In a controversial move, Switzerland has decided to tax electric vehicles in the same way as fuel-guzzling cars , claiming that special tax exemptions are no longer necessary
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The Swiss Federal Council announced the news yesterday, stating that it will withdraw the country's 4% import duty exemption, effective January 1, 2024. Although the exemption has been in place in Switzerland since 1997, the government considers it "nolonger necessary" due to the high adoption rates of electric vehicles in the country.
According to the announcement of the Federal Government Council, “the duty exemption as an incentive is no longer necessary, given the sharp increase in the share of electric vehicles in total car imports and the convergence of prices. Changes that serve the original intention.”
The move is hoped to address “shortfalls” in tax revenue, the statement said, and secure funding for public transport and highways. The removal of the exemption is expected to bring in between 2 billion francs ($2.2 billion) and 3 billion francs in tax revenue annually. Annual imports of electric vehicles into Switzerland increased six-fold from 2018 to 2022, reaching 45,000 units last year, the statement said, with electric vehicles accounting for 23 percent of all car imports.
According to Bloomberg, car importers in Switzerland are disappointed by the new decision, saying it is “a black day for electric mobility in Switzerland.” Peter Gruenenfelder, president of the auto importers’ association Auto-Suisse, told the newspaper that the new measures are “in sharp contrast to the CO2 reduction targets for new vehicles that the government itself has set.”
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The European Union aims to cut emissions from cars by 55% from 2021 levels by 2030 and reach zero by 2035. To help offset the higher upfront cost of electric cars, 21 of the 27 EU member states offer tax breaks for buying an electric car, according to the European Automobile Manufacturers’ Association (ACEA). Twenty countries offer cash to help buy electric vehicles, along with other perks such as parking and the right to use bus lanes. But Germany – Europe’s biggest polluter – is cutting subsidies for electric vehicles as more people buy them, saying the subsidy program is no longer sustainable
The withdrawal of tax exemptions for electric vehicles is expected to affect the rate of adoption of electric vehicles in Switzerland. Tax exemptions are an important incentive for consumers to choose electric vehicles, as they reduce their acquisition and operating costs. The withdrawal of these tax exemptions is expected to make electric vehicles less affordable for consumers, resulting in a decrease in the number of purchases and their adoption.
The withdrawal of tax exemptions may affect the economic attractiveness of electric vehicles in Switzerland. Consumers considering the purchase of an electric vehicle take into account the cost of acquisition and operation. The withdrawal of tax exemptions may increase these costs and make electric vehicles less attractive compared to conventional internal combustion vehicles.
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The withdrawal of tax exemptions may affect the charging infrastructure for electric vehicles in Switzerland. Tax exemptions are often accompanied by investments in charging infrastructure in order to encourage the use of electric vehicles. With the withdrawal of tax exemptions, it is likely that funding for the development of new charging stations will be reduced and consumer access to chargers will be limited , thus reducing the convenience and ease of charging electric vehicles.
Source: electrek
