Electric vehicle premium
In the recent September Statement, the Flemish Government announced an important step to encourage private buyers to purchase electric cars. With a commitment of 20 million euros in the 2024 budget, electric vehicle incentives of up to 5,000 euros will be introduced. Although electric cars represent a growing share of car sales, it is mainly companies, professionals and self-employed people who purchase these EVs.
This is understandable, given the numerous benefits associated with professionally purchased electric cars, such as full tax deductibility, lower CO2 contributions and exemption from registration tax (BIV). However, the private market is not yet so enthusiastic.
To address this situation, the Flemish Government now has plans to encourage private car buyers to purchase electric vehicles. The announcement in the September Statement includes the allocation of 20 million euros in the 2024 budget for a new EV incentive, which will be available from 2024 on the purchase of both new and second-hand electric cars. This premium can be up to 5,000 euros, but there are some important details to keep in mind.
The EV subsidies will come into effect in 2024 and amount to 5,000 euros for the purchase of a new electric car with a list price of less than 40,000 euros. If you buy a used electric car, the premium is 3,000 euros. The most important thing to know is that this government support will be degressive: in 2025 the amounts will decrease to 4,000 and 2,500 euros respectively, and in 2026 to 3,000 and 2,000 euros. In other words, there will be a decrease of 1,000 euros for new EVs and 500 euros for second-hand electric vehicles every year.
Although currently the supply of electric cars priced below 40,000 euros is limited, it is expected that by 2024 prices will be adjusted to comply with these new regulations. Some electric cars may become cheaper, while others may become more expensive. This government initiative could also open doors to non-traditional manufacturers, including emerging Chinese players entering the European market.
In short, the Flemish Government has ambitious plans to stimulate electric mobility and hopes to use these financial incentives to convince the private market to make the switch to electric cars.
