Are electric car incentives bad? Here are 5 good reasons why they don’t work. Maybe the whole discount mechanism should be redesigned
Just over two months after the start of Ecobonus 2023 electric car reservations continue to fall and this year there is a serious risk of repeating the half-flop of 2022, when between BEV and PHEV there are around 300 million euros left out of the 700 available (by the way how do you intend to reuse this money?). At the time of writing, and limiting ourselves to contributions for individuals, it is indeed reserved only 7.58% of the cap for electric cars and only 3.25% of the funds for plug-in hybrids. Claims from car sharing and car rental companies fare slightly better, but only marginally. In short, the incentive system for low-emission vehicles seems fair do not work (for at least 5 good reasons) and should probably be revised, as demanded by the same associations that push for green mobility.
HOW 2023 CAR INCENTIVES WORK
Before listing the 5 Reasons Electric Car Incentives Don’t Work, as they are currently organized, let us quickly summarize the mechanism. In 2023, 630 million euros are available to encourage thepurchase of zero or low emission vehicles (cars, motorcycles and utility vehicles). As far as cars are concerned, there are three possibilities for incentives: the first concerns the cars they issue from 0 to 20 g/km of CO2, with a discount of 3,000 or 5,000 euros (depending on whether a car up to Euro 4 is scrapped or not); the second concerns the band from 21 to 60 g/km of CO2with a discount of 2,000 or 4,000 euros: the third includes the band from 61 to 135 g/km of CO2with a premium of 1,500 euros only in the event of tearing.
However, not all cars that fall within the expected ranges can be purchased with contributions because a spending limit: approximately 42,000 euros for the 0-20 and 61-135 ranges and approximately 55,000 euros for the 21-60 range, accessories, VAT, IPT and registration included.
Attention: a large part of the funds is reserved for private requests, only 5% of the 0-20 range and 5% of the 21-60 range are intended for car sharing and car rental companies for commercial purposes, including discounts are however reduced by 50%. More details on the 2023 car incentives here.
1. WRONG TO ENCOURAGE ICE CARS TOO
And let’s move on to the 5 reasons why car incentives 2023 not working inspired by an interesting interview that Francesco Naso, general secretary of Motus-E, the first Italian association created to support electric mobility, granted to the web-magazine Open.
First of all, Naso points to the possibility, provided for by the discount mechanism, of request incentives also for ICE carsi.e. petrol, diesel, LPG, etc. provided with a maximum emission limit set at 135 g/km of CO2, which makes it it diverted user interest to traditional cars instead of pushing them exclusively towards electricity and plug-ins. It’s no coincidence that funds for endothermic cars ran out in just three weeks. “Italy is the only major European country to encourage the purchase of endothermic cars, which already represent the main market segment“, explained the secretary of Motus-E.
2. THE MAXIMUM EXPENSES FOR ELECTRIC CARS ARE TOO LOW
As we have written, the price of electric cars (range 0-20 g/km) that can be purchased with the incentive, taken from the official price list of the car manufacturer, must be equal to or less than 35,000 euros (including including accessories but VAT, IPT and putting into circulation excluded), therefore around 42,000 euro. For Naso, this is too low a threshold which excludes the most interesting electric models from the incentives: “This is one of the lowest limits in Europe. Besides, it doesn’t make sense that plug-in hybrids have a higher price cap than electrics. (about 55,000 euros all inclusive, editor’s note)although representing less advanced technology than all-electric”.
Perhaps that’s why Tesla recently lowered the list price of the Model 3 to allow it to be purchased via an incentive, although so far there have been no particular effects on the evolution of requests.
3. SANCTIONS FOR LEGAL PERSONS
Car-sharing companies and car rental companies for commercial purposes have at their disposal few funds and moreover they can only take advantage of 50% half off compared to individuals. For Motus-E, this is a serious mistake: “Companies should be encouraged to apply for incentives and not penalized as is currently the case, because allow direct contact with technology to many more people. But that’s not all: the other big advantage of company cars is that they often come back on the second-hand market a few years later, helping to lower the price of new electric vehicles.”. The entire incentive mechanism for legal companies should probably be reviewed because in the case of companies the best solution would be to act on tax deductibility rather than the purchase cost: “Other European countries are already doing this”.
4. VERY SLOW BUREAUCRACY TIMES
Another very “Italian” factor also contributes to blocking the electric mobility market, directly affecting the interest in incentive cars: bureaucratic time. “The incentives for private charging stations were announced in October but we still don’t know when they will arrive and how they will work the implementing decrees are missing. Without forgetting the Retrofit Bonus, that is to say the contribution to transform an ICE car into an electric car thanks to a special kit, which although having been issued in 2023 is only valid for requests sent until December 2022, so it’s only retroactive”. In addition, for Motus-E, bureaucracy risks canceling the construction of more than 21,000 charging points on highways and in urban centers with PNRR funds, given that the authorization process appears particularly cumbersome.
5. TOO FEW OF THE 180 DAYS REQUIRED FOR REGISTRATION
We add the fifth and final reason that makes electric car incentives unappetizing, even if they apply to all types of cars: the maximum limit of 180 days (about 6 months) for register the reserved car with the Ecobonus is too limited, especially given the well-known delays that extend car delivery times. We remember non-compliance with the deadline entails the loss of the right to the incentive. Very conveniently, last year the maximum threshold was raised to 270 days (about 9 months), this year it was decided to restore it to 180. But in the meantime the problem of vehicle delivery has not had to everything was resolved.
Source : Sicur Auto