Netherlands Reduces Plug-In Hybrid Tax Break, Sales Expected To Drop


Volvo V60 Plug-in Hybrid

Volvo V60 Plug-in Hybrid

The plug-in boom in the Netherlands will soon come to an end, but before that happens, expect a strong spike of sales ahead of us.

As always, in such cases everything depends on government incentives, which in the Netherlands were very high, leveraging sales (to some 12,237 – mostly plug-in hybrids – in 2014 according to the JATO Dynamics).

From 2016 on, a tax break for company cars will be significantly lowered and plug-in hybrid sales are expected to fall to regular levels.

“Automakers have been scrambling to launch plug-ins in the Netherlands to benefit from their popularity but executives say sales will fall after the government next year cuts tax incentives.

“There will probably be a big drop,” Christiaan Krouwel, product manager for Volvo Cars Netherlands, told Automotive News Europe at the auto show here last month. “We will likely go back to regular volumes.”

In the Netherlands, the average car attracts tax of 25%, while low emission PHEVs (under 50 g/km) just 7% or 14% (below 82 g/km). Next year, those figures will go up to 14% and 21% respectively.

“The generosity of the incentives mean the highest-band tax earner could save 6,000 to 7,000 euros ($6,600 to $7,700) a year.

Company car leasing accounted for 33 percent of cars sold in the Netherlands in 2014, compared to 36 percent for private sales, according to figures from makers’ association RAI Vereniging. Cars registered by automakers themselves accounted for 17 percent.”

Now we get to observe the rush. BMW said that they will sell literally every unit of recently introduced X5 PHEV that they can get in the Netherlands.

Volkswagen Golf GTE

Volkswagen Golf GTE

Strong incentives attracted even Ford, which offers C-Max Energi in Europe only in the Netherlands. Early best selling models were the Mitsubishi Outlander PHEV (in 2014 7,699 out of the 19,855 in Europe) and Volvo V60 Plug-In Hybrid. Volvo stated that 90% orders for the new XC90 are for the XC90 T8 plug-in hybrid.

Generous incentives translated to relatively high sales – some times near Norwegian levels, although the goal of lowering emission has not necessarily been achieved, because many companies bought plug-in hybrids just to save money on tax and use the cars like conventional vehicles without charging them at all.

“The Dutch government is reducing incentives because many plug-in owners are not using the electric drive but are just running their cars on gasoline or diesel.”

In the first three months of this year, sales of plug-in hybrids stand at about 4,726, while all-electric sales are at 1,017. In 2016, plug-in hybrids will not overtake all-electric vehicles by this much of a margin.

Q1 results:

  • Volkswagen Golf GTE – 1,584 (best PHEV)
  • Mitsubishi Outlander PHEV – 1,227
  • Tesla Model S – 407 (best BEV)
  • Nissan LEAF – 240

Source: Automotive News Europe

Category: General

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21 responses to "Netherlands Reduces Plug-In Hybrid Tax Break, Sales Expected To Drop"
  1. Paul says:

    Holland should keep its high incentives for BEVs. PHEVs should be treated as ICEs, since many people don’t plug them in. The goal of incentives should be cleaner cities and nothing else.

    1. Mikael says:

      It’s starting to become some kind of urban myth that PHEV’s don’t get plugged in.

      Almost all PHEVs are plugged in and it makes little sense to not plug them in. Just because you might have heard about some that haven’t been plugged in much it doesn’t automatically become some kind of general truth.

      1. Assaf says:


        I think it was on this site, that study #s from the US were posted regarding PHEV electric usage.

        Volt is high (~70% electric miles), but the Ford Energis were around 30% and the PiPrius a pitiful <20%.

        With 20 miles average range that the Energi's have, if every driver cared to plug in every night, and some of them surely having plug-in access at their commute/errand destination, you should see a far higher figure than 30%.

        So there definitely *is* a substantial sub-population of the 'lite' PHEV drivers (i.e., everything except the Volt and i3), who don't really care much for plugging in.

        1. Just_Chris says:

          The environmental case for any hybrid technology is more complex than x – miles EV driving vs y – miles EV driving.

          If you drive the outlander PHEV in a way similar to the EU driving cycle (i.e. you drive like a vicar less than 25 km per day) you’ll produce less than 50 g/CO2/km. If you never plug it in and drive it around a race track (or even worse off road!) you’ll be lucky to get less than 4 times that value.

          Similarly if you drive 30 miles on the freeway at full speed in EV mode and then 10 miles in the city with the ICE on at 10 mph you’ll get much worse economy than driving the freeway stretch in ICE mode and the Town bit in EV mode. In this instance you could drive exactly the same distance but burn half the petrol depending on if you had the car in the right mode.

          Getting the best out of your PHEV is complex but if petrol is expensive enough people will get smarter.

          I don’t think you can compare the Dutch legislation to the US legislation either. If this tax benefit fades and the zero emission zones start coming into force in the major cities it could be a very cost effective way of removing pollution from dutch city centres. Time will tell.

    2. Stephen says:

      Maybe the law should state that benefit is only available if the company can prove that employee has access to a charging station at work. Hopefully the 2nd owner will be more emissions minded.

    3. Mike777 says:

      Cleaner cities and no imported oil.

  2. Assaf says:

    Yup, I never quite figured out why in Netherlands PHEVs are such a better (tax?) deal than BEVs. A bit of a circus really.

    Come to think of it, such a small country, pretty good QC infrastructure, and high gas prices. One would think an 80-mile BEV should do just fine for most people, except for this PHEV incentive distortion.

    1. Scramjett says:

      Meh, if I were living in the Netherlands, I wouldn’t even bother getting a car. Most ex-pats I’ve talked to who are living over there don’t own a car at all and have three or four bikes instead. That’s probably what I’d do.

    2. Brian says:

      My cottage is 80 miles from my house that I go out to pretty much every weekend from last weekend till Mid September. That is the main reason I don’t buy any of these silly sub 100mile BEVs.

      Next year and the year after that will really catch peoples eyes with the new Leaf and Bolt/M3 Tesla

  3. Speculawyer says:

    Netherlands needs to implement some type of V2G program so the grid can have some say in when vehicles are charged. They have a very big wind sector and it can be a bit variable. So telling cars “charge yourself now, the wind is really blowing!” would be very useful.

    And being able to say “Uh . . . could you spare some KWHs of electricity right now?” would also be very useful but apparently quite controversial. But it seems with the proper agreements & limitations (i.e. “Don’t discharge me beyond X KWH because I need to get my driver home.”), it could be done.

    1. Mikael says:

      They don’t have “a very big wind sector”. About 85% of their generated electricity comes from fossil fuels. 4% from nuclear. 5% from biomass and another 5% from wind.

      And with their extremely low and limited goals for renewable energy such as wind there will be a long time before a V2G program would be interesting and by then they probably have all the storage needed anyway.

    2. Lensman says:

      An EV owner would be an idiot to let the electric utility wear out his battery pack by cycling it for their benefit.

      If it’s cost-effective for the utility to use a battery backup for power storage, then they can — and should — buy their own batteries. If it’s not cost-effective, then that means they’re not going to pay the EV owner a fair price for degrading his battery.

  4. Robb Stark says:

    IF corporate PHEVs never get plugged in there will be a hell of a deal for used PHEVs with batteries in excellent condition.

    Not so much Urban myth when you can enter your petrol/gasoline bill on your expense report but somehow can’t enter part of your electric bill on the expense report.

    In other words at most companies, it cost employees nothing to fill their PHEVs with petrol but it does cost them to fill their PHEVs with electricity at home.

    At the very least companies should give their employees charge cards for public chargers but most don’t.

    1. Nix says:

      Robb — There was a used Volt sales specialist who used to specialize in selling Volts with low battery use reported in the OnStar data. But I can’t find them, so I don’t know if they are around anymore.

      The reason why you can’t enter your electric bill on your expense report is that the IRS won’t accept that as an itemized expense when the company goes to file their taxes.

      The company can write off gas (with a receipt or gas card bill) as a business expense, and reduce their tax burden.

      With something like getting paid for electricity to charge a company car, it instead gets counted as an “employment benefit”. You would have to pay taxes on it just like it was salary, and you and your employer would have to pay FICA taxes on it. It’s definitely screwed up.

    2. arne-nl says:

      Nope, you get the electricity costs at home reimbursed too.

  5. Jess Stanton says:

    Actually, a rise should be expected for fully electric driven cars here in the Netherlands. Details are yet unknown but it is unlikely that the government will stop incentives in 2017, and will instead steer towards more eco friendly cars since the current tariffs are based on aged CO2 emissions and are no longer an incentive for car manufacturers to lower ghg emissions.

  6. Nix says:

    A friendly reminder — Incentives are SUPPOSED to expire.

    They are designed to go away as EV’s “cross the chasm” from limited production vehicles to mass market vehicles.

    I have no problem with incentives expiring. But I’d rather see a slower ramp-down than this.

    EV’s still need to sink some money into added range before they can really concentrate on cutting prices.

    1. Lensman says:

      I agree on all points, thanks.

      With less than 2% penetration of the new automobile market by plug-in EVs, it certainly is too soon to be phasing out the incentives. Maybe when they get up to 15% or so, it will be time.

  7. veselin says:

    What about pure Ev’s? Will they continue to benefit?

    1. arne-nl says:

      Yes, their tax rate will stay at 4%.

  8. arne-nl says:

    They said the same 2 years ago, with the tax rate going from 0% to 7% on 1-1-2014. But sales were pretty stable over 2014 compared to a year earlier.

    Going from 7%/14% to 14%/21% (for PHEV and low CO2-emission cars respectively), the 7 percentage point difference remains. Combine that with falling battery prices and thus PHEV prices, and I dare to predict that the effect will be limited.

    The first months of 2016 of course will see negligible PHEV sales. Many lease contracts that expire early 2016 will be pulled forward to take advantage of old tax regime. But sales will rebound later in 2016.