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Saturday, July 9, 2022

The end of the diesel and petrol car is in sight

In Europe, the era of the gasoline and diesel engine is coming to an end. European climate ministers agreed last night that new cars with combustion engines will no longer be sold in Europe after 2035. Afterward, all new cars must be electric.

State Secretary Heijnen of Infrastructure and Water Management in the Netherlands is examining the feasibility of mandating the use of electric business vehicles beginning in 2025.

Industry associations and leasing companies are pleased with the clarity, but they have some questions regarding viability and cost-effectiveness.

Most used cars

According to the Association of Dutch Car Leasing Companies (VNA), there are roughly 9 million cars in the Netherlands, 1.2 million of which are used for business. 64 percent of these business vehicles are leased, while the remainder are owned by employers and independent contractors.

After the expiration of a contract, business automobiles frequently end up in the second-hand market after being purchased brand-new. This is the rationale behind this arrangement, according to BOVAG chairman Han ten Broeke. “The government wants to transition the Netherlands to electric vehicles. Used car sales begin with new car sales, which begin with business driving.”

In 2021, there will be 2 million used cars in the Netherlands, compared to 320,000 brand-new vehicles. The plan is to convert all business vehicles to electric power before selling them on the secondary market.

Tax benefits

The RAI Association, the trade association of automobile manufacturers, and the VNA are enthusiastic about the plans for sustainable mobility and support the climate goals, with a few exceptions. They are concerned about the availability of charging infrastructure and the ability to meet demand for electric vehicles.

The RAI believes that we should not only prioritize electric vehicles, but also hydrogen and hybrid vehicles. Renate Hemerik, president of the VNA, is concerned about the plan’s practicability and affordability. “There are enormous production backlogs for electric vehicles, due in part to the shortage of chips. The electricity network appears to be at capacity, so how can new charging stations be connected? And tax incentives for electric vehicles will end in 2025, whereas you should encourage this.”

BOVAG’s Ten Broeke concurs that the electric driver should receive financial incentives: “After 2025, the premium for electric vehicles will rise to 22 percent, despite the fact that electric vehicles are already prohibitively expensive. If you want such a measure to be effective, you must ensure that business drivers are not burdened with higher fees, so the surcharge must remain lower after 2025.”

Charging stations

One out of every two electric vehicles purchased in the Netherlands are leased. Sustainability has been a priority for these businesses for some time, and they are pleased with this trade perspective.

Niels van den Hoogen, commercial director of leasing company Athlon, deems the proposal to be sound. “If we wish to expedite the transition to electric vehicles as much as possible, these kinds of clear guidelines are required. All parties are required for viability: energy companies, the power grid, infrastructure, the government, and the automobile industry. We already have the best electric infrastructure in Europe, but if we all switch to electric vehicles, it will need to be significantly upgraded on a national and European scale.”

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