Europeans were not so impressed by government subsidies for EVs

Article by Christian Andrei, on September 27, 2011

Market researchers at JATO Dynamics said that government subsidies in Europe have not increased EV sales by much as buyers are influenced by factors aside from financial incentives. When it comes to electric car sales, Germany is the biggest market in Europe. A total of 1,020 units were sold in the first half even when it just offers a subsidy of 380 euros, one of the lowest in the region.

Denmark’s tax incentives are only up to 20,588 euros but in the first half, there were only 283 EVs sold. Spain offers a subsidy of 6,500 euros while the UK offers 6,400 euros but 599 units were sold in the UK while only 122 were sold in Spain.

In a statement, Gareth Hession, JATO's head of research, said that the discrepancies emphasize the “apparently low influence of price on purchase decisions.”

He said that sales are affected more by other factors like the degree of urban geography, market maturity and charging infrastructure than was estimated in the past. Hession said that some of the local factors include being able to use bus lanes and free city-center parking in Oslo and the exemption from the congestion charge that London offers.

These two factors seem to have more of an impact than point-of-purchase incentives. He added that the EV market will grow significantly and as the market matures some more, the subsidies will have a bigger influence as other factors like charging infrastructure are focused on.

Currently, the large subsidies fail to address most concerns of end users with regards to real world application, flexibility, and suitability for its purpose. Hession said that manufacturers have to understand these factors better in order to optimize customer engagement and sales growth.

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