State to Subsidise Rental EVs with ISK 1 Billion Skip to content
Minister Guðlaugur Þór Þórðarsson.
Photo: Golli. Minister Guðlaugur Þór Þórðarsson..

State to Subsidise Rental EVs with ISK 1 Billion

In further efforts to meet its commitments to reduce CO2 emissions, the state will support car rental companies this year with some ISK 1 billion [$7.2 million, €6.7 million] in subsidies to accelerate the electrification of their fleets.

Minister of Environment, Energy, and Climate Guðlaugur Þór Þórðarson stated recently that Iceland’s tourism industry must also play a role in the energy transition. This includes not just the electrification of the rental fleet, but also an expansion of charging stations at hotels and guesthouses throughout the nation.

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The matter was discussed at a cabinet meeting last Friday, March 17.

Minister Guðlaugur stated: “We will be supporting the car rentals to acquire electric cars. This is extremely important in order for us to achieve the energy transition,  as car rentals are naturally a large part of the national car fleet. And if we are going to reach our goals for electric vehicles, then car rentals have to be included. And it’s by including the car rentals, that we will be able to reach our goals much sooner.”

Read more: Public Transport Funding

According to the Minister, the higher average cost of electric vehicles has until now been a barrier to these companies from buying more of them. The subsidies will be structured like the subsidies already available to individuals, which remove VAT up to a certain limit on EVs.

In his statement on the EV subsidies, the Minister also highlighted the lack of charging stations across Iceland as a bottleneck.

“It is likewise very important that hotels and guesthouses cooperate, for this to be a viable option […] And in order for us to prevent ‘charging anxiety’ and for this to be as efficient as possible, people must be able to charge at night,” Guðlaugur said.

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