Electric vehicles in Luxembourg: growth, challenges and prospects
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Over the last five years, the share of electric vehicles in Luxembourg's fleet has shown steady growth. Among company-registered vehicles, the share of fully electric vehicles (BEVs) has increased to 18.34% in 2024. This performance is particularly notable against the backdrop of reforms that focus on supporting electric vehicles through tax incentives and benefits for corporate car owners.
However, the share of hybrid cars (PHEVs) is growing more slowly. This is due to changes in tax policy, where incentives are now only available for BEVs.
For individuals, the popularity of electric vehicles is somewhat lower, which is partly due to the choice of financial leasing. This mechanism is becoming increasingly in demand, especially among those who do not have access to corporate cars, offering a convenient solution for purchasing eco-friendly transport.
The Luxembourg government is aiming for an ambitious target: 49% electric vehicles in the country's car fleet by 2030. To achieve this, a reform of the corporate car tax regime is being introduced from 1 January 2025. Favourable tax rates (0.5-0.6%) for BEVs are also maintained. These measures, coupled with the growing popularity of electric vehicles, should bring the country much closer to the targets.
