The appearance of the electric car brings with it some tax changes. These vehicles, which used to be heavily subsidized in some countries (and are still subsidized, notably in France), are proliferating on our roads, and the purchase incentives, which do a great job, will gradually disappear due to understandable economic reasons.

In France next year, the premium will not decrease, but cars produced outside of Europe will be excluded. Other countries are also taking action, including Switzerland, which has just announced changes to its vehicle tax regulation.

The Federal Council announced a revision of the tax policy to combat tax losses and guarantee contributions to the fund of roads of state importance and urban transport. This decision is part of the public finance consolidation program adopted at the beginning of 2023.

Serious savings at stake?

Vehicle tax law in Switzerland currently imposes a 4% tax on vehicles used for the transport of people or goods. However, electric vehicles have been exempt from this tax since its introduction in 1997, a measure aimed at encouraging the development of electric mobility.

Over the years, the number of electric cars imported into Switzerland has increased significantly. From 2018 to 2022 the number of electric cars imported annually has increased almost sixfoldincreasing from about 8,000 to over 45,000.

The first half of 2023 also saw significant growth, with around 30,400 electric vehicles imported, up 66% from the same period last year, when only 18,300 units were imported.

Subsidizing electric cars is becoming more and more expensive

This rapid growth has affected vehicle tax revenue. In 2022, tax losses amounted to around 78 million Swiss francs, and in 2023 between 100 and 150 million Swiss francs are expected, according to Federal Council estimates. If the electric car tax exemption were to be maintained, the cumulative tax losses could reach an amount estimated at between 2 and 3 billion Swiss francs between 2024 and 2030.

The Swiss government says the move should not lead to higher prices for consumers or require state subsidies. He believes that in the future it is possible to obtain a profit margin that will help maintain the competitiveness of electric cars in the market while preserving the resources necessary for the development of the country’s road infrastructure.

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