Tax breaks and free access to bus lanes should be used to help reverse Australia’s poor uptake of electric vehicles, a new report has said.

Australians remain deeply reluctant to buy electric cars, which accounted for just 0.1% of new car sales in 2015. Australia is increasingly falling behind other countries, particularly in Europe, where sales of electric cars represented 1.2% of new European Union car sales in the same year.

In Norway, electric vehicles made up 22.8% of new car sales, thanks largely to a suite of financial and policy incentives. Electric cars are allowed to use Norwegian bus and taxi lanes, pay no parking fees and are exempt from road tolls, VAT and registration charges.

Drivers in France are given a rebate for low-emitting cars and charged an extra fee for high-polluting vehicles. France’s scheme reduced average carbon emissions for a new car from 149 grams per kilometre in 2007, a year before the policy was introduced, to 114g in 2014. In the same year the average for a new car in Australia was 188g.

The Australia Institute, in a report released on Friday, warned Australia risked becoming a “laggard” on electric cars by international standards. Australia offered “disappointingly few” incentives for buyers of electric cars, the report said, and lacked proper battery charging infrastructure.

Trials of electric vehicles in state government fleets were too small to produce meaningful results, the report said. Victoria used only 54 electric or hybrid cars between 2010 and 2014, in an overall fleet of 4.5m vehicles in the state.

“Electric vehicles promise benefits to both consumers and governments,” the report said. “Nonetheless, the market for electric vehicles remains underdeveloped and progress has been slow.

“Australia’s electric vehicle market is, by international standards, a laggard. This is in no small part due to a lack of public investment in establishing the conditions necessary for growth.”

The Australia Institute said it had conducted its own survey showing majority support for policy incentives to encourage the uptake of electric vehicles.

The report recommends exempting electric vehicles from the luxury car tax, which applies to more expensive types of electric cars, including the Tesla Model S. It also calls for tax breaks to build a “visible, densely distributed network” of charging stations, to ease consumer concerns about being left stranded with a flat battery.

“The development of this network requires careful management,” the report said. “Left unregulated, there is a risk that competing technology standards cannibalise the EV market.”

Australia should also allow a Norwegian-style scheme to allow electric cars access to bus lanes, although such a perk should be time-limited to avoid congestion as the uptake of electric vehicles grows, the report said.

The measure would also require number plates that identify cars as electric. It should only apply to all-electric vehicles, the report said, to reduce congestion in bus lanes.

The report also recommended adopting a carbon pricing scheme, similar to that operating in France, which made cleaner cars cheaper to buy.