Subsidies remain essential for healthy EV sales for now, but expect gradual reductions

Higher price points and customer concerns mean that EV subsidies remain an important tool in driving electrification, but there are other tools governments can consider. By Xavier Boucherat

Compared with internal combustion engine (ICE) vehicles, the average electric vehicle (EV) costs between €5,000 (US$5,865) and €10,000 more to make: the comparatively small scale on which they are made means battery and electric drivetrain prices remain high. This means higher numbers in the showroom, and to date, no automaker can truly claim to have put a widely affordable EV on the road. This, coupled with concerns such as range anxiety, makes the EV unappealing for some. As such, subsidies, grants and schemes have played a key role in bringing the cars within reach of consumers, with some governments knocking thousands off a price-tag in an effort to drive sustainable, zero emission mobility.

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