Iceland cuts electric car grants by 20% from November

Electric car grants will fall by 20% from November 1, while the maximum price of eligible electric passenger cars will be cut from ISK 10 million to ISK 8 million, mbl.is reports, citing the Ministry of Environment, Energy and Climate.

The grant for each vehicle will drop from ISK 500,000 to ISK 400,000. For electric cars previously registered abroad and registered in Iceland within 12 months of their first registration abroad, the maximum grant will fall from ISK 400,000 to ISK 320,000. Vehicles that receive a grant may not be exported for three years after it is awarded.

Björn Víglundsson, sales director at car dealership Hekla, criticised the lack of advance notice and predictability. He said people in the industry need to plan orders and imports six to 12 months ahead, and that frequent changes to vehicle taxes and support schemes make that difficult.

Víglundsson said the energy support scheme had previously been designed to phase out gradually, with no changes planned for the coming New Year and an end date at the turn of 2027-28. He said there had been no public presentation of the latest proposals and that only two weeks remained before the changes took effect.

He said the impact on the market was difficult to predict. Electric cars account for close to 90% of new vehicle registrations by businesses and individuals, he said, adding that the changes would have at least some short-term effects, though their longer-term impact was uncertain. He said electric cars would generally remain more affordable to buy and run than vehicles using fossil fuels.