Germany has announced a plan to subsidize electric cars, with manufacturers footing part of the bill. The total €1.2 billion subsidy pool will be offered on a first come first served basis for vehicles priced less than €60,000.

From May, German car buyers will receive a subsidy of €4,000 when buying an electric car. The incentive will stay in place until no later than 2020.

The electric car market in Germany remains small, with just 23,481 electric vehicles sold last year. The government hopes this subsidy will boost sales to get half a million new electric cars on the road in the next four years.

Which countries are doing the most to encourage electric cars?

 Upfront incentives for EVs in major auto markets
Image: Financial Times

As this chart shows, several of the world’s largest auto markets are incentivizing people to switch to electric vehicles. Germany is now one of them.

Here is a snapshot of the situation in four countries around the world:

China

The emerging middle class in China represents a significant market for electric vehicles. Sales are on the up, boosted by a generous incentive programme. Infrastructure investment also aims to boost electric car ownership. Beijing plans to install more than 400,000 charging points by 2020.

A Chinese firm has also just announced an electric car that can be voice-controlled, giving it autonomous capabilities. The LeSEE reportedly drove itself out of a shipping container and on to a stage, under the control of the manufacturer’s CEO, Jia Yueting.

Electric vehicle sales in China 2011-2015
Image: Bloomberg

United States

The situation in the US is complicated by differences between states. However, national incentives do exist. A tax credit system is in place, with the level varying based on the type of battery and vehicle weight. According to the US Department of Energy, the credit is anywhere between US$2,500 and $7,500.

The announcement of Tesla’s new Model 3 also highlights the continued role of American companies in the electric vehicle market.

Netherlands

Subsidies and investment in infrastructure saw more electric vehicles sold in the Netherlands last year than in any other European country.

Electric vehicles are exempt from road tax, and further tax breaks are available on the purchase of new vehicles. The development of the necessary infrastructure is also driving sales. The E-laad Foundation (or E-load, if translated into English) is aiming to boost the number of electric charging points across the Netherlands.

Norway

Norway is often credited with leading the world in the charge towards electric vehicles. Although not a major auto market, the sales of all electric vehicles are reportedly growing faster than anywhere else. Very generous incentives, such as exemptions from value-added tax and free travel on toll roads, have been so successful that last year the Norwegian government was forced to review them.

This chart from the first quarter of 2015 shows the growth in the electric vehicle market in Norway.

 Norway leads the world's electric vehicle market
Image: Statista