October 21, 2024 04:22 AM
Company car drivers receive an average annual tax benefit of between €6,800 and €21,600 in the EU countries , environmental group Transport & Environment says.
The EU’s five biggest members spend €42 billion ($45.60 billion) annually subsidizing fossil-fuel company cars, according to a study commissioned by environmental group Transport & Environment (T&E), which called for more subsidies for EVs instead.
Company cars make up around 60 percent of new car sales in Europe.
Italy provides €16 billion in subsidies for fossil-fuel company cars, followed by Germany, which provides €13.7 billion, the study by consultancy Environmental Resources Management (ERM), released on Oct. 21, showed.
France and Poland provided €6.4 billion and €6.1 billion annually respectively.
Companies offer cars as perks for employees, often with significant benefit-in-kind subsidies including offsetting consumer taxes and fuel usage benefits.
Around €15 billion across the four countries goes to subsidizing SUVs, the study found.
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Company car drivers receive an average annual tax benefit of €6,800, ranging up to €21,600 for high-polluting larger models.
“This is completely illogical and completely unacceptable, that we’re still pouring billions of taxpayer money into a technology that’s completely contradictory to the European Commission’s green transition agenda,” T&E’s director of fleets Stef Cornelis told Reuters.
The study comes as Europe’s EV sales have fallen, in part because they are more expensive than fossil-fuel equivalent models and thus out of reach for many consumers.
Sales of full-electric cars slumped 44 percent in the European Union in August, as its biggest EV markets Germany and France recorded drops of 69 percent and 33 percent respectively, according to industry data.
The ERM study found that financial incentives for drivers of company cars to switch to EVs are only provided in former EU member the U.K.
European Commission President Ursula von der Leyen told the European Union’s new climate chief Wopke Hoekstra in a letter dated Sept. 17 that one of Hoekstra’s priorities will be to propose how to phase out fossil-fuel subsidies.
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