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Global EV Transportation Review

Key Regional Markets


The Finnish electric vehicle market is an attractive one for the rapid growth in penetration in the last five years. Electrification is key to the policy objective of decarbonizing the transportation sector by 2030. However, much more is needed to support and sustain the growth in electric vehicle sales. The charging network, while expansive, lacks the breadth and quality for the upcoming demand. There are concerns that it could be a bottleneck unless addressed soon. On the other side is the emerging landscape in battery and critical component production, where Finnish industry is better placed to make use of the opportunities.

GDP (Current Prices) USD (2021)

297.58 bn

GDP Growth Forecast (constant prices) (2021-2025)


EV Penetration

38% of total new passenger vehicle registrations by 2022

EV Target

Planned Year of Phasing Out ICE Vehicles
GDP Source: IMF, World Economic Outlook

EV Penetration and Trend

Source: Finnish Information Centre of Automobile Sector

Finland’s battery electric and plug- in hybrid electric vehicles together held about 38% share of total new vehicle registrations by end of 2022. Electric vehicle segment was the only one in the country’s automotive industry that reported a growth during the year. The spike in conventional fuels during 2021 and 2022 added fillip to the demand – during 2022 dealerships reported huge backlogs for the electric vehicles while those based on internal combustion engines (ICE) had stagnant sales. Supply chain issues and production delays added to the challenges. The second-hand electric vehicles (largely German imports) rose in demand as a result, often with a higher price than the new one.

Source: Finnish Information Centre of Automotive Sector

A rising share of new electric vehicle registration is based on the battery electric ones. In 2022, of the total 30,701 electric vehicles registered, battery electric accounted for 47%, compared to 14% in 2018. The rather stagnant performance in the new electric vehicle registrations of 2022 was due to plug-in hybrids (declined 20% year-on-year). The battery-based vehicles grew 43% in the same year. The trend is similar to overall European electric vehicle sales where plug-in hybrid sales have been progressively displaced by the fully electric drivetrains. Manufacturers play the part in this with the rise in product variety and price points for the battery based offerings.

New Registration of Electric Buses

Source: Finnish Information Centre of Automobile Sector

In case of the electric bus segment, there is a faster pick-up in the new registrations due to the push from the municipal and local authorities’ procurement. Due to emission reduction targets, there is a rush to replace and convert the fleets. In line with the rest of the major European countries, over two-thirds of new bus registrations going to the batteries. The contribution to the total fleet size remains insignificant though at just 2.6% (as of 2021). It still represents a marked progress from the 0.2% share in 2018.

Charging Infrastructure

Source: European Alternative Fuels Observatory
Note: Data for 2023 is as of February 2023

With public funding, Finland’s charging infrastructure has lately registered a decent growth. The total network capacity grew 23% between 2020 and 2022. A higher growth is expected by end of the 2023, based on the progress achieved so far. It also helps that the rising electric vehicle penetration creates its own demand-pull for charging points, met increasingly by enterprises across sectors to capitalize on the opportunity. Also, considering the low capacity base (in absolute terms), the share of DC-based fast-charging points is significant at around 20%. The equitable spread of the charging network is the factor to contend with – the existing base is concentrated in few major cities, especially in Helsinki.

Policy Regulation

The policy objective is to put in place the requisite systems to enable a phased decarbonization in the transportation sector by 2030. Alternate fuels are part of the instruments in such objective, beyond electric vehicles. The focus however has been on the electric vehicles due to the options available, in terms of enhanced supply and standardized technology platforms. For most part, subsidies have been used to promote the adoption of electric vehicles.

In December 2022, a government order enabled the extension of its ongoing subsidy regime for 2023. This covers subsidized purchase of passenger electric vehicles and conversion subsidies of the existing passenger transport. Also included are the purchases of electric trucks and vans.

A €2,000 subsidy is available for purchasing a passenger electric vehicle with maximum list price of €50,000. Only private purchases are allowed for such subsidies. For electric vans, the subsidy amounts range from €2,000 to €6,000 depending on vehicle size and includes both individuals and companies. In case of electric trucks, the subsidy range is €6,000 – €50,000 depending on the vehicle size, and can be utilized by both individuals and companies. The present legislation, authorizing the subsidies, is valid till December 2024.

In addition to subsidies, electric vehicles also attract favourable taxation position in both private and commercial application. Since April 2022, new electric vehicles up to six months old, were exempted from the tax incidence. The exemption was also allowed for the imported electric vehicles. One result of such exemption was the spike in demand for barely used (ranging 1-3 months) imported electric vehicles from Germany. For battery electric vehicles put to business use, there is a €170 monthly tax deduction during 2021-2025. Also, the provision of workplace charging facility is incentivized through tax deduction.

Market Opportunity

Leading Chinese manufacturers such as BYD, Yutong and Golden Dragon fulfill the rising procurement of electric buses in Finland, along with others in the region. BYD emerged as a major player of late. In 2021 the company contributed to the largest order from bus operator Nobina’s Finnish fleet. Other market players are finding similar traction as cities step up procurement. YES- EU’s delivery of 26 electric buses in 2022 for the city of Tampere is one more of the several examples of leading manufacturers securing orders from local authorities and transport operators. The momentum could rise with nearing of the European Union deadline for emissions.

Major expansion plans for charging stations are underway at the city of Helsinki. There are already 50 new charging stations to be deployed in 2023, based on previous year’s tender. Typically, the winning bid for charging station tenders entails securing lease for street space, for the development of network capacity. While public charging capacity continues to be emphasized, other Finnish enterprises are tapping into the demand for destination charging points, such as in commercial locations of retail, hotels, etc. The retail group Kesko for instance, has been augmenting its charging network, under the brand K-charging. As of mid-2022, the group had charging points across 107 locations in Finland and is in the process of doubling the capacity. Separately, Finland’s Motorists Association has undertaken a project to set up charging station in various municipalities, as part of its efforts to support the rising stock of electric vehicles. The plan is to set up about 100 charging stations of 80-100kW power rating.

Battery manufacturing is the most significant investment opportunity in Finland, with the capabilities and resources at disposal. Progressively, a cluster of such capacities are expected in the country, as more enterprises make the foray. The country’s battery strategy formulated by policy authorities seeks to utilize the advantages in sourcing and processing of raw materials and the production or related activities associated with battery materials and their recycling. In February 2023, the Finnish Minerals Group and FREYR Battery signed a joint development agreement for an LFP cathode material plant in the city of Vaasa. This is the largest such investment commitment in Finnish industrial manufacturing.

Other enterprises are taking initiatives in the battery ecosystem through new technologies. One such recent example is the sand battery. As of mid-2022, two Finnish companies Polar Light Energy and Vatajankoski deployed the world’s first operational sand battery, as an alternate option for renewable energy storage. The battery, storing heat within a sand tank, was installed at the energy company’s Vatajankoski’s power project. Though not exactly placed as a replacement option to the Lithium-Ion battery systems, sand batteries could offer alternate options for the heating and energy storage applications in residential and process-based industries. The battery processing and recycling segment is meanwhile gathering focus with most of the upcoming factories required to install such systems, as part of regulatory processes. Fortum’s battery material recycling plant in Harjavalta, Finland is one of the notable ventures in this context. The facility is aimed at catering to Finnish and Europe-wide battery manufacturing units through restoration of the critical materials involved.


Progressively, the automotive industry could expect tighter emission norms as part of the steps to transition to the zero-emission transportation sector. Electrification will accordingly rise manifold to meet such goals. The Finnish Information Center for Automobile’s projection (as of 2022) is of 740,000 in total passenger electric vehicle stock by 2030. Charging infrastructure availability will be a critical rider for reaching projected electrification estimates.
The policy focus on zero-emission transportation will also entail alternative fuels, besides the battery electric passenger vehicles. The ongoing subsidy support mechanism, in this context, could be heading the same way as most of the other mature electric vehicle markets. A scaling down of the incentives could depress the sales momentum, even as manufacturers augment their supplies for the demand. Furthermore, a general inflationary pressure could restrict the options for suppliers in pricing their offerings.

A brighter outlook is in the upcoming battery ecosystem where Finland is better placed in terms of its endowed resources. But attracting the global capital may not be an assured case for the country. After the recent investment promotion packages announced by US and Canada, there is a competitive rush to secure the best deal. Finland’s position in this environment will be weighed-in by the investors.