This country ends tax benefits for electric cars

The advent of the electric car brings with it some tax changes. These vehicles, which were previously largely subsidized in certain countries (and which still are, particularly in France), are multiplying on our roads and the purchase incentives, which fulfill their role perfectly, will gradually disappear for obvious economic reasons.

In France, next year, the bonus will not decrease, but cars that are not produced in Europe will be excluded. Other countries are also taking measures, notably Switzerland, which has just announced the modification of the ordinance on taxation on the purchase of vehicles.

The Federal Council announced a review of its tax policy to combat tax losses and guarantee contributions to the fund for national roads and urban traffic. This decision is part of a program to consolidate state finances, adopted in early 2023.

Serious savings at stake?

The motor vehicle tax law in Switzerland currently provides for a 4% tax on vehicles used for the transport of people or goods. However, electric cars have been exempt from this tax since its introduction in 1997, a measure aimed at encouraging the development of electric mobility.

Over the years, the number of electric cars imported into Switzerland has increased considerably. From 2018 to 2022, the number of electric vehicles imported each year has increased almost sixfoldincreasing from around 8,000 to more than 45,000.

The first half of 2023 also saw a significant increase, with around 30,400 electric vehicles imported, an increase of around 66% compared to the same period of the previous year, when only 18,300 units were imported.

Subsidizing electric cars is getting more and more expensive

This rapid growth has had an impact on vehicle tax revenues. In 2022, the tax loss amounted to around 78 million Swiss francs, and for 2023 it is expected to be between 100 and 150 million Swiss francs, according to estimates by the Federal Council. If the tax exemption on electric vehicles was maintained, the cumulative tax losses could reach an amount estimated between 2 and 3 billion Swiss francs for the period from 2024 to 2030.

The Swiss government says the move should not lead to higher prices for consumers or require state subsidies. He believes that a profit margin can be made in the future, which will help maintain the competitiveness of electric vehicles in the market while preserving the resources necessary for the development of the country’s road infrastructure.

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