EV Incentives: Costs & Benefits for Car Buyers

by Archynetys World Desk

The Government has announced the launch of the Auto+ Plan – will come into force when the call is published in the Official State Gazette (BOE)-, endowed with 400 million euros by 2026, with the objective of continue encouraging the purchase of electrified vehicles.

This program will offer aid of up to 4,500 euros for the purchase of economical and European electric and electrified vehicles, with retroactive effect from last January 1.

According to the information provided by the Ministry of Industry, the aid will be directed to the direct acquisition and/or leasing o renting -the latter, in the case of self-employed workers and companies- to electrified motor vehicles -electric and plug-in hybrids-, and Its amount will vary depending on factors such as the type of engine or the cost of the car.

In this way, The Auto+ Plan becomes the natural substitute for the successful Moves IIIwhich ended on December 31, although with important nuances, since it proposes several cuts compared to its predecessor, as denounced by the Organization of Consumers and Users (OCU).

“Although the 15% personal income tax deduction of up to 3,000 euros for the purchase of an electric car is consolidated and immediate access to aid is facilitated, the amount of the latter decreases and Those intended for the installation of home chargers are eliminated -Moves III offered incentives of up to 70% of the cost for individuals and the self-employed-“, highlights the OCU, which points out that “sustainability cannot be a luxury accessible only to the most privileged”, since “price is the main obstacle for electric mobility to be a viable option”.

“Unfortunately, the Auto+ Plan does not fully address this fact, because The maximum amount of new purchase aid has been reduced from 7,000 to 4,500 euros, when the offer for scrapping an old vehicle was eliminated. An offer that not only contributed to removing the most polluting vehicles from the market, but also to reducing the average age of the vehicle fleet in Spain, one of the highest in the European Union and a factor in accident rates,” says this group that works in defense of consumers, which affirms the additional aid of 1,000 euros from the dealer that it proposes, “It was already common in many brands.”

The OCU also lacks a “national charging strategy that guarantees real and equitable access to electric vehicles aimed at those who lack their own charging station and low-income families.” “Today Most charging stations in cities belong to private companies and share rates significantly higher than those offered to households.“, sentence.

“These adjustments will not represent a structural brake”

May Lopez Diazteacher of OBS Business School and director of Companies for Sustainable Mobility, for her part, believes that the Auto+ Plan, “although it is not perfect”, includes several improvements to take into account. “Its centralized and more agile management will correct the problems of previous callsreducing bureaucracy and guaranteeing that aid arrives quickly and homogeneously throughout the territory. Another positive point is that they are direct aid at the time of purchase,” he says.

Furthermore, “the limitation of the maximum price of the eligible vehicle will allow public funds to be better distributed and expand the number of beneficiaries, democratizing access to sustainable mobility.” On the other hand, “by promoting manufacturing in Europe we not only seek to reduce the environmental impact, but this will allow strengthen European industry, generate jobs and improve our strategic autonomy“.

López Díaz recognizes that the new Executive program to advance the electrification of the Spanish mobile fleet introduces a series of adjustments, although he predicts that These cuts “will not represent a structural brake on demand”. “First of all, These aids can be complemented with other instruments, like the CAEsthe 15% deduction in personal income tax or regional and municipal aid, which allows maintaining a significant level of support for many buyers,” he highlights.

“Secondly, the market has changed. Today there is a much wider and more affordable range of electric vehicles.and when the total cost of ownership (TCO) is analyzed, the electric vehicle is already more economical than its combustion equivalent. The savings in energy, maintenance and taxes offset the initial investment,” he adds.

Therefore, “although the cuts may moderate the pace in the short term, the underlying trend responds increasingly to economic criteria and not only to public incentives. With or without aid, The electric vehicle is beginning to be a rational decision from the point of view of savings for the user“.

Main keys of the Auto+ Plan

-Immediate subsidy. One of the main keys of the new program is that the discount on the vehicle is applied directly at the point of sale, thus avoiding consumers waiting months to receive the money, as happened in Moves III.

-EEA criteria. The program introduces the EEA criteria: Electrical, Economic and European if you want to be a beneficiary of the maximum aid. Specifically, what is intended is to prioritize the purchase of 100% electric vehicles of a limited amount – up to 35,000 euros (VAT excluded) receive the maximum percentage of aid – and whose assembly and manufacturing – including the battery – has been carried out in an industrial facility in the European Union (EU).

-Aid of up to 4,500 euros. At this point, the Auto+ Plan offers aid of up to a maximum of 4,500 euros for the purchase of cars with a ZERO label. That amount, however, is only reached if the vehicle meets all of the program’s criteria.

-Discount of 1,000 euros at the dealership. In passenger cars and vans the dealer is obliged to apply an additional minimum discount of 1,000 euros. In total, a total aid of 5,500 euros (4,500+1,000) can be obtained if the conditions of the plan are met.

-Maximum price: 45,000 euros. The maximum price of a vehicle to qualify for aid, without taking into account taxes and discounts, is 45,000 euros for a passenger car.

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