The problem with electric vehicles is that they are expensive due to the high cost of batteries, which is a significant hindrance to their ubiquity. People are unwilling to spend vast amounts of money on electric cars when they can get an internal combustion car at a lower price. Companies are also reluctant to invest and produce electric vehicles because few people can afford them.

The need to transition to an environmentally friendly means of transportation is imminent now, more than ever. That is why most governments are willing to incentivize the transition from combustion engine vehicles to electric vehicles. The incentives are meant to help vehicle manufacturers and attract potential buyers to buy and use electric vehicles.

Different countries have different incentive packages for electric vehicles, depending on their transition goals. I will discuss some of the prominent countries below.

US Incentives

The United States of America is one of the leading countries helping its citizens transition to a sustainable and environmentally friendly means of transportation. The US government is doing this by providing tax incentives for electric vehicles.

When you purchase a new fully electric or plug-in hybrid electric vehicle, you can get a Federal tax credit of up to $7,500! This tax credit means that you will be paying $7,500 less the next time you pay taxes. Note that the tax credit amount varies, and it depends on the type of vehicle you have purchased. According to the EPA on their website: “All-electric and plug-in hybrid cars purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to power the vehicle. State and/or local incentives may also apply.”

Tesla vehicles purchased after 31st December 2019 are exempted from the Federal Tax Credit. The incentives aim to support the manufacturing company to gain market acceptance. Tesla has achieved that. Some General Motors’ electric vehicles are also exempted from the tax credits.

China’s Incentives

China is the most significant contributor to greenhouse gases. In 2018, China alone emitted 10.06 billion metric tons of carbon dioxide into the atmosphere. So their government must encourage the transition to environmentally-friendly vehicles immediately. China is aggressively incentivizing electric vehicle adoption to reduce its environmental impact. With Tesla’s factory in Shanghai, the volume of electric cars produced in China will rise and help propel them towards their environmental goals.

The Chinese government’s subsidization of electric vehicles started in 2009. Since then, there have been various subsidy programs. The subsidy for pure electric vehicles is up to 60,000 yuan, while that of the plug-in hybrid vehicles is up 50,000 yuan. The actual subsidy for a car varies and depends on a host of other factors. For example, in 2018, the subsidy for pure electric vehicles with a range of up to 400 km was 50,000 yuan, while cars with ranges less than 150km were disqualified from the subsidy program. Electric buses and trucks have their separate subsidy program.

India’s Incentives

India is the third-largest emitter of carbon dioxide after China and the United States. India is concerned with its air quality, which keeps deteriorating as climate change worsens. India is contributing its quota to accelerating the adoption of electric vehicles in India. Several government programs were implemented to achieve seven million electric vehicles on the road by 2020.

In 2019, India’s cabinet approved $1.4 billion to subsidize the sales of electric vehicles. This subsidization will cover both pure electric and hybrids vehicles. The amount of the subsidy will vary depending on the type of electric car. It will only be available for electric cars costing less than 1.5 million rupees. The incentive per car can be up to 200,000 rupees.

Germany’s Incentives

Germany’s Chancellor has set the goal to bring 1 million electric cars to the roads by 2020. In 2016, German politicians approved an incentive program to promote the adoption of electric plug-in vehicles. Germany planned to spend 1 billion euros, with 600 million euros going to purchase subsidies, while 300 million will pay for charging stations in cities. So when you buy a pure electric vehicle in Germany, you will get a discount of 4,000 euros. However, if you buy a hybrid plug-in electric vehicle, you will only get 3,000 euros.

There is a catch, though, and yeah, you are right; government programs usually have caveats. Only cars purchased after May 2016 are eligible for the bonus. Also, you must keep the car for at least nine months! That’s not all: premium cars such as Tesla Model S and BMW i8 are not eligible for the subsidy. So if you want to benefit from the incentive, you must buy a car that costs less than 60,000 euros.


Many other countries are also implementing various programs to incentivize the transition to sustainable means of transportation.

Some of the other incentives which come with electric vehicles (non-major incentives) include access to bus lanes, free license registrations, no public parking fees, no toll fees, etc. The availability of these perks depends on the country, though.