The eyes of the automobile industry are on how companies and society should make the transition to electric vehicles.. But combustion cars still consume a lot of resources, also in the public sector. In the six large European countries (Italy, Germany, France, Poland, Spain and the United Kingdom), for example, what are known as company cars, those that companies give to their employees as part of their salary so that they can use them both indoors and outdoors. As outside their working time, they receive considerable public aid, even when they are combustion workers. According to a report by the NGO Transport & Environment (T&E), vehicles of this type powered by fossil fuels received around 42 billion euros in public aid in the aforementioned countries in 2023, especially in the form of tax discounts.
This figure is expected to reduce over the years as electrification advances and sales of combustion cars decrease. something that, in theory, should happen in 2035. However, pressure from many manufacturers and the new political map in Brussels, leaning more to the right, may change that date.
The study is based on the analysis of subsidies to combustion cars from companies or those of this type acquired through them. It analyzes different types of aid, such as the tax discounts received by companies and employees who buy these cars when they do so through payments in kind; VAT exemptions when vehicles are purchased through leasing; or also through corporate tax depreciation.
The first conclusion that emerges from this study, once we see the large aggregate figure, is that the intensity of support varies considerably depending on the country. Italy is the one that allocates the most aid in these ways, about 16,000 million, followed by Germany (13,700 million), France (6,400 million) and Poland (6,100 million). In all of them, the type of subsidy that has the most weight is the tax exemption on benefits in kind, which, as T&E points out, benefits the wealthiest taxpayers, who are the ones who normally have the possibility of accessing this type of car. . These tax exemptions on benefits in kind for company combustion vehicles, in Italy alone, represent a cost for the State of 10.6 billion.
The report, for its part, does not leave Spain in such a bad position, which barely has tax aid for this type of automobile with around 100 million euros. However, T&E, an NGO that prepares many studies on the transport sectorhighlights that in Spain it is better for a worker to receive payment in kind for a combustion car than for an electric one. “If we take a typical model granted through this scheme, the BMW I had to register it privately. In the case of its electric equivalent, the BMW IX3, the situation is adverse: the employee would stop receiving 500 euros. This scenario is repeated with the most popular SUVs and large cars,” explains T&E.
In the United Kingdom, for its part, there is no tax aid for these company combustion cars and T&E highlights that it is the only one that really promotes the adoption of electric vehicles by companies. This is because the exemptions to benefits in kind in this country are focused on promoting zero-emission vehicles. One of the European countries in which this type of public incentives is important, but is not included in the study, is Belgium. However, a tax change a few years ago, explains Arnau Oliver, coordinator of the study, has boosted the acquisition of electric cars.
The European Commission has had this type of subsidies in its sights for some time now harmful to the environment and among those they point to are exemptions for vehicle purchases through salary payments in kind. It is foreseeable that the new European Executive will confront this situation. This can be seen, in some way, in the letter sent by Ursula Von der Leyen to the Spanish Teresa Ribera, probable vice president of the next Commission and head of Competition, in which she details the tasks she must assume in the next five years. It talks about “a new state aid framework to accelerate the deployment of renewable energies.” However, this phrase includes it in an industrial context. In addition, there may be a problem with supply, since at this moment it is Chinese companies that have the most competitive vehicles, so stimulating demand for electric cars can push the European consumer even more towards products manufactured in the Asian giant. , hitting a vital sector for the economy and employment in Europe.
