*4.4. Regulatory Environment and Subsidies*

In European markets and the USA, which have some of the highest sales volumes, the increase in sales has often been the result of government intervention and not solely a consequence of price, functionality of the vehicles, or construction and financing of charging infrastructure. International examples show a significant acceleration of the EV market development upon the launch of direct subsidies for EV purchases. Economic priorities are usually considered to be in conflict with the environment and climate. However, for many Southeast Asian economies, the transition to automotive electrification is undoubtedly an opportunity to achieve their goals in both these dimensions simultaneously [8].

It should be noted that the first attempts to introduce and promote electric vehicles can be traced back to the 1990s. The forerunner of these measures was Norway, which is also an example of a country where stimulating the demand for electric cars through a package of national regulations yielded very good results. The country's electric car history began in 1994, when Norwegian corporation PIVCO began using 12 EVs to service the 1994 Winter Olympics in Lillehammer [48]. The first incentives from the government started appearing soon after: in 1996, the registration fee was reduced; in 1997, EVs were exempted from road tax; in 2001, a 0% VAT rate was introduced; in 2003, bus lanes were made available for electric cars; and in 2009, construction of a public charging network began. In 2011, the first fast charger was installed in Norway [49].

It is worth noting that the vast majority of countries that record the highest levels of electric car sales tend to offer, especially at the beginning, a system of incentives of an economic and administrative nature for those who decide to purchase and use electric vehicles. It can be concluded that the introduction of special advantages causes more consumers to decide to purchase this type of car, due to the fact that it is cheaper, and its use grants, among other things, access to zones that exclude regular traffic, or to publicly available charging terminals.

The subsidies are a key tool to maintain EV policy due to the higher costs of vehicles in most countries. For example, in 2021, Japan has set aside a budget of JPY 8 billion (USD 77.1 million) in electric vehicle subsidies, which can be used for up to JPY 800,000 (USD 7710) per vehicle to fund 10,000 BEVs [50]. Meanwhile, the USA provides a maximum of USD 7500 in federal and USD 1500–5000 in state grants per vehicle [51].
