State support for e-vehicle purchase not seeing huge uptake

Electric vehicle charging station in Tallinn.
Electric vehicle charging station in Tallinn. Source: Siim Lõvi/ERR

Despite state support, electric cars in Estonia still cost significantly more than their fossil-fuel drive equivalents, and with the current economic situation, it does little to encourage uptake, according to some sector spokespersons.

Maris Salin, project coordinator at the Center for Environmental Investments (KIK) told ERR the support fund for electric cars has expanded to several times its original size. "The fund comes to a total of €7.75 million, one part of which is intended for private individuals and the other for companies," Salin said.

Close to 300 people purchased a new electric car, using the assistance of the state support program, in the first five months of this year.

Nonetheless, the fund has not been exhausted by any stretch. Meelis Telliskivi, CEO of the Association of Car Sales and Service Companies (AMTEL), said that: "Nowadays, with families' budgets getting tighter as the result both of a rise in interest rates and in inflation, while support can sometimes be helpful, it is certainly not the determining factor in making a purchase right away, these days."

About 6 percent of the cars on the roads in Estonia today are electric vehicles.

That the proportion is not higher, motoring journalist Tõnu Ojala says, is partly because support subsidies only apply to new, and not used, vehicles.

Ojala said: "Looking at the fact that half of the cars that are sold in Estonia are still used cars, it concerns a small group. Last year it was about 40 percent, and also car exchanges within Estonia, the sale of new cars is - there is nothing to be done - a niche product."

Maris Arro, adviser at the new Ministry of Climate, said changing the conditions of the support for e-cars is not currently on the table.

"If we're talking about new cars, the prices of electric cars and those which use a internal combustion engine are currently reaching parity, but not in a direction where electric cars are getting cheaper; in fact, cars with an internal combustion engine are getting pricier," Arro said.

Motoring expert Arno Sillat said the average electric car last year cost around €70,000. 

This year, the most-bought electric car is the iconic Tesla, whose entry-level prices start at €40,000 for a new vehicle. Maris Salin at KIK said that people mostly request support for electric cars in the €40,000-50,000 range, ie. the lower-priced models.

AMTEL's Meelis Telliskivi said the €4,000 subsidy exerted no real effect on the market, adding those who have now purchased an electric car would have done so even if the subsidy did not exist.

Uptake of this support measure has been slow, since a round of support introduced for purchasing electric vehicles introduced four years ago, which were all snapped up in the space of a day.

The difference, Arro noted, is that the previous support measure was granted ahead of a purhcase, which sometimes resulted in the recipient deciding that they did not want to buy an e-vehicle after all.

The state now supports the purchase of a new electric car with €4,000, on a vehicle costing €60,000 exclusive of VAT. This measure is applied post-purchase, and not before.


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Editor: Andrew Whyte, Mait Ots

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