The shift to electric vehicles is a global movement, with nations around the world deploying incentives, policies and measures to support the transition.
More than 120 nations have announced plans to hit net zero in the years up to 2050 and a switch to electric cars plays a key role in reducing global emissions. As such over 20 countries have committed to phase out the sale of internal combustion engine cars in the next 10 to 30 years, including some smaller, emerging economies
To achieve this, though, each country’s car market and economy has its own unique set of circumstances that dictate which government policies works best. For example, the automotive powerhouse of Germany is somewhat different to an emerging territory like Brazil.
So, is a carrot better than a stick? Is it vehicle affordability, access to charging infrastructure or fear, uncertainty and doubt that is slowing EV adoption down?
It’s the job of policy makers to answer these questions and recognise how they can impact new car registrations and accelerate the uptake of battery electric vehicles, while balancing the government’s books and hitting net zero targets.
EV sales around the world
Before we dive into the different policies being used around the globe, let’s look at the global EV outlook. Spoiler alert… it’s actually going pretty well.
That’s according to the International Energy Agency report for 2025. In 2024, electric car sales rose by more than a quarter to over 17 million and in fact, the additional 3.5 million EVs sold in 2024 compared to 2023 exceeds the total sales in 2020.
This rapid growth over the last five years means the global EV fleet is now almost 58 million (that’s about 4% of the total passenger car fleet). Driving and charging these electric cars displaced over a million barrels of oil consumption in 2024, showing how transformational the EV switch can be for climate change.
China leads the way both in total sales and growth where 1 in 10 cars are now electric, ahead of Europe (around 1 in 20). EV sales in Europe have stagnated a little in the past year as subsidies have been phased out and targets paused – more on that shortly. In the US, sales also increased although at a slower rate. But beyond these three key markets, EV sales increased by nearly 40%.
And in 2025? The forecast remains strong. In the first quarter, over 4 million EVs were sold (that’s up a third on last year) with the full year prediction standing at about 20 million global sales, accounting for around 1 in 4 new car registrations.
Any prediction is of course dependent on economic and government policy. So let’s explore that a little more.
Electric car government policy in other countries
Financial incentives and tax breaks to kickstart EV uptake have been implemented across the world, from as early as the 1990s in some forward-thinking countries.
Originally, these were designed to bridge the gap between the cost of electric cars compared to petrol and diesel cars. This was very much the carrot, offering benefits to help consumers make the green choice.
As EV sales have continued to grow, this financial support has been gradually phased out. Government funding accounted for under 7% of EV spending in 2024, down from 20% in 2017.
And as the carrot has been withdrawn, the stick has been introduced. Ever-tightening regulatory policy around CO2 emissions means that mandatory EV sales targets have been set to further promote electric vehicle adoption.
Electric vehicles in China
China is the global leader in EV uptake and that’s down largely to its ability to offer affordable EVs manufactured in the country. On top of that, China introduced a trade-in scheme in April 2024 to boost the new car economy. It offered a discount to anyone trading in an older vehicle and buying new.
While it applied to those buying a new internal combustion engine car, the discount was higher for EVs. For those switching to a new electric car, they could get around £2,000 off compared to £1,500 for a petrol or diesel car. It’s estimated that over six million Chinese drivers took advantage of this scheme, with 60% choosing an EV.
EV policy in the EU
The last two years have been a time of change for EV policy, causing the overall market to flatline in 2024 rather than grow, with 1 in 5 new car registrations in Europe powered by electric.
While half of EU members states recorded an increase, it was in the larger markets where EV sales stalled.
For example, Germany cut its €4,500 subsidy to zero in 2023 causing a sharp decline in sales. In response, the German lawmakers introduced new tax benefits that run until 2028 for businesses going green to support the huge company car market in the country.
Similarly, France has also scaled back its EV subsidy package, limiting the amount available to high-income car buyers and reducing the number of eligible cars.
The EU market was also potentially hindered by its CO2 targets, which run on a five-year cycle. It meant car makers had little incentive to push sales in 2024 ahead of expected new, tougher targets being introduced in 2025.
To counteract this, a proposal has been introduced for the automotive sector that averages emissions performance over a rolling three-year period.
Policy making in Norway and why it leads the EV market
Although in Europe, Norway is not in the EU and as such has long been the poster child of EV adoption. It was the first country to introduce government incentives and tax breaks in the 1990s and has twinned these supporting measures with mandatory policy.
It’s worked, too. In 2025, Norway expects to hit its target of 100% of new car sales being electric (in 2024 that number was 88% and rising).
The learning from Norway is that not one singular policy works, but that a continued and consistent action plan is needed to drive the change and create consumer confidence.
Yes, it helps that Norway is a very wealthy country and was able to invest in tax breaks and large-scale charging infrastructure projects, but it also prioritised electric vehicles early and followed through on its ambitions.
EV adoption in the UK
The UK is a huge new car market and there are now over 1.5 million EVs on British roads. In 2024, 1 in 5 new car registrations (or 19.6%) in the UK were powered by electric making it the biggest EV market in Europe last year.
That’s a significant number as 2024 was also the first year of the UK’s ZEV mandate rules, which dictates the percentage of EV sales for manufacturers in each year up the target of 100% in 2035, when the sale of new petrol and diesel cars will be banned.
In 2024, the target was 22% of all new registrations to be electric and although the UK fell short, the ZEV mandate system allows some flexibility for OEMs to ‘borrow’ credits from future years. That means predictions and forecasts of EV growth are less certain but, in the longer term, if targets are missed then manufacturers face hefty penalties.
The ZEV mandate is helping to drive the EV transition in the UK after all the subsidies and grants were removed in 2022 for private cars. And in April 2025, the UK also removed its tax breaks for electric cars. What do remain, just as in Germany, are incentives for businesses to switch company car fleets and vans to electric.
EV sales in the US
For a nation built on gas-guzzling muscle cars, the US has embraced the EV shift, especially with the continued success of Tesla. In 2024, EV sales grew to 1.6 million – around 10% of the market, helped by the release of over 20 new models in the country.
To incentivise Americans to go green, the US Clean Vehicle Tax Credit gives buyers a discount of up to $7,500 for a new EV and $4,000 off a used EV, and the policy even extends to leased vehicles. On top of the federal assistance, over half of US states offer tax rebates and exemptions for those wanting to buy an EV.
However, the US EV outlook is the most uncertain with the Trump administration recently tabling legislation that would end the Clean Vehicle Tax Credit, while the introduction of tariffs could impact sales.
Policy making in emerging EV markets
While total sales are smaller than the larger car buying countries, the EV outlook is actually extremely strong in emerging markets.
Overall, emerging and developing economies in Asia, Latin America and Africa have increased by 60% in 2024, doubling the share of market. That’s thanks to a combination of tax exemptions, government subsidies, reduced traffic restrictions on EVs, high fuel prices and affordable models.
Many emerging markets in recent years have also offered tax breaks, such as reduced VAT, to OEMs that commit to manufacturing electric vehicles in the region. Not only does this boost the economy but it also provides affordable electric models to consumers.
And in recent years, several new local brands have appeared, such as VinFast in Viet Nam, Togg in Türkiye, and Tito in Argentina, further adding to the pool of affordable electric vehicles in certain territories.
Creating a global charging infrastructure
As electric vehicle sales increase, it’s vital that the charging infrastructure is expanded to meet the growing demand. A widespread charging network can also give drivers the confidence to make the switch in the first place.
Just as governments have supported consumers with financial incentives across the globe, so too have senior civil servants rolled out measures to boost investment in a public charging network, to assist owners who want to install home charging points and to amend planning legislation to future-proof new builds.
Last year, more than 1.3 million public charging points were installed around the world – that’s the same number that were available globally in 2020. This rapid growth is helping infrastructure keep pace with EV rollout – in China there is now more than 1 public charger for every 10 EVs, while in the EU it’s 1 per 13 electric vehicle.
The deployment of chargers in Europe will continue to grow with the Alternative Fuels Infrastructure Regulation (AFIR) mandating EV charging stations capable of at least 150kW to be installed every 60km along the Trans-European Transport Network (TEN-T) – the backbone of EU road travel – with policy in place to increase speed over time.
The EU is also reforming its Renewable Energy Directive (RED) that governs how the EU will achieve its 2030 and 2050 climate goals.
The new policies will mean charge point operators (CPO) in all countries can claim credits for the clean energy it sells to EV customers, therefore making EV charging an attractive investment opportunity, reducing the need for government support to install charging infrastructure and accelerating the opening of new public charging points.
The eCredits policy has been in place in the Netherlands and Germany since 2015 and 2017, respectively and its success is evident in the statistics – around 50% of all charging points in the EU are concentrated in these two nations. Meanwhile, France, which introduced eCredits in 2022 has seen a huge increase in CPO investment over the last two years.
In the UK, under the Renewable Transport Fuel Obligation (RTFO), CPOs are still excluded from claiming credits, with the legislation only focusing on biofuels, and putting the UK at a disadvantage compared to its European neighbours.
Alongside RTFO changes, other proposed polices in the UK, such as reducing VAT on public charging to bring it in line with home charging and better EV signage, could be cost-effective solutions to further drive confidence in going electric.
Ultimately, the development of a widespread and accessible charging network goes hand in hand with purchase incentives to drive EV adoption, with governments, OEMs, charge point operators working collaboratively.
Only through finding the winning combination of incentives, policy and measures can EV uptake be accelerated to meet net zero ambitions and tackle the global climate emergency.
