The European electric vehicle industry is booming. Over the past year, more than one million new electric passenger vehicles were registered in the European Union, and the available data shows that the number will continue to grow. The Nordic countries, in particular, are the leading sellers. Would you like to know how the Czechia, Slovakia or our neighbours are doing? And are there subsidies that can help you get your dream vehicle? Find out everything you need to know in our article.
CZECH REPUBLIC
We will not start on a very positive note when we say that the number of newly registered battery electric vehicles (BEVs) represented only 3% of the total number of registrations in the Czech Republic last year. In the EU, a total of 1.5 million battery electric vehicles (BEVs) were registered in 2023, increasing their share in all registered vehicles to 14%.
In a country-by-country comparison, the Czech Republic is at the very bottom of the ranking, leaving only Croatia and Slovakia behind. Sweden is at the top with 38% of vehicles sold. Our neighbours need not be ashamed of their results either. Austria and Germany take the top spots with around 19% and 18%, respectively.
Currently, there are over 22,000 battery electric passenger cars on the Czech roads; their number increased by 6,700 in 2023. Most of them, however, have been purchased by legal entities. The fact that not many individuals wish to buy electric cars may be due to the unfavourable system of subsidies supporting their acquisition. While in other EU countries, the system of subsidies for the purchase of electric vehicles for individuals have long been in place, the Czech Republic is lagging behind in this respect.
Let's take a look at what subsidies you can apply for
At the end of last year, the Ministry of Industry and Trade published a new call for support for electromobility for electric and hydrogen-powered cars and trucks and for the construction of charging stations.
Support will be provided in the form of a bank guarantee and a financial contribution through the National Development Bank. The call is designated for the business sector, to which the government is ready to contribute as much as CZK 1.95 billion. For passenger cars, the subsidies can amount to CZK 200,000, for trucks and hydrogen vehicles even up to CZK 300,000. A subsidy of up to CZK 100,000 will be available for the purchase of charging stations.
Applications can be submitted from 1 January 2024 to 30 September 2025 at National Development Bank branches.
Programmes prepared by the Modernisation Fund are also worth mentioning. Programme TRANSCom should be designated for the private business sector and is aimed at supporting non-public infrastructure, i.e. the acquisition of non-public charging stations, the acquisition of alternative fuel (electricity, hydrogen, bioCNG/LNG) passenger, commercial and freight road vehicles for business or alternative fuel rail vehicles.
The second programme – TRANSGov – will again be aimed at supporting the public sector, specifically the construction of recharging and filling stations for public transport vehicles and the acquisition of public transport vehicles with alternative propulsion systems (again using electricity, hydrogen and bioCNG/LNG).
Both are now in the ongoing subsidy audit stage. A call for applications is expected to be issued in early 2025.
You will have noticed that none of the above-mentioned projects supports the purchase of electric vehicles by individuals who are not entrepreneurs. Support and subsidies in this area are currently missing. Applicants who do decide to purchase an electric car, can at least take advantage of a subsidy for charging stations for family and residential homes. They can apply for a subsidy of CZK 30,000 - 60,000 until June 2025.
SLOVAKIA
According to data available, Slovakia has long been at the tail end of the EU in terms of its share of electric vehicles in newly registered vehicles, despite the 87% increase in the number of electric vehicles last year compared to 2022. At the end of 2023, there were approximately 10,000 registered battery electric passenger cars and small commercial vehicles, an increase by almost 4,300 new vehicles compared to 2022.
Planned legislative changes
The Slovak government responded to the situation in the field of electromobility by approving the Action Plan for the Development of Electromobility in the Slovak Republic in 2023. The Action Plan contains 16 measures and its main objective is particularly to reduce the share of emissions in transport and to accelerate the development of electromobility in Slovakia.
According to the Action Plan, the higher price of electric vehicles should be compensated through financial subsidies, funds should be drawn in the long run, and the subsidy granting rules should enable satisfaction of as much demand as possible (e.g. the Action Plan states that the speed of registration must not be the only condition for obtaining a contribution), among other things.
The Action Plan, for example, also anticipates the introduction of a right to plug. The right is to ensure everyone has access to charging infrastructure. The right is to be realised by simplifying the installation of recharging points not only in family houses and company buildings, but also in apartment blocks. The right to plug should also be linked to the simplification and acceleration of the construction of infrastructure (e.g. envisaged complete elimination of planning procedures for the construction of new charging stations).
Accounting and tax changes should also be tempting, where it should be possible to report expenses for business charging of electric vehicles on a network other than the company’s network (e.g. an employee’s home network,...) and report these as a regular tax expense.. The tax changes should also concern the reduction or elimination of the vehicle taxes and levies.
The Action Plan also includes measures aimed at changes in the construction legislation, benefits for electric vehicle owners and other measures that should help make the electric vehicle market in Slovakia more attractive.
At the same time, recent statements of Slovak government officials and other available information imply that specific legislative, institutional and financial measures to support electromobility in Slovakia could be introduced in the nearest future. These measures, as the government asserts, will be fundamental and will fully respect all European and global trends.
How are the other EU countries doing?
According to the data available on DATAFORCE, the Netherlands is the leading provider of subsidies for electric vehicles – up to EUR 14,000. France follows, providing subsidies of EUR 8,000. Until recently, Germany ranked third with subsidies of nearly EUR 5,000. However, major changes have now taken place in Germany and the subsidy for electric cars has been abolished; after seven years, the programme, during which more than EUR 10 billion has been paid out, has come to an end.
Unfortunately, the Czech Republic and Slovakia are lagging behind the other EU countries in subsidies, and the citizens in both countries will have to wait for support for electromobility (this trend is neither supported by the cabinets’ current austerity measures nor by the current situation with subsidies in Germany, which is often a source of inspiration in our region). Although Slovakia is one step ahead with its Action Plan, we and our neighbours could draw inspiration in this respect from the approach adopted by other countries.
We will closely monitor the implementation of the Action Plan as well as further development in the promotion and development of electromobility in the Czech Republic and Slovakia, and keep you posted through our regular comments on our blog.
