Home » Economy » Should Electric Vehicles be Taxed in France? – The Future of TICPE and Clean Mobility

Should Electric Vehicles be Taxed in France? – The Future of TICPE and Clean Mobility

2023-06-13 07:55:00

In 2019, the TICPE brought in 37.7 billion euros. (GoranH/Pixabay)

With the future ban on thermal vehicles for sale, the State and the regions will deprive themselves of the manna of the TICPE levied on fuels. The idea might be to tax electric car models, while the sector currently benefits from numerous aids.

For several years now, electric cars have benefited from numerous aids in France. Buyers of 100% electric vehicles are at an advantage because the government, with the transition to clean mobility, wants to do away with combustion vehicles. However, fewer thermal vehicles in circulation represent less tax revenue with the internal consumption tax on energy products (TICPE), underlines Capital . Should electric vehicles be taxed?

500 billion euros to fill

The TICPE is a godsend. In 2019, this fuel tax brought in 37.7 billion euros. The state took 17 billion while the French transport infrastructure financing agency recovered 1.6 billion euros per year over the period 2013-2017 and 3 billion euros in 2020. Regions and the departments received 12.9 billion euros in 2019.

The transition to clean mobility has a cost: by adding the cost of installing charging infrastructure, the subsidies granted and the loss of revenue from the TICPE, 500 billion euros will soar over 20 years. according to a 2019 report by the Parliamentary Office for the Evaluation of Scientific and Technological Choices (OPECST). The penalties on thermal cars can slow down the deadline. “But since the objective is to no longer sell them from 2035, the State will have to replace the current tax mechanism with another” explained to our colleagues Paul Malliet, economist at the French Observatory of Economic Conditions (OCFE).

A tax per kilometer?

In Australia, two states have introduced a kilometer tax on electrified vehicles (electric and plug-in hybrids) since 2021. In Norway, which has a large fleet of 100% clean vehicles, the country would like to tax luxury cars up to 25%, i.e. over 60,000 euros, whether thermal or electric. For the moment, in France, each recharge is taxed like electricity at home with the internal tax on final consumption of electricity (TICFE), local taxes, VAT and the tariff contribution for routing (CTA) . But nothing prevents the government from imposing the equivalent of the TICPE.

Even if electricity consumption will increase by 43% from 2020 to 2050 according to RTE figures, this will never compensate for the tax losses of the TICPE. In the OPECST report, it is recommended to apply “road pricing”, a tax per kilometer, rather than per electric kilowatt hour.

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