German Association of the Automotive Industry (VDA) comments on German Cabinet decision to promote electric company cars
This decision by the German Government implements its coalition agreement on the taxation of company cars. The automotive industry regards this measure as a welcome contribution to the market ramp-up of electric mobility in Germany.
The change in the law will be relevant from 2019 to 2020, precisely at a time when the automotive industry makes a large number of new models available. In the first half of 2018, registrations of new e-autos (BEVs and PHEVs) rose by 51 percent to around 34,000 units. The market share going to German group brands increased to 66 percent (61 percent in the first half of 2017).
Company cars account for 44 percent of all new registrations of electric cars. The proportion of company cars among all new passenger car registrations is much lower, at 32 percent.
Over 57 percent of all company cars registered in Germany are in the lower segments, up to and including the medium segment. One quarter of company cars is a compact car (Golf or similar).
For professional reasons, commercial users cover higher annual mileages than private motorists. This segment therefore has the most modern technology and the project will quickly result in attractive models appearing on the used car market, because company cars are replaced more rapidly than private vehicles.
As usual, the detailed implementation of the Cabinet decision is to be examined during the legislative procedure. This applies in particular to the limited three-year period and to the introduction date, which are relevant to development of market ramp-up. In the Bundesrat the German states should quickly give the green light to this project for the environmentally friendly mobility of the future, which has now been set in motion by the parties in government.