Acea chief calls for EU-wide EV incentives

Leader of Europe's auto lobby says fragmented approaches are "hampering" the bloc's e-mobility revolution

Acea chief calls for EU-wide EV incentives
Sigfrid de Vries says current national schemes are not best optimised for driving EV adoption

The director general of the European automotive lobby, Acea, has called for a a pan-European EV incentive scheme to replace existing discrete national programmes.

Acea's Sigrid de Vries says that the "the EV transition is curtailed by a fragmented internal market when it comes to EV incentives". And she further argues that certain EU countries lack incentive programmes because of budgetary issues, as opposed to a lack of interest in electrifying their road fleets.

"The competence for establishing incentives rests with each member state, exacerbating disparities across borders and making it harder to catch up with wealthier countries that can better afford the extra pressure on public budgets," de Vries says.

"While setting decarbonisation goals at the European level is unquestionably the right approach, a continent with 27-plus uncoordinated schemes for EVs will hamper the transition," she adds.

The risks of the fragmented inventive system within the EU is exemplified by Germany's sudden withdrawal of EV purchase incentives in December last year, as a result of an abrupt revision to the national budget.

A German court ruled in November that the government had broken a constitutional debt rule by transferring funds earmarked for pandemic support to its Climate and Transformation Fund, which provided cash for the EV incentives. As such, purchase subsidies were withdrawn with only one month's notice.

Leaving incentives down to national governments has also resulted in subsidies taking diverse forms across the continent. Denmark, for example, offers minimum-rate taxes on acquisition and ownership of EVs, while Bulgaria and Romania exempt electric vehicles from ownership-related taxes.

Currently, seven countries, Belgium, Bulgaria, Denmark Finland, Latvia, Slovakia, and Sweden, do not provide any purchase incentives, but most of them grant tax reductions or exemptions. But even this limited form of purchase incentive can form part of a comprehensive, joined-up EU subsidy programme, de Vries says.

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"A diverse array of tools, whether it is tax credits, VAT reductions (including on electric charging), lower registration fees, cheaper parking and tolls, a diverse policy toolkit can reap substantial rewards for EV uptake," she says.

But any such integrated subsidy programme would undoubtedly require a significant amount of time for the European Commission to deliberate, at a time when it is already finalising the details of a seminal tariff program which is expected to introduce duties on Chinese-manufactured EVs in the coming weeks.

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