners of motorbikes and tricycles. A drawback for quadricycles weighing more than 400kg excluding the weight of the battery, as they will not be able to benefit from this tax reduction.

The tax reduction for the purchase of an electric vehicle is 15% of the purchase value, with a maximum of 3,010 euros, and is recovered via the tax return, unlike the purchase premiums.

In Luxemburg

Since 1 January 2019, Luxemburg has been offering a bonus on the purchase of a fully electric vehicle put into circulation in Luxemburg.

The different Luxemburg premiums:

  • Cars and commercial vehicles: 5,000 euros
  • Plug-in hybrid vehicles (emissions > 50 g CO2/km): €3,000
  • Motorbikes: 500 euros

In Great Britain

The British also benefit from a bonus for the purchase of an electric vehicle, known as the “Plug-In Car Grant”. This grant covers:

  • 35% of the purchase price of an electric car, capped at £3,000 for a maximum cost of £50,000
  • 20% of the purchase price of electric two-wheelers, up to a maximum of £1,500
  • 20% of the purchase price of an electric van, up to a maximum of £8,000
  • 20% up to £7,500 for taxis

In Germany

  • 3,000 euros bonus for the purchase (deducted from the invoice by the car dealer) of an electric or fuel-cell vehicle are provided for by the German government, compared with 2,500 euros if the purchase price of the vehicle exceeds 40,000 euros.
  • 2,250 euros for the purchase of a rechargeable hybrid vehicle, compared with 1,875 euros if the purchase price of the vehicle exceeds 40,000 euros.
  • 6,000 euros of ecological bonus for electric vehicles (5,000 euros for vehicles whose purchase price exceeds 40,000 euros)
  • 4,500 euros of ecological bonus for rechargeable hybrid vehicles (3,750 euros for vehicles with a purchase price exceeding 40,000 euros)

Images: Shutterstock

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