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Billions in subsidies for electric cars are a thorn in the side, but those for combustion engines remain unspoken

     
Tomáš Jelínek
23. 10. 2024 ▪ 10:21

Neither drivers nor politicians are pleased with billion-dollar subsidies for electric cars. Yet a significantly larger sum of money, which goes towards purchasing vehicles with combustion engines, is not such a big issue.

Miliardové dotace na nákup elektromobilů jsou trnem v oku politiků i řidičů, o těch na spalovací motory se ale mlčí
Billion-dollar subsidies for the purchase of electric vehicles are a thorn in the side of both politicians and drivers, but the subsidies for combustion engines go unmentioned
Photo: Unsplash

Billions in subsidies, which many countries, including the Czech Republic, have granted and continue to grant for the purchase of electric vehicles, have long been a thorn in the side of many opponents of these supports. Although EU countries, according to a recent study by the environmental organization Transport & Environment, also provide billions in support for the purchase of vehicles with combustion engines, these are no longer the target of disputes.

According to the aforementioned study, financial support for combustion engines remains extremely high in some EU countries. Corporate vehicles with conventional engines, in particular, continue to draw significant resources. For example, in the five largest EU countries, the annual subsidy for company cars with fossil fuels amounts to over 42 billion euros. Italy has the largest share (16 billion euros), followed by Germany (13.7 billion euros). This trend is in direct contrast to the policy of transitioning to electric vehicles, which includes various financial incentives and tax breaks.

Combustion engines dominate especially in corporate fleets, which is one of the main obstacles to the transition to electromobility. Although company cars account for up to 60% of all new registrations in Europe, many companies still prefer vehicles with combustion engines, often in the form of luxury SUVs. These vehicles have higher fuel consumption and produce more emissions, which directly contradicts efforts to decarbonize transportation.

While support for electromobility is successfully expanding in some countries, such as the United Kingdom, where various tax advantages for electric vehicle owners have been introduced, the overall picture in the EU is much more complicated. In Germany and France, there has been a sharp decline in electric vehicle sales following the withdrawal of subsidies for them. The German market recorded a drop of more than 68%, while in France it was 33%. The high acquisition costs of electric vehicles, lower availability of charging infrastructure, and slow consumer transition are the main causes of these declines.

Despite these challenges, billions in subsidies for electric vehicles remain a target of criticism, especially from the traditional automotive industry. Company representatives often point out the unfair competition that subsidies for electric vehicles create and call for leveling the playing field. This dispute is particularly evident in Germany, where the automotive industry holds a significant position and influence on the country's economy.

The question remains as to which direction the policy of support for automotive transportation in Europe will take. If subsidies on vehicles with combustion engines can be reduced and more support is given to electric vehicles, it could lead to the faster attainment of climate goals. For now, however, Europe is balancing between the pursuit of ecological mobility and the maintenance of traditional industrial sectors.



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The original article was published in Czech under the title: Miliardové dotace na elektromobily jsou trnem v oku, o těch na spalovací motory se ale mlčí