Headline Target: COP26 Zero Emission Vehicles Declaration 2035 ICE ban pledge

Car Manufacturing Country: No passenger car manufacturing.

Purchase Incentives for Cars: Individual purchase grant for new and used, registration tax reduction.

Supplier Regulation Policy: EU emissions performance standard (Tightening CO2 regime)

Infrastructure Incentives: None

Iceland’s transition has sped ahead in recent years meaning that - despite its lack of manufacturing and its isolation - it has become one of the leading markets in Europe and the world for BEV market share. However the introduction of a road use tax on EVs at the beginning of 2024 saw a sharp decline in market share.

The transition has been made easier by the introduction of a  number of incentives for drivers, whilst fossil fuel prices remain high due to transportation costs and tax, and electricity costs are lower than many countries in Europe due to the large amounts of renewable energy produced in the country. The market has regained some ground in recent months, it will need to be monitored closely to ensure this continues.