China's subsidies for the purchase of new-energy vehicles will end on December 31, 2022. This national subsidy policy, implemented since 2010, has finally fulfilled its historical mission. During this period, sales of new energy vehicles in China have grown rapidly, with a market penetration rate of 27.6% in 2022, reaching the 25% penetration rate target for new energy vehicles three years ahead of schedule. To some extent, the withdrawal of government subsidies means that China's new energy vehicle market will gradually mature through policy support, and the new energy vehicle industry will enter a purer market competition.

McKinsey's recent report on China's auto consumers summarizes several key consumption trends and characteristics: Consumption upgrades are still mainstream, and the proportion of rational customers is increasing; the halo of foreign capital is gradually fading; China's growth is gradually being driven by actual consumer needs rather than policies and licenses.

At the same time, European countries have also provided subsidies and tax reduction policies for new energy vehicles, and hope that in this way, the consumption trend of new energy vehicles in their own countries will be transformed from policy-driven to purchase demand-driven. So what will happen to the subsidy policies of European countries in 2023? Here are five examples of European countries.

1. Germany

The German government plans to reduce the subsidy for pure electric vehicles of each price range from 2023: the subsidy for pure electric vehicles of 40,000 euros and below will be reduced from 6,000 euros to 4,500 euros, and the quota for pure electric vehicles with a price of 40,000 to 65,000 euros will be reduced from 5,000 euros. Up to 3,000 euros; models above 65,000 euros are not eligible for subsidies. At the same time, plug-in hybrid models will no longer enjoy subsidies. In 2024, continue to reduce the subsidy for batteries with a price of 40,000 euros and below to 3,000 euros.

For second-hand vehicles with a service life of no more than 12 months, a total mileage of no more than 15,000 kilometers, and no subsidies in other EU countries, pure electric vehicles can receive 5,000 euros, and hybrid vehicles can receive 3,750 euros.

The implementation of Germany's new energy subsidy policy is similar to that of China, and the cost of subsidies will still be shared by the government and auto companies. The car company pays in advance, and the consumer pays the subsidy for the vehicle price. After the vehicle is licensed and reaches the specified mileage, the state will allocate subsidies to the car company.

2. France

In October 2022, French President Macron announced at the Paris Motor Show that for models priced below 47,000 euros, personal subsidies will increase from 6,000 euros to 7,000 euros, and corporate subsidies will increase from 4,000 euros to 5,000 euros.

Every time a company purchases a pure electric vehicle or a hydrogen energy vehicle with a price below 45,000 euros, it can receive a subsidy of 4,000 euros; There is no subsidy for cars worth 60,000 euros. Companies can receive a subsidy of 1,000 euros for each purchase of a plug-in hybrid vehicle.

France will launch an electric car rental subsidy program, which will make the monthly rent of an electric car as low as 100 euros, which is lower than the cost of gasoline for many traditional fuel car users.

3. UK

According to a study on the UK auto market by British insurance company Direct Line, due to factors such as high gasoline prices and rising second-hand value of new energy vehicles, the average lifetime cost of ownership of electric vehicles is now lower than that of fuel vehicles.

On June 14, 2022, the UK announced the cancellation of the £1,500 subsidy policy for pure electric or plug-in hybrid vehicles. Prior to this, the UK had gradually withdrawn subsidies. From 2,500 pounds to 1,500 pounds, the maximum price of the model that can enjoy the subsidy has also dropped from 35,000 pounds to 32,000 pounds.

The United Kingdom has shifted existing subsidy allocations to infrastructure construction such as charging networks and the electrification transformation of other types of vehicles. Those still eligible for subsidies include taxis, motorcycles, trucks, wheelchairs and other vehicles (certain conditions must be met).

4. Italy

In order to promote the development of electric vehicles, the Italian government will increase the subsidy for individuals whose income is less than 30,000 euros to 4,500/3,000 euros from 2023; Receive a subsidy of 5000/4000 euros.

5. Norway

Norway is currently the country with the highest penetration rate of new energy vehicles in Europe. It has encouraged electric vehicles since 1991, but the means of support are mainly reflected in taxes and use costs, such as exemption from sales tax and 25% value-added tax, road insurance tax, free charging fee, free parking fee, free import duty, etc. However, as the proportion of new energy vehicles has increased significantly, Norway's preferential policies have begun to tighten.

For the first time, Norway will introduce two new taxes applicable to pure electric vehicles from 2023. The first item is a vehicle weighing more than 500 kilograms, paying a weight tax of NOK 12.5 per kilogram. The second item is that the part of the price of pure electric vehicles exceeding NOK 500,000 (about 47,000 euros) will be subject to a 25% value-added tax. Most of the top 10 best-selling BEVs in Norway are priced above this threshold.

The world's new energy vehicles are entering a new stage of strong development. At the same time, the lithium battery industry is also growing rapidly.Foxtheon delivers renewable energy around the world. No matter where you are, we can help. If you need further advice from a member of our team, please send an email to info@foxtheon.com.