In Germany, expanding the market for used battery electric vehicles (BEVs) is likely to play an important role in broadening access to these vehicles. As the purchase price of used BEVs can still be cost prohibitive to some groups, a larger supply of used BEVs may help to improve their affordability. So, what is the current state of the used BEV market in Germany and what can the government do to accelerate its expansion?

According to the Kraftfahrt-Bundesamt, or the Federal Motor Transport Authority of Germany, in 2022, used BEVs were around 69,000 of the 5.6 million vehicle ownership transfers that occurred in Germany, a 1.2% share (Figure 1). In comparison, BEVs were 17.7% of the over 3 million new vehicles that were registered that year. In 2023, the share of BEVs in used car transfers rose slightly to 1.6%, and for new vehicles, BEVs were an 18.4% share.

The number and share of used BEVs in vehicle ownership transfers rose through most of 2023. The highest recorded share of BEVs in the used vehicle market that year was 2.3% in September, when over 11,400 vehicles were transferred. The increasing number of used BEVs in the market is reflective of the higher number of BEVs that entered the stock starting in 2020, as the average holding period for leased cars is around 2 to 4 years for company cars and 6 years for privately owned cars. In 2020, BEVs were 0.3% of the nearly 48.8 million vehicles in the on-road stock in Germany and that share reached 2.1% in 2023.

As shown in Table 1, the growth of used BEVs from 2022 to 2023 (+40%) outpaced the overall markets for new and used cars, which both grew by 7% during that period. The only fuel types that had higher growth shares than used BEVs were used plug-in hybrid vehicles (PHEVs) and used hybrid vehicles, both of which saw higher year-to-year share increases with 45% and 44%, respectively. New hybrid vehicles also saw a higher growth rate of 43%. That new PHEVs shrunk by 52% from 2022 to 2023 was likely due to the phaseout of the PHEV purchase incentive at the end of 2022. Among internal combustion engine vehicles (ICEVs), the number of used gasoline car registrations grew by only 2% compared with new registrations at 13%. Used diesel cars grew by a larger margin of 10%.

In 2023, AutoScout24, the largest European online vehicle marketplace, reported that prices of used BEVs dropped substantially while prices of used gasoline and diesel vehicles stayed relatively constant (Figure 2). From January to November 2023, the index price, or the weighted average price over time, of used BEVs fell by 23%; for used gasoline and diesel cars, prices dropped by 6% and 2%, respectively, over the same time period. This is likely due to a growing supply of used BEVs for sale and a larger number of more affordable, non-premium BEVs being available for purchase.

• A BEV mandate for fleets would require that corporate fleets be made up of a specific percentage of new BEVs within a designated time frame. This would have broad climate benefits, as fleets in Germany made up roughly one-third of all new vehicle registrations in 2022. Beyond the environmental benefits, adding thousands of new BEVs to the on-road stock would be a boost to the secondhand market. The companies that purchase BEVs would also save money over time because of the lower total operating costs of BEVs when compared with gasoline and diesel ICEVs.
• A bonus-malus system would levy fees on the purchase of ICEVs and use the funds to provide financial incentives to purchase BEVs. If designed to be revenue-neutral, the system could be self-sustaining and would not require funds from the government budget. A staggered bonus based on vehicle size, with larger bonuses for smaller vehicles, would also promote affordability because smaller cars are typically less expensive.
• Interest-free loans for used BEV purchase for those with lower incomes can eliminate the additional financial burdens that come from traditional loans with higher interest rates. Some countries, such as Scotland and France, offer interest-free or low-interest loans for the purchase of used BEVs. A program such as this in Germany could be designed to benefit those with lower incomes by capping eligibility based on the applicants’ taxable gross income. It additionally could promote smaller, more affordable vehicle models by limiting loan eligibility based on vehicle size and price.

Continued development of the used BEV market will allow more Germans who are dependent on a car to participate in the transition from ICEVs to BEVs. Taking actions to accelerate the growth of this burgeoning market will also help bring the country closer to accomplishing its climate goals.

India’s road sector is responsible for 90% of carbon dioxide emissions from transportation and the widespread adoption of electric vehicles (EVs) is a key measure to reduce these emissions. While fiscal incentives like tax credits and subsidies have been shown to aid in promoting EV adoption, non-fiscal incentives can also help lower barriers and encourage consumers to switch from conventional vehicles to EVs. Late last year, at an IEA training, I gave a talk about non-fiscal incentives in India and I’ll cover some of the highlights here.

First, our recent study shed light on the use and proposed use of non-fiscal incentives to promote EVs across Indian states and union territories up to September 2022. We compared this with fiscal incentives and, as illustrated in the chart below, found that most states have prioritized fiscal incentives over non-fiscal measures. Additionally, the only states that have proposed more than three non-fiscal incentives are Maharashtra and West Bengal—both have four non-fiscal incentives in their state EV policies. Between the two states, Maharashtra focuses more on policies that give EV drivers preferential status on the road than West Bengal.

Figure. Fiscal and non-fiscal incentives in the EV polices of states and union territories in India as of September 2022.

Maharashtra is worth dwelling on because it ranked second in India in terms of EV ownership (absolute number of vehicles across all segments) as of September 2023. The state’s efforts to deploy public charging stations were also evident in another recent ICCT study, which found Maharashtra topped all states and union territories in India in terms of public electric vehicle supply equipment (EVSE) stock. Maharashtra has proposed the following incentives: 

1. Creation of green zones  
2. Reserved parking for EVs  
3. Incentives for efficient charging infrastructure rollouts like digital transactions for mobility cards to aid EV users 
4. Allocation of public land for charging points 

Like Maharashtra, West Bengal has proposed creating green zones and incentivizing efficient charging roll-out strategies like mobility cards for EV users. It also suggests modifications in the building code for provisioning of EV charge stations in both private and commercial buildings; this would be incorporated as amendments for existing buildings and is also applicable to new buildings.  

By complementing fiscal initiatives with non-fiscal incentives, policymakers could expect a variety of benefits that are grouped into a few broad categories below. Non-fiscal incentives can help to: 

Enhance the likelihood of realizing the environmental benefits of EVs. When heavily polluting combustion engines are prevented from operating in a green zone, this bestows a privilege upon EV owners. Through such measures, governments and local authorities both reduce local pollution and create a sense of exclusivity and convenience for EV owners that can make the transition away from combustion vehicles more appealing. 

Support infrastructure development. Charging infrastructure is a critical component of widespread EV adoption. Governments can offer incentives to businesses and property owners to establish charging stations. Additionally, facilitating the installation of a charging network through strategies like issuing no-objection certificates in parking spaces, making public land available for charging, and organizing tenders can help stimulate the market for charging infrastructure. This ultimately benefits EV owners. 

Improve public awareness and understanding. Non-fiscal incentives can involve disseminating accurate information and promoting EV-related initiatives that help consumers make informed decisions and dispel uncertainties about the vehicles. Governments and civil society organizations can launch campaigns, workshops, and events to showcase the advantages of EVs, dispel myths, and address concerns about things like battery life during extreme weather, fire safety, range anxiety, and maintenance needs. For example, the Go Electric campaign was launched by the Ministry of Power and led by the Bureau of Energy Efficiency in February 2021; it created awareness of the consumer benefits of EVs at the national level and boosted the confidence of EV manufacturers and consumers alike.  

Foster collaboration and partnerships. This happens among stakeholders including automakers, utility companies, and local governments. By incentivizing EV partnerships, governments can encourage the development of innovative solutions such as vehicle-to-grid technology and smart charging systems. These collaborations can accelerate the growth of the EV market and provide consumers with enhanced features like advanced battery technology, improved safety, and services like wireless EV charging and seamless payment options. There is also the opportunity to share promising strategies for battery recycling and best practices for closing the loop of battery utilization. 

The states and union territories in India that have not yet focused on non-fiscal incentives in their EV policies have a good opportunity to look at the benefits described here. Fortunately for the climate and public health, there’s evidence that more are paying attention recently. Jharkhand notified an EV policy in October 2022 that provides lane and parking preferences to EVs. In November 2022, Manipur released a new electric mobility policy that includes reserved areas in tourism spots where the state is to provide transport services in an environmentally friendly manner by exclusively using EVs.  

Also, in a new EV policy that Tamil Nadu released in February 2023, the government is to declare six cities as EV cities. In each of these a small mobility program will be designed with a focus on EVs, and the program is to prepare a roadmap that includes the electrification of three-wheelers and buses in phases over 10 years.  

Similarly, Uttar Pradesh released EV manufacturing and mobility policy in November 2022. Green routes are to be identified in each district by 2025 and there are to be electric buses on each of these routes. Urban local bodies may identify spaces for reserved parking in public lots that contain EV charging.  

Non-fiscal measures such as the ones I discussed here can offer important benefits in the long run by supporting the EV transition. Policymakers in India and elsewhere would do well to consider steps to adopt them. 

About this event

The ICCT in collaboration with NITI Aayog is organizing a one-day workshop on Low Emission Zones (LEZs) in Indian cities. LEZs, designated areas where certain vehicles, particularly those with high emissions, are restricted or prohibited, have proven effective in reducing air pollution worldwide. Additionally, LEZs play a crucial role in promoting the adoption of electric vehicles, aligning with NITI Aayog’s proactive advocacy in this area.

Our workshop, in association with the Raahgiri Foundation & SUM Network, is scheduled for February 19, 2024 in New Delhi, and aims to raise awareness about LEZ benefits, discuss best practices for LEZ implementation in Indian cities, and formulate a roadmap for future actions.

The workshop will include discussions on the following topics:

1. The benefits of LEZs for air quality and public health
2. Case studies of successful LEZs from around the world
3. Experiences in implementing LEZs in Indian cities
4. Legal pathways for developing LEZs in India
5. The role of technology in supporting LEZ implementation

The workshop will, we believe, significantly contribute to ongoing efforts to improve air quality and enhance EV adoption in Indian cities.