State Subsidization for Electric Car Purchases

The Government of Republic of Serbia adopted the Regulation on the Conditions and Method of Implementing the Subsidized Purchase of New Vehicles with Exclusive Electric Drive (“Official Gazette of the Republic of Serbia”, no. 12/2026) (hereinafter Regulation). In this text, we will address the issue of the time period required for the Regulation’s implementation, key elements of the subsidy approval procedure, and provide an assessment of its effectiveness.

Regulation Implementation

Primarily, we need to have in mind that this Regulation and the subsidization of electric vehicle purchases are not new ideas. Last year, the Government adopted the regulation with an identical title, while in 2020, the Regulation on Subsidies for the Purchase of Vehicles with Exclusively Electric and Hybrid Drive. Hence, there exists a continuity in subsidization, and consequently, a state incentive for citizens to switch to electric drive or, at least, to step away from internal combustion engines.

The main difference between the subject Regulation and the 2020 Regulation lies in the fact that subsidies are now granted only for the purchase of new vehicles powered exclusively by electricity, whereas in 2020, the purchase of new hybrid vehicles was also subsidized. Compared to last year’s Regulation, the novelty is that applications for subsidized purchases are now submitted electronically via the eGovernment portal.

The Regulation came into power on 1^st March 2026, while applications may be submitted from 1^st March until 30^th September 2026. The Ministry for Environmental Protection (hereinafter the Ministry) will process complete applications until the allocated budget funds are exhausted. Given that the Law on the Budget of the Republic of Serbia for 2026 specifies only the total funds allocated to the Ministry, it is currently not possible to estimate how many subsidized purchases will be realized.

Eligible Beneficiaries and Subsidy Amount

The subsidization right is granted to natural persons, entrepreneurs and legal persons (hereinafter Beneficiaries), while the amount depends on the type of vehicle being purchased.

Per the Regulation, subsidies apply to the purchase of the following vehicles: mopeds, light and heavy tricycles, motorcycles, motorcycles with sidecars, light and heavy quadricycles, passenger vehicles with up to nine seats, and cargo vehicles up to 3.5 tons.

The subsidy amount varies depending on the type of vehicle, thus the anticipated amount of EUR 250 for mopeds and light tricycles, EUR 500 for motorcycles, motorcycles with a sidecar, heavy tricycles, light and heavy quadricycles, as well as EUR 5.000 for the specified cargo vehicles and passenger vehicles.

The subsidy is granted by paying the specified amounts towards participation in a financial leasing arrangement or toward payment of part of the purchase price. If the Beneficiary opts to acquire the vehicle through financial leasing, prior to receiving the subsidy, they must conclude a financial leasing agreement and pay at least 15% of the purchase price for the leasing provider.

Application for Subsidy and Allocation Procedure

For the application to be considered complete, the following documentation must be collected: certificates from the Business Registers Agency, certificated from tax authorities, a certificate from the Ministry of Interior confirming no criminal convictions, a homologation certificate, a certificate of conformity, a certified OP form, a supplier’s pro forma invoice, a preliminary contract between supplier and the applicant, a supplier’s statement confirming possession of the vehicle and compliance with all requirements of the Regulation, proof that the supplier is an authorized dealer for the sale of new vehicles, and the applicant’s statement in the method of vehicle acquisition.

The Regulation provides that the documentation from the Business Registers Agency, tax authorities, the Ministry of Interior, the homologation certificate, and proof of authorized dealer status may be obtained by the Ministry ex officio, unless the applicant declares that they will obtain them independently.

Considering that the budget funds are limited, and since the exact amount allocated for subsidizing electric vehicle purchases is unknown, and applications may be submitted until the end of September this year, we recommend that applicants obtain all documentation independently. This position is justified by the fact that the Regulation does not explicitly prescribe that an application, where the applicant opts for the Ministry to obtain documentation ex officio, shall be considered duly submitted on the day of submission with only the documentation the applicant must independently provide. Furthermore, it remains unclear whether, in such cases, the principle “earlier in time, stronger in law” would apply. It is conceivable that two applicants submit applications within a few days of each other, where the first opts for the Ministry to obtain documentation ex officio, while the second submits a complete application. As the Regulations does not governs such issues, it may be disputable who submitted the application first. Additionally, the Regulation does not govern the deadline within which the Ministry must obtain documentation ex officio. For these reasons, we assess that there is a higher degree of legal certainty if applicants independently obtain all documentation.

In any case, once the Application is complete (or, more precisely, once it becomes complete), the Ministry adopts a Decision approving the subsidy. The Decision is delivered to the electronic mailbox on the eGovernment Portal and regulates all relevant matters, from the type of vehicle to payment deadlines.

The rest of the procedure differs depending on the method of vehicle acquisition.

If the vehicle is acquired through financial leasing, the Beneficiary must, within eight days of receiving the Decision, electronically submit to the Ministry the financial leasing agreement, together with confirmation from the leasing company of the amount of the paid participation and proof of payment in the form of a bank statement.

Alternatively, if the vehicle is purchased with the Beneficiary’s own funds, the Beneficiary must submit the vehicle purchase agreement, the pro forma invoice, and proof of payment of the remaining portion of the purchase price.

Conclusion

Based on the above, it is justified to assert that this Regulation represents a step in the right direction, although it remains to be seen how significant its impact will be. However, since we currently lack information on the specific amount of funds reserved solely for subsidization, we cannot estimate the Regulation’s real reach. It remains unclear why the Government of the Republic of Serbia abandoned subsidies for the purchase of new hybrid vehicles. Has it assessed that Serbian society is ready not only to abandon internal combustion engines but also hybrid drive? We need not even describe this as abandonment, but rather as distancing. The Regulation provides a positive answer, while the reality, where citizens often drive “of-age” vehicles, is far from the desired state. Nevertheless, the Regulation and its accompanying plan are important, as they demonstrate a clear intention to subsidize and transition toward a cleaner method of transport.