As Europe pushes to phase out fossil fuels, a new study finds that, ironically, the EU’s five biggest members are pouring billions of dollars a year into subsidizing ICE company cars – to the tune of $42 billion ($45.60 billion) a year.
According to a new study, as reported by Reuters, certain countries in the EU are heavily subsidizing the purchase of new fossil fuel company cars – by $42 billion ($45.60 billion) a year. In Europe, company cars comprise around 60% of new car sales.
In the study, consultancy Environmental Resources Management (ERM) found that the EU’s five biggest members spend €42 billion ($45.60 billion) annually subsidizing fossil-fuel company cars. Environmental group Transport & Environment (T&E) calls for more subsidies for EVs instead.
To break down the spending, Italy provides €16 billion in subsidies for fossil-fuel company cars, followed by Germany, which provides €13.7 billion. France chips in €6.4 billion, while Poland pays €6.1 billion annually.
Around €15 billion across the four countries goes to subsidizing SUVs, the study found. In turn, company car drivers receive annual tax benefits of €6,800, “ranging up to €21,600 for high-polluting larger models,” Reuters reports.
Top comment by Sorin Silaghi
I take these claims with a huge pinch of salt because they usually just gloss over important details for the shock value. Gas is heavily taxed across the EU and cars are usually taxed higher for ICE, and even higher if the car has a large engine. And often times the subsidies are basically tax breaks for companies that would go out of business if they payed these taxes. This is double speak plain and simple.
“This is completely illogical and completely unacceptable, that we’re still pouring billions of taxpayer money into a technology that’s completely contradictory to the European Commission’s green transition agenda,” T&E’s director of fleets Stef Cornelis told Reuters.
The biggest subsidy happens via benefit-in-kind schemes that continue to incentivize petrol and diesel vehicles, reports T&C. But tax advantages for ICE cars in the UK and Spain are much lower, with the UK imposing a strong penalty for petrol and diesel company vehicles through a high benefit-in-kind rate, while electric company car drivers pay lower taxes. The result: a boost in the uptake of electric company cars, which is now at 21.5%. In Spain, the tax benefits for company cars are similar to those for private vehicles, primarily due to a relatively high benefit-in-kind rate. But as Spain offers minimal incentives for companies to opt for electric cars, the uptake of corporate EVs is only at 3.7%, T&E reports.
Meanwhile, EV sales in Europe have dropped, with sales of BEVs dipping 44% in the EU in August. Germany, the largest EV market, reported a decline of 69%, while France saw a drop of 33%, according to industry data reported in Reuters.
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