Published on June 26th, 2020 | by Maarten Vinkhuyzen
June 26th, 2020 by Maarten Vinkhuyzen
The economic slowdown from the coronavirus has induced some governments to try to stimulate the economy. Two of the Dutch incentives are worth a closer look.
Recently, a new incentive for electric vehicles was introduced in the Netherlands. We had an incentive for about €15,000 over 5 years for benefit-in-kind (BiK) company cars, renewed every time you get a new company car. Now, there is a new €4,000 incentive that private buyers can get. In the fine print, it is revealed that the budget is only €10 million. So, it is just for the first 2,500 applicants that qualify. And it is a personal incentive you can get only once. For those who only buy used cars, there is a €2,000 incentive, also only allowed once. The budget is €7.5 million. So, that is for the first 3,500 applicants that qualify.
In the Netherlands the new car market is just over half BiK company cars, and a bit less than half private buyers. BEV penetration of the BiK market is about 20% of the 250,000 new sales a year. That is 50,000 lucky people who get the €15,000 incentive. Did I mention that BiK drivers are overwhelmingly conservative voters? The main supporters of the Prime Minister’s party?
The private buyers are buying about 200,000 vehicles per year. Often, they are buying the lower-cost models in the A-segment and B-segment. The 2,500 that can get the token €4,000 are mostly voters of the more liberal parties. There are many civil servants, teachers, and healthcare workers among them. BiK cars are of course for the better paid employees of the private sector.
This incentive for private buyers has been discussed for years — “too expensive” was always the argument. Difficult new laws and regulations are needed, whereas the BiK incentive could use the existing tax laws. But the coronavirus changed all this. The economy needed a big stimulus and one of the main motors to get it going again, according to the government, could be the EV subsidy for private buyers.
The automotive sector is not the only sector hit hard. Another sector is the airline industry. With many borders closed, people restricted from traveling, and holidays cancelled, this economic sector is really hit hard.
Many companies are struggling. Some are going under. But the airline industry is an industry of “National Champions.” Two of those champions are Air France and Dutch KLM, which merged into a single company, but not completely. The French government is supporting Air France with €7 billion ($7.7 billion) and the Dutch government is supporting KLM with €3.5 billion ($3.85 billion).
And now we have a clear picture of the Dutch government’s priorities. They have a stingy €17.5 million for EVs to fight the coronavirus slowdown and work toward a cleaner, healthier, and economically stronger future. The most frugal of the “Frugal Four” (Austria, Sweden, Denmark, and the Netherlands) is willing to supply 200 times that amount, €3,500 million, for struggling high-atmosphere-polluting KLM.
The Frugal Four are the EU countries that abhor solidarity in the face of disaster. These coronavirus victims should not bond together to help each other at this time — that is their idea. I will not discuss their policy statements, because I am too ashamed of being a citizen of one of them.
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