Fancy an electric car for free? There's only one catch: you will need to move to Germany.
Tax exemptions for electric cars in parts of Europe are now so generous it is possible to lease a brand-new zero-emissions vehicle at almost zero cost.
German dealership Autohaus Koenig has begun advertising Renault Zoe leases for “free” – after a deposit of €3100 ($AU5060) – thanks to new government rebates.
According to its website, the 24 monthly instalments of €125 (just over $AU200) are completely offset by the "state subsidy for environmental bonus" and an "innovation bonus".
In Australia, the same car costs from $47,490 plus on-road costs.
Renault Zoe as advertised for 'free' by Autohaus Koenig in Germany. The €125 monthly fee is offset by government subsidies.
Generous German subsidies have also slashed the price of Mini Cooper Electric, to the equivalent of as little as $AU43.50 per week - roughly a quarter of the minimum weekly payment plan in Australia, according to a recent report by news.com.au.
There is no explicit requirement for EU member states to offer subsidies or tax incentives for electric vehicles, however Lithuania is currently the only country in the bloc that does not do so in any capacity.
Dr Anna Mortimore, a lecturer at Griffith University’s department of accounting, finance, and economics, achieved her PHD in 2014 researching "the use of economic instruments in managing the environmental externalities of road transport".
Dr Mortimore told CarAdvice car companies in Europe have been incentivised to produce more electric vehicles in an effort to lower the average emissions across all the cars they sell.
From 2021, new regulations will require the average emissions of all vehicles sold by each manufacturer to not exceed 95 grams of carbon dioxide for every kilometre travelled.
"Most (petrol or diesel) vehicles can’t reach this figure, which means car manufacturers need to increase supply of electric cars to offset the ... emissions in the rest of their fleet," said Dr Mortimore.
"While regulatory standards have incentivised the production of greater numbers of (electric cars) to lower their overall emission averages, governments, in return need ... policy measures to encourage buyers through incentives."
It was also possible to discourage the purchase of conventional petrol or diesel cars by taxing them based on CO2 emissions, said Dr Mortimore.
Australia does not currently offer any federal tax exemptions or subsidies for the sale of electric cars.
As a result, the cheapest fully electric vehicles on sale in Australia are the Renault Zoe from $47,490 plus on-road costs, the Hyundai Ioniq from $48,970 plus on-road costs, and the Nissan Leaf from $49,990 plus on-road costs.
Dr Mortimore says there are some instances where subsidies are not necessary to persuade consumers to go electric.
“Norway, which does not subsidise EVs, but instead waives the 25 per cent VAT and other relevant vehicle taxes, has proven to be highly effective," said Dr Mortimore, while pointing out two-thirds of new vehicles sold in Norway last month were electric cars.
“It is about balancing economic instruments, consumer incentives, and regulations – this is most important if we want to encourage consumers to transition from what they are familiar with,” said Dr Mortimore.