Electric Cars EU: Tax Benefits and Incentives in 2025

Get to know all the key government incentives for electric cars in the EU with this comprehensive guide.

The share of electric cars in the European market is growing steadily, and with it comes a range of opportunities for used car traders.

If your dealership handles electric vehicles (EVs), you should get familiar with the latest tax incentives and benefits available in 2025.

The incentives, such as tax exemptions and subsidies, can directly impact your pricing strategies, costs, and overall profits, so staying informed is vital for your success.

But before we dive into country-specific incentives, we’ll first go over a quick glossary of key terms you’ll see across this article, government documents, and tax guidelines.

Glossary of terms

You’re probably already familiar with most of these, but since they’re sometimes used inconsistently across different sources, we’ve put together this overview to keep everything clear and consistent.

• BEV - Battery electric vehicle: A fully electric car powered by a battery and electric motor.
   
• PHEV - Plug-in hybrid electric vehicle: A hybrid car with a battery that can be charged by plugging in and a combustion engine for backup.
   
• HEV - Hybrid electric vehicle: A car powered by both a combustion engine and an electric motor, without the option to charge by plugging in.
   
• FCEV - Fuel cell electric vehicle: A car powered by hydrogen fuel cells that generate electricity for the motor.
   
• EREV - Extended range electric vehicle: An electric car with a small backup engine that generates electricity to keep the battery charged and extend the driving range.
   
• M1 - Passenger car: A category of vehicles designed for carrying passengers, typically with up to eight seats in addition to the driver.

Knowing these terms will help you understand various incentives and how they apply to your dealership’s business.

Electromobility incentives and tax benefits in the EU by country

While there are EU-wide goals to promote electric vehicles, each country has its own specific incentives and tax benefits.

That’s why you should understand the market you’re selling in and familiarize yourself with these measures, as they can impact the demand and value of used electric vehicles.

France

Tax benefits and incentives for EVs are seeing some changes, and here’s the latest info. For starters, the country is cutting its EV subsidy budget (called bonus écologique) from 1.5 billion euros to 1 billion euros in 2025.

When it comes to specific figures, the new subsidy system will offer support between 2,000 and 4,000 euros per vehicle, depending on the buyer’s income. That’s a reduction from the previous range, which went as high as 7,000 euros.

Also, the malus tax is becoming stricter to encourage buyers to get low-emission vehicles.

The details of the malus tax vary by region, but in many regions, alternatively powered vehicles are either fully or partially exempt (up to 50%) from this tax.

Specifically, BEVs, FCEVs, and PHEVs with an electric range over 50 km are entirely exempt from the weight-based malus.

Lastly, France has developed a scrappage scheme that makes EVs more affordable. By trading in an old car, low-income households can receive up to 5,000€ while other households and companies can get 1,500€ when buying a BEV or a FCEV priced below 47,000€.

All in all, even though France is cutting back on EV subsidies and some incentives aren’t as generous as before, the emphasis on tax exemptions and scrappage schemes still keeps EVs a solid and appealing choice.

Germany

In 2025, Germany will work on increasing the budget for sustainable mobility. The government has introduced a special tax benefit for companies buying electric vehicles (EVs), which will be retroactively applicable from July 1st and extend through 2028.

The benefit lets companies write off a bigger part of the car’s cost in the year they buy it. This reduces their taxable income, making EVs more affordable for businesses.

The maximum price for EVs that qualify for favorable tax rules is increasing from 70,000 € to 95,000 €, so higher-priced EVs are now included.

Also, the deadline to qualify for Germany’s ten-year vehicle tax exemption is approaching, as BEVs and FCEVs registered by December 31 2025 get a ten-year property tax exemption. You can read more about the exemption and other car taxes in Germany in our guide here.

The German benefits go beyond just vehicles.

From January 1, 2025, the government will offer tax cuts on electricity and big reductions (60-85%) on grid fees. These cuts will encourage bidirectional charging, where EVs can both charge and send energy back to the grid.

Netherlands

One of the key taxes in the Netherlands is “Belasting van Personenauto’s en Motorrijwielen”, often shortened as BPM. Commercial vehicles used to be exempt from BPM, but starting from January 1, 2025, this exemption will end for diesel and gasoline-powered commercial vehicles.

Note that EVs will still remain exempt from the BPM, making them a more attractive option for buyers and dealers.

Regarding other exemptions, EVs also benefit from favorable road tax policies. Here’s an overview of the motor vehicle tax (motorrijtuigenbelasting, MRB) for EVs over the years:

• 2024: EVs are fully exempt from road tax.
• 2025: A 75% road tax discount applies to EVs.
• 2026-2030: Discounts gradually decrease, ending in 2030 when EVs will pay the full road tax rate.

There’s also the Subsidy scheme for zero emission commercial vehicles, SEBA. This incentive provides businesses with a subsidy of up to 10% of the list price, capped at €5,000, for purchasing or leasing new electric commercial vehicles. This program is available until December 31, 2025.

In addition to these incentives and exemptions, EV owners benefit from reduced ownership taxes. From 2025, fully electric cars will pay 25% of the standard rate of the ownership tax, increasing to 100% in 2026.

Italy

In Italy, 2025 will primarily bring changes to non-electric vehicles. Specifically, traditionally fueled company cars will face a higher taxable base.

Conversely, EV company cars will benefit from a reduced taxable base, decreasing from 25% to 10%, while PHEVs will see a reduction to 20%.

While 2025 won’t bring changes to EVs regarding the Ecobonus, the existing benefits will still remain in place. The Ecobonus measure offers up to 6,000 € for purchasing an EV when scrapping an old vehicle, or up to 4,000 € without scrapping, applicable to vehicles priced under 50,000 € (excluding VAT).

Lastly, EV owners enjoy significant ownership tax exemptions. EVs are exempt from the annual ownership tax for the first five years after registration. After this period, they benefit from a 75% reduction in the tax rate compared to equivalent petrol vehicles.

Spain

Although the initiative for sustainable mobility Moves III has ended in 2024, there are other incentives that will continue making EVs in Spain affordable in 2025.

For instance, personal income tax breaks for EVs allow individuals to claim a 15% tax break on their income tax when buying an electric car, with savings of up to 20,000 € per vehicle. This benefit will be available until December 31, 2025.

There are also registration tax benefits that exempt vehicles emitting 120g CO₂/km or less from the special registration tax.

The road tax also offers big savings for EV owners. In major cities such as Madrid, Barcelona, Zaragoza, and Valencia, BEVs benefit from a 75% reduction in the road tax.

Belgium

Belgium has multiple ways of supporting greener mobility, but specific incentives and benefits depend on the region.

For instance, in Flanders, BEVs and FCEVs are completely exempt from the registration tax. In Brussels and Wallonia, these vehicles only pay the minimum registration tax of 61.50 €.

Additionally, Flanders offers an exemption from the annual road tax, while in Brussels and Wallonia, EV owners only pay the minimum rate of 97.68 €.

When it comes to benefits for businesses, expenses for BEVs and FCEVs are fully tax-deductible for businesses and self-employed individuals until the end of 2026. After that, the deduction rate will start to decrease.

How to purchase an electric vehicle with eCarsTrade?

Judging by these incentives, demand for EVs is continuing to grow. And with more new vehicles entering the market, the selection of quality used EVs is expanding.

If you’d like to stock your dealership in a hassle-free way, you should try an online used car auction platform like eCarsTrade.

You’ll start by registering your dealership and searching cars by fuel type. You can select EVs and hybrids, including petrol/electric and diesel/electric options.

When you find vehicles you like, you’ll proceed with checking their appraisal reports and service history.

That way, you’ll be able to make informed decisions and buy only those vehicles whose condition, battery performance, and maintenance records meet your dealership’s needs.

Then, you’ll place your bid. You can use the eCarsTrade bid calculator to see how likely you are to win the auction, and what the final price (including all the fees) will be.

If you win the auction, we’ll buy the EV on your behalf. But if you’d like to skip the bidding process altogether, there are always ex-lease cars for sale at fixed price that you can choose from.

Whichever buying method you prefer, you can find a wide selection of previously owned EVs that will help you attract more eco-conscious buyers.

Comparison of EV incentives across EU countries

Fortunately, there are many benefits available for EV owners across the EU. A bit less fortunately, these benefits vary widely by country, making it tricky to navigate the rules.

To help you quickly compare the key advantages for EV owners and businesses, we’ve summarized the information in the table below.
 

European EV sales in 2024 - in a nutshell

2024 was certainly a dynamic year for those in the automotive industry across Europe.

While EVs have become more popular, not all types performed equally. Most markets saw a rise in PHEV sales. BEVs, on the other hand, had a slower growth, but that might change soon because several key markets are planning tax exemptions for 100% electric vehicles.

All in all, it’s clear that European governments are focusing on EV incentives and tax breaks, which could mean that we’ll see a significant boost in demand in the near future. If you also consider how the charging infrastructure is constantly improving, you’ll see that it’s a great time for used car dealers to start investing in EVs.

So, why wouldn’t you let eCarsTrade help you stock your dealership with quality EVs, and you can focus on selling them!

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