Scandinavian electric vehicle manufacturer Think has welcomed a new subsidy from Amsterdam City Council to encourage vehicle electrification.

A fund of EUR3m (US$4.1m) will be available for grants to entrepreneurs and companies in the city who wish to replace their existing internal combustion engine (ICE) vehicles with pure electric models. Grants are available to cover up to 50% of the additional costs of buying EVs, which currently cost more than conventional ICE vehicles.

"What is happening is this industry is at a tipping point, but it needs an impetus to tip," a Think spokesman in Finland told just-auto. "It is only local authorities and city councils that can give it that push. Currently we are at the very, very early stage and as a result, it is expensive."

Think produces a city EV able to travel 160km (100 miles) on a 220v household outlet single charge. The cars are built in Finland by Valmet Automotive which also makes Boxter and Cayman models for Porsche.

First deliveries are taking place across Europe in selected key EV markets such as Austria, Denmark, the Netherlands, Norway, Spain and Sweden.

"We are increasing our EV sales forecasts in the Netherlands on the back of this announcement and urge other forward-thinking, green European cities to follow Amsterdam's lead with this initiative," said Think CEO Richard Canny in a statement.

Think is also building a factory in Indianapolis as well as trialling EV drivetrain technology with the Japanese post office. "If they are happy with it and want to pursue it, that will become a big business," said its spokesman.

Grants available from Amsterdam include up to EUR15,000 to buy a single EV; up to EUR25,000 to buy a single EV van and up to EUR45,000 to buy a single EV truck or taxi. A maximum of EUR250,000 is available to buy fleets of 20 vehicles or more.