'GDP and taxes affect affordability of electric cars'

Netherlands and Sweden dominate electric car market in Europe due to taxation system, European car association head says

Gökhan Ergöçün   | 18.12.2019
'GDP and taxes affect affordability of electric cars'


GDP, subsidies and taxation affect affordability for electric cars deterring their market penetration, the director-general of European Automobile Manufacturers Association (ACEA) said late Tuesday. 

The Netherlands and Sweden dominate the electric car market in Europe due to their taxation system, Eric-Mark Huitema told an event organized by Turkey's Automotive Manufacturers' Association in Istanbul.

The taxation rate is 25% for corporate cars in the Netherlands and Sweden, while only 4% for electric cars, he said.

"If you have rich countries with lots of rich citizens, of course, they can afford these cars," Huitema noted. 

Touching on the Turkish automotive market, he stressed Turkey has lots of petrol, diesel, LPG, and LNG engined vehicles. 

LNG type engines have lower CO2 emission and Turkey has already done a great job, he said. 

This situation could be the reason for the slower spread of electric cars in the Turkish market, he added. 

Referring to self-driving cars, he said people can read a newspaper or do their work when they are in a traffic jam. 

"You don't care anymore about traffic jams because it has become work time and you don't have to look at the road anymore," he said.  

Car sales in Turkey 

Haydar Yenigun, the head of Turkey's association, said during the recent period there were many problems in the automotive sector but some measures such as tax exemptions and incentives relieved the market. 

But short-term incentives cannot survive and develop the sector, he added. 

"All stakeholders should come together for shaping the Turkish automotive economy as a locomotive for the future again," Yenigun noted. 

He stressed that Turkey should prepare plans for reaching 1.5-2 million units of vehicle sales figures in the long run. 

The automotive market sales figures were around 1 million units during 2015 and 2017, but dropped to 670,000 last year and are expected to decrease to around 450,000, he said. 

He said: "We expect a rebalancing process next year, sales will rise by 15-20% to reach around 600,000 units." 

At the meeting, reports titled Emerging Disruptive Automotive Technologies and Logistic Strategies were released.

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