EU Considers German Chancellor Olaf Scholz’s Proposal Of Europe-Wide EV Incentives

The European Union is drafting bloc-wide incentives for electric vehicle purchases to aid struggling automakers, German Chancellor Olaf Scholz announced at Davos. He emphasized that Europe must strengthen its economy, boost industry competitiveness, and reduce bureaucracy in response to global challenges, according to Bloomberg.

Scholz said last week: “What we need are pragmatic solutions, not ideological ones. And that is why I am delighted that the president of the commission has now taken up my proposal for harmonized Europe-wide purchase premiums for e-cars.”

Scholz criticized efforts to undermine EV adoption, emphasizing that „e-mobility is the future” and warning against harm to the auto industry. Ahead of next month’s snap elections, his Social Democratic Party is proposing temporary tax deductions to boost German-made EV purchases.

But the road to EU-wide purchase incentives for EVs still has some bumps in it, according to follow up reporting by electrive.

They wrote this week that the EU is exploring harmonized EV incentives, but their implementation and structure remain uncertain. Proposals range from unlimited purchase premiums to socially targeted incentives, while Germany’s Chancellor backs temporary tax cuts for German-made EVs, though their legality under EU law is unclear. The CSU party has suggested a €3,600 purchase premium.

In Davos, Scholz reaffirmed that electric mobility is the future, warning that doubters harm the industry. EU Commission President Ursula von der Leyen echoed his view, emphasizing the importance of staying competitive in clean technologies.

Despite conservative pushback on the 2035 ban on new fossil-fuel car registrations, von der Leyen has stood firm, as alternatives to EVs are unlikely to mature in time.

As the report concludes, EU-wide incentives aim to bolster competitiveness against China and the US, but designing a WTO-compliant system that excludes subsidies for Chinese manufacturers remains a complex challenge.