Electric car market need fiscal boost, says ICCT

Fiscal incentives are key to promoting the use of electric cars, according to a study of major markets including Norway, the Netherlands and France.

Researchers at the International Council on Clean Transportation (ICCT) found there are strong incentives in place in Norway, which has the highest sales rate in the world at 6.1% in 2013, and in the Netherlands, which has the second highest rate.

Fuel prices and taxes also have an important impact on car sales, the researchers said. The highest fuel cost savings from driving an electric vehicle were available in Norway and the Netherlands respectively out of 11 jurisdictions surveyed.

Norway excludes battery electric vehicles from VAT, resulting in a saving of around €4,500 on an electric Renault Zoe. Buyers of electric vehicles pay more VAT than for a conventional vehicle in all the other markets surveyed. These included California, the US as a whole, Japan, China, Denmark and Austria.

Take-up of electric cars was lower than 1% in France, UK and Sweden, which all offer large, once-off direct subsidies on electric car purchases. The researchers noted that many factors affect take-up, which means, for example, that market share remains low in the UK despite relatively attractive incentives overall.

In the Netherlands, all cars emitting less than 95 grams of CO2 per kilometre are exempt from registration tax. This means that a Volvo V-60 hybrid costs €11,000 less than conventional version. The country also offers income tax exemptions for employees using electric vehicles as company cars.

Around 210,000 electric vehicles were sold worldwide last year, up from 110,000 the year before. Around 24,000 were sold in the EU.


Excerpted from ENDS Europe Daily