Expensive Fuel Accelerates the EV Revolution in Europe

Sales of electric cars in Europe are increasing, and analysts predict the continuation of this trend as high fuel prices, further burdened by conflicts in the Middle East, drive consumers away from traditional internal combustion engines. European countries have been supporting this transition for years, but the current energy crisis triggered by the war in Iran has further emphasized the importance of government incentives in reducing dependence on fossil fuels.

France Leads

France is one of the most prominent examples of such a policy. The second-largest economy in Europe will nearly double its allocations for electrification, increasing its annual budget from the current €5.5 billion to as much as €10 billion by 2030. At the same time, a social leasing program for 100,000 vehicles has been introduced to make electric cars accessible to those who could not afford them until now.

The plan presented by Prime Minister Sebastien Lecornu includes strong subsidies for vehicles and infrastructure, as well as an innovative social leasing program aimed at enabling citizens with lower incomes to transition to electric drive.

Data from the European Automobile Manufacturers Association (ACEA) confirms that the market share of electric vehicles in the European Union reached nearly 19 percent in the first two months of 2026. Although almost all EU member states offer certain tax incentives, the amounts and models of support vary drastically.

Italy and Cyprus currently have the strongest direct incentive systems, where subsidies conditioned on scrapping old vehicles can reach €11,000 and €20,000, respectively. Slovenia offers up to €7,200, while Germany and France tie their incentives to household income levels.

On the other hand, there are countries that do not offer spectacular amounts but create a system in which owning an electric vehicle is more cost-effective in the long run. Norway leads in this regard, having practically eliminated taxes on electric cars, resulting in the share of electric vehicles in that country exceeding 95 percent. A similar model is applied by countries such as Bulgaria, Cyprus, Portugal, Greece, and Hungary, which completely exempt owners from registration fees and annual road taxes.

The Croatian Model

In this context, Croatia acts as a typical example of unfinished policy. Formally, the amounts of incentives are not negligible. Through the Environmental Protection and Energy Efficiency Fund programs, citizens can receive up to approximately €9,000 for the purchase of an electric car, with a limit of about 40 percent of the vehicle’s value. However, the key problem is not the amount of incentives but the way they are allocated.

The latest call from 2026 was opened on March 10 and was practically completed that same morning. The allocated funds were exhausted in just a few minutes, which has become a standard pattern. The system in practice operates on the principle of ‘first come, first served’, often through applications via dealerships, making the purchase of an electric vehicle resemble a race rather than a planned investment.

Electric vehicles are generally exempt from special motor vehicle taxes, but a broader range of benefits has not been systematically resolved. Tax incentives and operational benefits, such as preferential parking, exist only partially and depend on local decisions, which further reduces predictability for buyers.

Experts from ACEA emphasize that price accessibility is the key tipping point. Without government interventions that lower the entry barrier, infrastructure and the breadth of model offerings alone will not be sufficient to achieve the climate neutrality that Europe aspires to. Incentives serve not only as financial assistance but also as a guarantee of security that builds consumer trust in the technology of the future at a time when the geopolitical situation and energy markets are constantly changing.