Germany will immediately stop subsidies for e-cars. Flanders will soon introduce such a subsidy to make the vehicle fleet more sustainable. What is the best way? ‘There are smarter policies possible than paying a premium to a few people.’
Cathy Galle19 december 2023, 18:58
Since the beginning of this week, you can no longer apply for a subsidy in Germany when purchasing a new electric car. Previously, anyone who bought such a car could receive up to 4,500 euros in premiums. Since 2016, a total of 10 billion euros in premiums have been paid out and approximately 2.1 million electric cars have been purchased.
But now apparently the money has run out. In the ARD program Bericht aus Berlin, German Finance Minister Christian Lindner said it had always been clear that the subsidies were not forever. When the money ran out, it would stop. Now, so.
The decision is criticized in Germany. Analysts fear that sales of electric cars in Germany will now decline sharply. The country wants to have no fewer than 15 million of these cars on the road by 2030. This goal now appears to be in jeopardy. Others note that the bounty didn’t really make much of an impact. The price of electric cars has risen proportionately since the introduction of the premium. In short: the premium went to the car manufacturer rather than the buyer.
The Flemish government has now decided to introduce a similar premium from next year. Anyone who buys an electric car for a maximum of 40,000 euros can receive a 5,000 euro premium for a new car, 3,000 euros for a second-hand one. The intention, just as was previously the case in Germany, is to attract more people to electric cars. The Flemish government was immediately criticized. Especially because the money will probably go mainly to people who were already planning to purchase an electric car. The Mathew effect comes into play here: whoever has, will receive more.
However, mobility expert Dirk Lauwers (UGent/UAntwerp) sees it more nuanced. “The Flemish premium concerns the cheaper classes and second-hand cars. So you can say that there is a social direction somewhere. The premium is intended for people who do not have a company car. We all know that we need to make our mobility more sustainable. Electric cars are one option for this. Now only 2 percent of the Belgian vehicle fleet is electric. That replacement has to happen.”
Although it is also difficult for him, because there are other ways to achieve sustainability with fewer disadvantages. “With an electric car you are still stuck in traffic jams,” says Lauwers. “They are also in danger of becoming longer. We know from Norwegian and Swedish research that those who drive an electric car usually drive more kilometers. Because a number of resistance to a lot of driving disappears. It is cheaper to drive electric and you emit less CO2. Electric cars will also not increase road safety because they often involve heavier cars.”
The question is whether a government that says it only has a limited budget for mobility should focus on this? “Focusing on better public transport is simply more efficient and more social,” says Lauwers. “93 percent of the people who now take the bus have no alternative. In the meantime, bus stops are being dismantled and many people are dropping out. They can no longer get to where they want or need to be. Then you can ask the question whether it is necessary to subsidize people who are able to buy a new car and leave people who do not have a car out in the cold.”
Future of the automotive sector
In Germany, analysts are particularly concerned about the future of the German car sector, which will find it even more difficult to compete with cheap Chinese electric cars. An argument that was also put forward here in Flanders to justify the premium.
But according to tax law professor Mark Delanote (UGent/Delanote.Law), we must ask ourselves whether giving subsidies to private individuals is the right way to tackle this. “We can already think of very targeted measures that guarantee that the Chinese cannot dump their electric cars on the European market,” he says. Delanote does not think subsidies for private individuals who buy an electric car are a good thing. These are popular stopgap measures that do not always have the effect they are supposedly intended to have.
At the same time, there is still a favorable federal arrangement for green commercial vehicles. However, according to the tax specialist, who assisted the federal government in preparing a major tax reform, these are two different things. “We need to seriously consider how the specific scheme for company cars can be phased out, but in a country like ours with a strongly entrenched company car culture, this will not happen overnight. In the meantime, our Minister of Finance Vincent Van Peteghem (CD&V) has decided to steer the system in a certain direction. Only cars that do not emit CO2 are still 100 percent tax deductible. And this measure appears to have an effect.”
According to Delanote, there are indeed better ways to make the fleet more sustainable. Support the automotive industry itself more, for example. And make electricity cheaper. “People usually look at the total cost of such a purchase. If electricity becomes cheaper than fossil fuels, there will automatically be a shift to green, electric cars. I think that is a much smarter policy than paying a premium to a few people.”
Also read
2023-12-19 17:58:19
#Germany #abolishes #premiums #electric #cars #Flanders #introducing
