Buying an electric car costs on average 30% more than one with a combustion engine. Price continues to be the main drawback for consumers when purchasing one of these vehicles. In fact, despite the measures implemented to promote the electrification of the vehicle fleet, sales of plug-in hybrids and pure electric vehicles in 2022 accounted for 5% and 3.8% respectively in Spain. These figures are far from those of other neighboring countries, much more advanced in the process of replacing fossil fuels, such as Germany (17.7%), France (25%) or Portugal (26.8%). But what have our neighbors done to double us in the sale of electric vehicles?
Portugal has a per capita income 20% lower than that of Spain. Furthermore, after the intervention by the European Union in the Portuguese economy in 2016, the tax on different consumer goods was increased. Cars were, in particular, the products most affected by the rise in prices, road taxes and fuel. This has resulted in the same model costing up to 15% more in Portugal than in Spain.
The Spanish government launched the MOVES III Plan in 2021, with the aim of subsidizing the purchase of electric vehicles. The aid for buyers is 4,500 euros if they purchase a pure electric car and 2,500 euros for a plug-in hybrid. Furthermore, the amount of this subsidy increases to 7,000 euros if the applicant delivers their old vehicle.
There are variations if the vehicle purchased is a passenger car, a motorcycle or an industrial van. But, in any case, the application process is long, complicated and tedious due to the involvement of the different levels of the administration. These aids can take months or even years to be awarded and, of course, the buyer receives them after paying the total amount of the car.
Additionally, buyers who benefit from the MOVES III Plan must declare these subsidies as income on their personal income tax return. The Tax Agency will demand a part of that money as it is taxed as a capital increase. These, among other reasons, have led to the withdrawal of the request for aid from this plan, which has not managed to meet the objectives set by the executive.
Meanwhile, in Portugal they have followed the opposite recipe. Instead of giving subsidies, what they have done is simply stop taxing the purchase of electric and plug-in hybrids. Thus, buyers of this type of vehicle are exempt from paying registration tax and can deduct VAT on their income tax return. All these bonuses are perceived much faster by Portuguese consumers. Because apparently in Spain, it is necessary to invest money in the purchase of an electric vehicle, but also patience.
