Polish subsidies boost electric cars

More than 40,000 electric vehicles (EVs) have been registered in Poland since the beginning of the year, up 70% compared to the same period of 2021. Of that figure, sales of electric cars were up 140% and hybrids 100%, according to the SAMAR Automotive Market Research Institute.

This is largely thanks to the rollout in late 2021 of a government subsidy scheme, called My e-car, for drivers who choose to lease EVs, with monthly installments often lower than for combustion engine vehicles.

Last November, Poland's state-owned National Fund for Environmental Protection and Water Management allocated 500 million zlotys ($125 million, €115 million) for subsidies for customers buying EVs. The program is aimed at reducing air pollutant emissions by lowering consumption of fossil fuels in transport, mainly via co-financing purchase or leasing of zero-emission vehicles. 

The subsidies are part of a wider electromobility campaign which aims to have more than 600,000 electric cars on the roads of the EU member state by 2030. Currently, only one in every 500 cars registered in the country is electric. By comparison, in Germany it's every 50th new car.

ElectroMobility Poland — an initiative of four Polish power companies — wants to lead the country into the era of electromobility, and is planning to build the first domestic EV in 2023. Poland already has a thriving e-car battery production industry. Niche e-car producers also exist as does an internationally renowned e-bus maker. 

'My e-car' scheme

The My e-car subsidy scheme significantly cuts long-term rental installments under the operational leasing method — a fixed monthly installment whereby drivers get a car that is ready to drive and only pay for the fuel.

The support is granted in the form of subsidies for the purchase of zero-emission vehicles and subsidies for fees specified in lease agreements. The subsidies are only available to individual customers, but companies, institutions and local governments will be able to apply in the future.

"The My e-car program is one of the decisive points," Wojciech Drzewiecki, the president of the SAMAR Automotive Market Research Institute, told DW. "E-cars also have quite high residual values, which enable companies to prepare good offers with more attractive monthly installments."

"The offer is becoming more comprehensive and attractive, which changes peoples’ minds," he added.

Hikes in fuel prices at gas stations resulting from the war in Ukraine have also meant drivers are looking more favorably at EVs.

Since the launch of the program, leasing firm Arval has received over 2,500 inquiries about subsidized vehicles and submitted 450 applications for subsidies to Bank Ochrony Srodowiska, which supports the program and has so far granted 40 million zlotys under the leasing method.

According to a recent survey conducted by car leasing firm Webfleet Solutions, over 60% of Polish corporate car fleet operators are interested in buying EVs over the next two to three years.

Nuts and bolts

The program applies to EVs with a price of up to 225,000 zlotys, or 211,000 zlotys net for people using the car in the so-called mixed method for both business and private purposes. The subsidy is 18,750 zlotys, or 27,000 zlotys when using the car for more than 15,000 km (9,300 miles) per year.

"Experience so far shows that if there were no subsidies, the sale of battery vehicles would remain at a much lower level," said Jakub Farys from the Polish Automotive Industry Association. As Poland is still at the "initial stage of popularizing EVs" he said subsidies are needed, adding that they could lead to a situation when their popularity will be so great that they are no longer necessary.

In 2021, the average price of a new e-car before tax was close to 200,000 zlotys In Poland. A combustion vehicle cost drivers about 135,000 zlotys on average.

"The biggest savings are related to both fuel costs and insurance," said Maciej Mazur, managing director of Polish Alternative Fuels Association.

Market limits

As far as leasing an EV in Poland is concerned, leasing firm Carsmile has calculated that monthly installments for a battery-powered Dacia Spring, for example, are over 100 zlotys (about €20) cheaper than for the petrol-powered Dacia Sandero. An all-electric Peugeot e-208 is even 228 zlotys cheaper than its combustion equivalent. In the premium car segment, differences in monthly leasing rates are significant, too.

Car experts admit the success of the government-sponsored program has surpassed expectations, adding, however, that it's running into capacity snarls. A major problem is processing times for subsidy applications, which are getting longer and longer.

Access to charging stations is another aspect limiting EV market expansion. Using mainly public fast-chargers still makes electric vehicles more expensive than combustion cars, or hybrids.

Apart from that, common problems like range anxiety and charging times are preventing a wider adoption of EVs in Poland like elsewhere in the world.

Edited by: Uwe Hessler