Flemish government adjusts EV premium to 2024 only

On Friday, the Flemish government finally agreed to adjust the premium for electric cars: the bonus can only be applied for 2024 and not for three years, as previously announced. Whether the aid will continue after 2024 will be up to the new government, as elections are due in June 2024.

The premiums remain the same: 5,000 euros for a new car with a maximum purchase price of 40,000 euros and 3,000 euros for a second-hand car with an original list value of up to 60,000 euros. The electronic counter on the Flemish government’s website, where the premium can be applied, opens on Monday at 1 p.m.

Critical report

The adjustment follows a critical report by the Council of State on the financial feasibility of the measure. For instance, there is a risk that the 20 million euros planned would be insufficient to give everyone the same premium, which could cause problems with the principles of equality and trust.

Therefore, Minister of Mobility Lydia Peeters (Open Vld) presented a new proposal to the Flemish government, finally reaching an agreement on Friday to limit the premiums to one year.

Peeters stressed that “the aim of the new premium for the purchase of zero-emission cars is to stimulate further the transition to zero-emission mobility among private individuals for whom the price threshold is still too high today compared to a fossil-fuel car. Since the announcement of this Flemish premium, the drop in prices of EVs has started to be noticeable,” she adds.

More than 30 different models

The premium applies to zero-emission cars registered from 1 January and ordered as soon as 25 September 2023. It covers zero-emission vehicles in categories M1, N1, L7e-C, and second-hand and new cars.

“Currently, the Flemish market has more than 30 different models of zero-emission cars, mostly European brands, that fall under this price. A list of eligible vehicle models is provided in the application window,” Peeters said.

Increase in km charge for trucks

Peeters previously indicated that she could release additional funds if the 20 million were insufficient. Still, within the majority, it was recently heard that she would have to find that money within her department. Ultimately, the minister took an extra 6 million from her now Climate Fund pot: this would allow 5,200 instead of 4,000 emission-free cars to receive a discount.

The Flemish government also agreed that the increased truck kilometer charges should be implemented soon. After all, a large part of the 20 million must come from there.

Energy Minister Zuhal Demir (N-VA) stressed in a reaction that limiting the scheme in time will save 53 million euros in the coming years. “Sometimes you have to dare to make adjustments, and that is what Mrs. Peeters is doing today by tying it,” Demir said. “In this way, she is fulfilling the promise she made to buyers, but at the same time, we are ensuring that the next government will not be saddled with an unnecessary legacy.”

No rush expected

If it turns out that the 26 million will not be enough, the Flemish government will again look for extra money. In any case, Peeters does not expect a rush: only 250 people have applied so far, and the dealers do not expect a real rush either, although they say that for some popular models, it is better not to wait too long, also because only limited number of cars are on offer.

Whether it will also be possible to apply for the premium in 2025 and 2026, as initially planned, is a question for the next Flemish government.

‘Measure has an effect’

Automobile Federation Febiac is reacting happily to the agreement. “That the decision has been taken is good because there is now clarity and certainty. After all, many private individuals had already bought an EV in recent months and, in the meantime, were uncertain about the payment of the 5,000 euro premium.”

“For many of them, this measure was, therefore, the reason to switch to electric driving now,” says Febiac. “We can see this in the number of registrations for January 2024, which are as much as 2.5 times higher than in the same period a year earlier. This proves that the measure does have an effect.”

Febiac is convinced that the premium announcement has triggered the private market for EVs. “Hopefully, the premium will also remain in place in 2025 and 2026 because this is the incentive needed to get private individuals to switch to electric driving,” it says.

‘Sharp deadline, boost needed’

Mobility organization Touring also reacted delightedly. According to Touring, it is “obvious” that the private market for EVs “needs a solid boost to get up to speed a bit and thus drive the greening of the car fleet”. “A private premium, even if temporary, is an appropriate way to boost that premium.”

At the same time, Touring advocated that the current and successive governments in Belgium continue to pay attention to policies that give the wind to the promotion and support of the EV market for private buyers.

“The targets and deadlines set by our regions, our country, and Europe in terms of phasing out new sales of combustion engine cars are so sharp that there remains an absolute need for a strong support policy, both in the professional and private markets. Even after the expiry of this purchase premium, which unfortunately seems short-lived,” Touring said.

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