financial incentives making electric cars financially accessible explains the strong sales volumes 336000 cars and growth rate 40 per cent in 2016 compared to 2015 according to an iea report however in its 201620 plan the chinese government was expected to cut subsidies for evs by 20 per cent from 2017 onwards china has also suffered a widespread subsidy scandals in the last few years according to a report by reuters china had recovered 334 million from companies that cheated the federal government and a number of states offer financial incentives including tax credits for lowering the upfront costs of plugin electric vehicles also known as electric cars or evs united states of america according to us department of energy the federal government offers tax credit of 2500 to 7500 for every new ev purchased for use in the us the size of the tax credit depends on the size of the vehicle and its battery capacity this tax credit will be available until 200000 qualified evs have been sold in the us by each manufacturer at which point the credit begins to phase out for that manufacturer currently no manufacturers have been phased out yet according to us energy department website the other advantage may include additional tax credits vehicle or infrastructure rebates or vouchers vehicle registration fee reductions loans special lowcost charging rates and highoccupancy vehicle lane exemptions depending on the region and states japan japan last year introduced a new subsidy system that grants a maximum subsidy of up to 7700 for a nissan leaf with a 30kwh battery the purchase incentive amounts to 3000 bev sales typically with larger batteries and higher electric ranges than phevs in 2016 increased by almost 50 per cent while phev sales dropped by 34 per cent according to the iea report the other factors that explain this market evolution include the introduction of the new nissan leaf in 2016 as well as the negative influence of allegations of falsifying fuel economy standards of mitsubishi models the netherlands the netherlands has adopted a liberal incentive approach and make the co2 reduction as main criteria however the recent change in the tax on evs is going negative here zeroemission cars are exempted from registration tax while according to iea cars with co2 emissions per km corresponding to a phev were subject to 6 per g co2km tax rate in 2016 this will increase to 20 per g co2km in 2017 zero emission vehicles pay 4 per cent income tax on the private use of a company car while the rate for phevs increased from a 714 per cent range in 2015 to a 1521 per cent range in 2016 and will increase further to 22 per cent ie the same rate as conventional cars by 2017 there is a strong likelihood that these changes in taxation are one of the reasons for the decline in phev sales from a recordhigh 10 per cent of total car sales in 2015