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