Despite its small size, the Netherlands is rich in culture, history and beautiful sights. The country is famous for its canals, colorful tulip fields, picturesque windmills, traditional clogs, a great one Cheese type and its bicycle culture. The Netherlands is also one of the leading markets for electric vehicles in Europe and worldwide. In 2020 21% of all newly registered cars were battery electric vehicles (BEVs) and 4% were plug-in hybrid electric vehicles (PHEVs). This high pickup rate, especially from BEVs, is evidence of the advanced electric vehicle policy that has been implemented in recent years.
In order to promote the electrification of the national vehicle fleet, the Dutch government is offering strong incentives to reduce the costs for buyers and owners of an electric vehicle. This is especially true for BEVs, which are the focus the government’s zero-emission transport strategy. People who buy or lease a new battery electric passenger car can Claim back € 4,000 by the government. For a used electric car, the amount is € 2,000.
In addition, BEV owners benefit from it Waiver of the one-time registration tax and annual property taxes or receive a reduction on PHEVs. Conversely, buyers and owners of conventional vehicles with internal combustion engines are charged particularly high vehicle taxes compared to other European markets.
How do these guidelines affect the household budget of those looking to buy a new car? One thing stands out in the following figure: Consumers get the best deal when they buy a BEV instead of a comparable PHEV, gasoline or diesel model. This is thanks to the purchase bonus of € 4,000, the waiver of registration and property tax as well as the relatively low consumption costs.
Using the example of ID.3 from VW, the deduction of the state bonus of € 4,000 from the tax value (which leads to a lower base price and lower VAT than specified in the price lists of the car manufacturer) is the cheapest alternative both when buying and when buying for 4 Years of operating costs. Gasoline and diesel vehicles face relatively high one-time registration taxes and annual taxes for vehicle ownership, which amount to several thousand euros. Compared to the petrol version of the VW Golf, private buyers who opt for the VW ID.3 BEV save € 4,500 on purchase and € 10,000 if stored for 4 years. If buyers are not lucky enough to receive the one-time bonus of € 4,000 before the available funds are used up, the cost advantage still exists, albeit at a reduced rate.
Figure 1. Four-year running costs for private vehicles in the Netherlands.
For individual consumers, the cost advantage of buying a BEV with financial and tax incentives is guaranteed. But what about company cars? In 2020, 73% of all new electric passenger cars in the Netherlands were registered by companies, compared with 27% by private individuals. Businesses also benefit from various incentives when choosing a BEV, including tax deductions for purchases.
In addition, employees who privately use their employer’s battery-electric company car, which is considered a benefit in kind, benefit from reduced amounts on private income tax. In 2020, the additional taxable income rate for BEV was 8% for the first € 45,000 the purchase price of the vehicle, including VAT and registration tax. Above this threshold, the taxable income rate was 22%.
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This higher rate also applied to all vehicles with emissions above 0 g CO2 per km. The following figure shows the effects of these incentives for the 2020 tax year. Persons with a annual taxable income of more than € 68,508 For private use of a VW ID.3 BEV company car, additional monthly income tax of € 120 was levied. In comparison, the additional monthly tax burden for the petrol, diesel and PHEV VW models was significantly higher at 340 to over 400 euros per month. The effects were also evident for taxable annual incomes below € 68,508.
Figure 2. Additional monthly income tax burden for employees who privately use a company car in the Netherlands in 2020.
Residential and business customers in the Netherlands who are focused on costs should opt for a BEV. But is this reflected in the vehicle market? If the acceptance of electric vehicles by private and new vehicle registrations by companies is differentiated in 2020, the following figure shows that 67% of private individuals and 74% of companies opted for BEVs in the first half of 2020, 73% and 90% respectively, in the second half. This finding is not surprising given the government’s ambitions and strategies to promote zero-emission vehicles, i.e. BEVs and fuel cell electric vehicles.
Figure 3. New registrations of electric vehicles in the Netherlands in the first or second half of 2020 by individuals and companies (company-related data exclude short-term rentals and registrations by dealers and manufacturers).
New registrations of electric passenger cars showed an upward trend in 2020, as shown in the following figure. New electric passenger car registrations, including BEVs and PHEVs, fell dramatically in January 2020 compared to December 2019, from 55% to 8% of all new car registrations. This decrease can be explained by stricter additional income tax rates for privately used battery electric cars by employees, which rose from 4% to 8% on January 1, 2020. While other European countries listed a high acceptance of electric cars from January 2020 than tighter CO2 emission The standards set by the European Commission for new passenger cars have been introduced. This effect was canceled out by the Dutch tax change. The global COVID-19 pandemic from March resulted in a slight decrease in registrations for electric passenger cars from 17% in March to 14% in April and May.
The market recovered from August with continuously increasing shares of more than 20%. This was likely aided by the newly introduced purchase bonus for private BEV purchases and leases, although funds were exhausted within a few days. Similar to the end of December 2019, consumers also ensured that a BEV was secured in December 2020, as the additional taxable income rate for privately used battery electric cars increased by 4 percentage points to 12% and the threshold was lowered from € 45,000 to € 40,000 from January 2021. The result was a historic share of 72% (69% BEV and 3% PHEV) in new registrations of electric passenger cars in December 2020 and a sharp decline to 11% (3% BEV and 8%). PHEVs) in January 2021.
Figure 4. Monthly registrations of BEVs and PHEVs in the Netherlands between October 2019 and January 2021.
The Netherlands set a good example by introducing strict incentives for electric vehicles, especially BEVs, while also providing incentives in the form of significantly higher taxes on gasoline and especially diesel vehicles. These activities are flanked by additional campaigns.
The Netherlands have that highest number of public charging stations for electric vehicles and per 100 km2 in Europe. In addition, some Dutch city and local governments such as Amsterdam, Rotterdam and The Hague offer Free public charging stations on request by individuals and businesses who cannot top up at home or at work. In addition, cities like Amsterdam aims for all traffic in the city to be emission-free by 2030. The government is also aiming for at least 30 cities to introduce zero-emission zones for urban logistics by 2025. In addition to politics, consumers can also choose from an increasing number of electricity models for sale. In 2020, if you just look at BEVs, over 60 different models were newly registered in the country.
The Netherlands is evidence that national and local policies play a key role in promoting electrification, and particularly in the transition to BEV. This means that the country is well on the way to achieving its goal for 2030 of only selling zero-emission new vehicles.
This items was originally published on Theicct by Sandra Wappelhorst and republished under Creative Commons.
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