Sales of electric cars are stagnating due to the threat of road tax

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Sales of electric cars are stagnating due to the threat of road tax

Economists at ING reveal a stagnation in the sales of electric cars, attributing the primary cause to apprehensions among potential EV drivers regarding government plans for road tax. The lackluster performance in electric car sales can be attributed to several factors. Firstly, the market still lacks a sufficient number of affordable electric models, with a decent EV costing around 35,000 euros, a sum deemed excessive for most private individuals. Although models with a starting price below 25,000 euros, such as the Citroën ë-C3 and VW ID.2, are on the horizon, their availability remains a future prospect.

Secondly, the reduction of the purchase subsidy for private individuals to 2,950 euros in recent years has further impacted electric car adoption. Although there were plans to further decrease the subsidy this year, the government intervened at the last minute in an effort to boost EV sales.

The third challenge arises from the impending road tax for electric vehicles (EVs), scheduled to commence in 2025. Initially set at a quarter rate, it is slated to escalate to 100 percent by 2026. This levy poses an additional financial burden on EV drivers, especially considering the higher weight of EVs due to their batteries.

Consequently, the dwindling demand for electric cars is adversely affecting car manufacturers, leading companies like Fiat and Volkswagen to announce reduced production levels in response to the current surplus of supply over demand in the electric car market.

In conclusion,

The stagnant sales of electric cars can be directly attributed to the looming threat of road tax. This adverse effect is a significant hindrance to the global transition towards more sustainable and environmentally friendly modes of transportation. Governments and policymakers must consider implementing effective measures that will incentivize the use of electric vehicles rather than deter potential buyers. These could include tax exemptions, subsidies or rebates for eco-friendly vehicle owners. Let’s advocate for better policies that support green technology and drive us toward a cleaner, healthier future.

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