In the series of articles on our used electric car experiment, I have previously described how I chose the particular car, how I bought it from abroad with the help of BRC and told about my experience with attracting bank financing for the purchase of this car. The next topic I want to talk about is state support for the purchase of electric cars.
Is the support only for buying a car and where does the money come from?
From the beginning, a little about the support program itself. It is one of the emission allowance auction instrument (EKII) for state budget programs, which aims to mitigate and adapt to climate change. Latvia is moving towards climate neutrality in 2050 and the goal is to achieve at least 55% less greenhouse gas emissions by 2030 compared to 1990. This is not only about support for the purchase of a car, because there are others as well EKII programs, within which the energy efficiency of buildings can be increased, the use of renewable energy resources can be expanded and other measures can be implemented. For example, these are programs that allow you to replace heating boilers or install solar/wind power plants. At the same time, additional support in the amount of 1,000 euros can be received for writing off an existing vehicle by handing it over to a processing company in accordance with the End-of-life Vehicle Management Law. EKII is financed from the auction of state-owned European Union emission allowances (EUA) and European Union aviation emission allowances (EUAA). So, this money cannot be diverted to other purposes and must be used for emission reduction projects.
Half of the money is still available in the support program
The total available funding for the specific car purchase support project is set at EUR 10 million and will be available until December 31, 2023 or until funding is available. At the moment, there are within the program received support for the purchase of 1218 cars and about half of the funding is available, or 5 million euros. So, you too can still get this support.
Who can receive this support?
This program is available to individuals who are Permanent residents of the Republic of Latvia. Support will be refused to those persons who have tax or maintenance debts, as well as declared insolvency or legal protection proceedings. Likewise, those persons against whom international or national sanctions have been imposed, as well as if the person has been found guilty of one of several criminal offenses, can be exempted from this support.
In order to receive support, the car must be bought from sellers registered in this EKII program, and there are currently 65 of them. Yes, you cannot get support if you buy this car from a private person or a foreign company.
You must have heard that the state offers 4,500 euros in support for the purchase of new electric cars, but another 1,000 euros worth of benefits must be offered to the seller. I have heard that dealers tend to offer tires or charging equipment for this amount. In the case of used cars, it can also be tires or simply a 500 euro discount on the total amount of the car, as it was in my case. As far as my own support and understanding, the state also compensates the sellers for this money.
It should be understood that we cannot buy every car with this support. There are certain conditions that must be met in order for a car to qualify for support.
New or used manufactured M1 and N1 categories electric cars, for which the mileage in urban conditions between full charges is at least 150 kilometers and the maximum speed is at least 90 km/h. A new electric car may be used for less than six months or driven less than 6,000 kilometers and its sales price in the basic configuration does not exceed 60,000 euros (without VAT). A used electric car cannot be registered in Latvia for more than six months and its selling price cannot be lower than 5,000 euros (without VAT). New industrially produced M1 and N1 categories externally chargeable hybrid car, which have a mileage of at least 50 kilometers between full charges and a maximum speed of at least 90 km/h in urban conditions using only energy from the electricity stored in the vehicle. A new externally chargeable hybrid must have been used for less than six months or driven less than 6,000 kilometers and its sales price in the basic configuration does not exceed 60,000 euros (without VAT).
On the website of the EKII program, it is generally written that only those machines that are published on the foundation’s website can be purchased. I did not find such a list, but I assume that it contains all the machines of well-known brands current on our side. Problems could only arise with some esoteric vehicles. As far as I understand, sellers approved in the program can also register new cars.
What is the procedure for buying a car in order to qualify for support?
You have to fill out an application for support from the beginning. It contains information about the beneficiary, the seller and the car. I am attaching a certificate from the SRS that I have no tax debts at the moment. I sign the application with an electronic signature and send it to the seller. From the customer’s point of view, this process is relatively simple, but the seller has to put in more effort – collect information about the customer, complete and sign applications and contracts, all of which must be submitted on the EKII program website. In addition, leasing issues may also arise, as it all comes to the total transaction amount and activities.
In my case, all this paperwork pun was handled by the BRC. I filled out and signed the application for the support program on October 17, and a day later the contract itself was sent to me for signing. When I collected the car on October 20, I also received the contract signed by the other parties involved. But in general, I have heard that this whole process can also take more time, since it is not nearly automated.
It doesn’t end there! Car operating rules must be followed!
Take into account that the recipient of the aid must also comply with very specific rules for the operation of the car, in case of non-compliance, part or all of the state aid may have to be repaid. In practice, this means that the car may have to be shown to auditors who will assess whether the conditions of the support program are being met. No joke!
Basically, the rules of operation are quite understandable and simple:
This car must be driven at least 52,000 kilometers within five years, and monitoring reports must be submitted to the EKII program website every year until this goal is met. Here are tutorial on where and how these reports are to be submitted. Permanent registration of the vehicle in the territory of the Republic of Latvia must be ensured, a natural person is the owner of the purchased vehicle, it is prohibited to sell, change, invest in a joint-stock company and transfer without compensation. The car may not be used for economic activities and may not be used in other projects financed by other financing programs and individual support programs. The operation of the vehicle must be ensured in accordance with the regulatory enactments on the state technical inspection of vehicles and technical control on the road. The vehicle must be insured against the risk of death.
Those 52,000 kilometers might sound like a lot, but if you divide it over five years, it’s only 10,400 km a year, and that’s how much most of us drive if the car is really used on a daily basis. We can shake off the shackles of the obligation faster if we cover these 52 thousand kilometers faster and the aid recipient has the right to propose to the fund to extend the monitoring period for the time when it was not possible to operate the vehicle for reasons beyond the aid recipient’s control, but no more than one year.
Conclusions: We have not only support, but also responsibilities!
Let’s start with the fact that it is very good that we have state support for various activities aimed at reducing emissions. It is not only about support for the purchase of a car, because the state support is also for the installation of solar panels/wind generators, replacement of heating boilers, etc. activities. In general, it is one of the ways that the state can more actively promote the activities of certain of its citizens.
We have to wait when similar support will be available for companies, because they too have time to get access to more environmentally friendly cars with which to carry out their economic activities. However, the following means of transport also contribute to overall traffic and emissions.
Getting state support for the purchase of an electric car is quite realistic, and since this process is basically managed by car sellers, it is not difficult for the customer himself. We fill out the application form, attach the tax payment statement and sign the documents sent by the seller.
However, it is also necessary to approach the observance of the rules of car operation with great responsibility. They are relatively logical, but you will have to remember that I cannot legally use this car for any economic activity (for example, you will have to pay for the charges with your own money) and you will have to remember to submit the mileage reports on time. I just made a reminder about it in my calendar. CASCO will also be mandatory as long as I drive the required 52,000 kilometers and these are mandatory costs that simply need to be taken into account. Therefore, there may be cases where this state aid is not worth the restrictions. This could be especially true for used electric cars, where the amount of support is comparatively not so large.
2023-10-24 09:33:39
#state #pay #euros #purchase #electric #car
