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 had sped ahead in recent years meaning that - despite its lack of manufacturing and its isolation - it had 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, and a change in the grant system saw a sharp decline in market share, despite it still performing better than most countries it is struggling to regain the heights it saw in previous years. Again highlighting the difficult challenge policy leaders have when transitioning from grant giving, especially when price parity has not been reached.

The market will be need to be monitored to see if this decline trend changes, and policy makers should take swift action if this does not occur.