1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

Impact of National Wealth and Incentives on Electric Vehicles Market Development in the EU

Tereza Hrtúsová Česká spořitelna, a. s. Economic and Strategic Research Budějovická 1518/13b, Praha 4, 140 00 Czech Republic e-mail: thrtusova@csas.cz

Abstract Pressure to reduce carbon dioxide emissions in transport is increasingly strong and there will be no easing in the near future. The European Green Deal published by the European Commission in December 2019 is a clear message to car makers that investing in alternative fuels is the only way to meet the emissions reduction goals set by the European Union. Electric vehicles are most likely to be at the forefront of cars powered by alternative fuels in the EU market. European Union Member States take different approaches to incentives and other support for purchases of electric vehicles. The aim of this paper is to outline the types of tax and investment incentives available to consumers to buy an electric vehicle within several EU countries and evaluation of their effectiveness. The paper will also analyse the relationship of the current market share of electric vehicles in EU countries to level of national wealth. It will also give an overview of the availability of infrastructure for recharging electric vehicles in EU countries and assess its importance to electric vehicle sales. Keywords: Czech Republic, electric vehicles, incentives, infrastructure JEL Classification: L62, L94, O31 1. Introduction Emissions of carbon dioxide by vehicles used for personal transportation in the EU constitute about 12% of the EU’s total carbon dioxide emissions. In the Czech Republic that share of the total emissions is only 9% (Eurostat, 2017). Regardless of improvements in the automotive industry, transport still has a negative impact on air quality (Tucki, 2019). Limits imposed on carbon dioxide emissions from newly registered passenger cars are becoming stricter, and the use of alternative fuels is the only way for car makers to meet the new requirements. It is becoming clear that of all the available means of propelling automobiles, electromobility, in full or in hybrid form, will take the lead (Harrison 2018). According to EU Directive 2019/631 (European Commission, 2019), beginning in 2021 the average emissions of carbon dioxide of the newly registered passenger cars produced by a manufacturer will not be allowed to exceed 95g CO 2 /km. Before the year 2030, manufacturers will be required to further reduce emissions of CO 2 produced by new passenger cars by another 37.5%, compared to 2021 limits. If a manufacturer

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