Working Paper

Emerging electric passenger car markets in Europe: Can Poland lead the way?

Poland is one of the largest passenger car markets in Europe by sales, ranking sixth among the countries of the European Union and European Free Trade Association. Yet, despite targets, strategies, necessary legal frameworks, and a strong industry in battery part production for electric vehicles, the uptake of the electric passenger car fleet has been comparably slow to date. A well-balanced mix of strong and reliable policy measures addressing the cost, charging infrastructure, and information gap could help to increase the share of electric passenger cars significantly in Poland.

A key policy in the initial phase is the offering of significant purchase and tax incentives for buyers of an electric car to make them economically attractive compared to conventional cars. The recently adopted purchase incentives for battery electric car purchasers, ranging between up to €4,400 for private individuals and up to €16,000 for businesses purchasing a delivery van, can bring down the costs at the time of car purchase. Yet, for private consumers opting for an electric car, cost parity at car purchase is only reached if comparing a BEV Nissan Leaf and a diesel Volkswagen Golf. The acquisition costs of a comparable gasoline Volkswagen Golf is €3,000 lower despite the bonus for BEVs. At the same time, the majority of the Polish population is unable to afford a new electric car without higher aid amounts or tax advantages.

Experiences from other countries such as Norway and Sweden show that reliable, stable, and significant tax advantages over combustion-engine cars can make electric cars highly attractive economically. To sustainably counter-finance these purchase premiums, malus taxes for purchasers of a car with high CO2 emissions could be established. In France and Sweden, such a bonus-malus system has helped to balance costs, lower the fleets CO2 emissions, and stimulate electric vehicle purchases. In the absence of a registration tax in Poland, excise duty could be based on CO2 emissions rather than engine capacity, levying higher rates for high emitting cars.

Extending the public charging infrastructure network in Poland will remain important in order to increase visibility and consumer convenience. In addition, government policies should address workplace and home charging opportunities and provide the relevant funding in the early adoption phase, as experience from other countries show that a large proportion of charging is done at home or workplaces.

Poland has the potential to serve as a model for other countries that are in the early stage of electric passenger car adoption. The implementation of strong policy measures and strategies can help to reduce transport-related CO2 emissions and improve local air quality. In addition, the growing electric vehicle market could help to keep and create new jobs in Poland, turning the country into a major center of electric vehicle production.