While electric vehicles are growing in Norway, Denmark, France and the UK, they are struggling in the rest of Europe, including Sweden (which, like Germany, has cutted off incentives) and Iceland. But now a game-changer is coming: the European Incentives, direct from Brussels.
This initiative, proposed by German Chancellor Olaf Scholtz and developed in collaboration with European Commission President Ursula von der Leyen, envisions a unified European framework for EV incentives. This marks a departure from the fragmented approaches previously taken by individual nations.
A new, Pan-European strategy
In 2025, as countries like Germany and Sweden cutted of incentives and Italy has not a strategy actually, this proposed plan could provide a much-needed boost by aligning national efforts under a cohesive European strategy.
Germany, with its upcoming elections on February 23, is setting the stage for substantial reforms, reflecting its ongoing struggles within the automotive sector following the Volkswagen emissions scandal.
Key to this strategy is the “Strategic Dialogue on the Automotive Industry,” a collaborative effort involving policymakers, automotive manufacturers, component suppliers, and social partners. This forum, set to begin on January 30, will determine how these incentives can effectively support the industry’s transition to zero-emission vehicles.
Scholz’s address in Davos highlighted the urgency of reviving Europe’s EV market, where demand has stagnated. He proposed incentives that go beyond national boundaries, enabling a collective response to global challenges.
European-level investments could provide the scale needed to rejuvenate the market, with Germany’s automotive sector poised to act as a key driver. Increased EV sales would not only benefit manufacturers by balancing their sales mix but also help them avoid hefty CO2 emission penalties—a pressing concern for automakers across the continent.
Key questions and next steps
Several critical details about the proposed incentives remain unanswered. How will the funds be allocated among the 27 EU member states? Which EV models will qualify? And what mechanisms will ensure equitable distribution of resources? These questions are expected to be addressed in the upcoming Strategic Dialogue.
Chancellor Scholz’s vision for a pragmatic, non-ideological solution resonates with President von der Leyen’s call to action:
“The next few years will be crucial to maintaining our leadership in clean technologies. Europe has everything it needs to succeed.”
Together, they aim to create a harmonized incentive program that contrasts sharply with the United States’ recent rollbacks under Trump’s administration.
