Over the past decade, Sweden has put into place policies that reduce certain taxes and fees on eco cars including hybrids (HEVs), plug-in hybrids (PHEVs), and electric vehicles (EVs). Currently, the national government is considering additional measures to further encourage the uptake of these vehicles.
Begining on January 1, 2011, vehicle taxes have been based on several factors including weight, fuel, and CO2 emissions, which is advantageous for H&EVs.
The requirement governing the public purchase and leasing of vehicles for public authority fleets is that at least 85% of the total number of cars purchased or leased by a public authority during a calendar year should be eco vehicles, according to a definition of the types dating from 2006.
Since mid-2009, the purchase of an eco car has been rewarded by a 5-year exemption from vehicle tax that averages about US$ 300 per year depending upon the vehicle type. Eco car exemptions are defined by the fuel consumption, use of alternative fuels, and carbon dioxide (CO2) emissions levels (a vehicle run on fossil fuels can be called an eco car if the carbon dioxide emissions are below 120 g/km). In addition, vehicles with diesel engines must have emissions of particulate matter must be below 5 mg/km to qualify. In practice, this means that vehicles that run on diesel must be equipped with a particulate filter to be classified as eco cars.
Other incentives can reward drivers of hybrid, electric, and other eco vehicles. Some local authorities have reduced parking charges for eco vehicles; the rules vary from one local authority to another. A congestion-charging scheme (i.e., tax charged during times of traffic congestion) has been in effect in central Stockholm since the summer of 2007. PHEVs and EVs are exempt as there is no taxation on vehicles equipped with the technology to run either completely or partially on (1) electricity or a gas other than LPG or (2) a fuel blend that consists predominantly of alcohol.