Many drivers buy a hybrid car for tax reasons, but hardly ever drive on electric power. For that reason, the Belgian tax authority announced last year that plug-in hybrids would be taxed more heavily from 2020 onwards. The heavier the car, the larger the battery needs to be (0.5 kilowatts per 100 kilograms). What is more, the car’s CO2 emissions will only be allowed to be 50 grams per kilometre to continue to benefit from tax breaks.
Add to that the new WLTP standards that were approved last summer. The new, stricter WLTP testing cycle attributes higher CO2 emissions to plug-in hybrids, even to the extent that many models will become less attractive from a tax perspective. For that reason, various manufacturers are putting sales of their plug-in hybrids temporarily on hold.
Volkswagen, BMW, Mercedes-Benz and Porsche are not selling their plug-ins until a solution is found for this problem. That means for example that the Volkswagen Golf GTE and Passat GTE, respectively the fourth and second most popular plug-in hybrids in Europe, can no longer be ordered, and neither can the plug-in version of the Porsche Panamera, which accounts for 69 per cent of the model’s sales. Ludovic De Borle explains more.
What effect have the tax authority’s announcements and the WLTP standards had on sales figures for hybrid cars?
“The Belgian tax authority’s announcements last year hardly influenced our sales figures at all: in the spring of 2018, in fact, we still sold hundreds of relatively expensive hybrids. But then, when the new WLTP standards were announced in the summer, the tide turned. Today’s generation of plug-in hybrids no longer passed the homologation tests, which is why many manufacturers have put the production of plug-in hybrids on hold. Most models will not be back on the market until the summer of 2019.
Although plug-in hybrid cars are still popular with our leasing customers at the moment, sales are no longer growing. In fact we are expecting an enormous dip at the beginning of 2019. I expect Belgian drivers to go for cars with a traditional combustion engine instead of plug-in hybrids. The range of fully electric cars on offer is still limited, after all, and most drivers feel more comfortable trying a hybrid as a stepping stone.”
Do you believe that this is the end of the plug-in hybrid?
“No, the technology is improving in leaps and bounds. Manufacturers are announcing a lot of new models with larger batteries. The new generation of hybrids will be able to travel a maximum of up to 100 kilometres on electric power, rather than 50 kilometres. That will not only mean these models can pass the WLTP tests more easily, but they will also be more attractive from a tax perspective.
In a small country like Belgium, a plug-in hybrid with an effective range of 100 kilometres is the ideal car. Most of our journeys are less than 100 kilometres per day. Hopefully this new technology will ensure that more people make the transition to a hybrid car, which will familiarise them with driving on electric power and help them make the change later to a completely electric car. So we are only facing a temporary dip in sales figures.”
After a few years’ break, car manufacturers are also putting diesel hybrids back on the market. Do you think that’s a good thing?
“It’s a mixed blessing. Because traditional diesel engines are getting less and less popular, the manufacturers are trying to find a new outlet for their diesel car production capacity. Putting diesel hybrids on the market again keeps the factories economically profitable for longer.
The question is whether there is still a market for diesel hybrids today. In certain areas there is, because the plug-in hybrid petrol car is only a solution for people who drive long distances only occasionally. People who drive long distances frequently are better off with a diesel hybrid. That minimises your fuel consumption.
However I am afraid that these models will come onto the market precisely at the point when consumers are scared off by diesel prices at the pump. Diesel in Belgium has become more expensive than petrol, which makes diesel hybrids a lot less attractive.”
Do you think the new generation of hybrids will change anything when it comes to consumer behaviour? Will they drive more on electrical power?
“I think so. It is difficult to motivate someone to charge their car every day, which is something you need to do with a limited range car. But with a hybrid that can drive up to 100 kilometres on electrical power every day, drivers no longer need to charge their cars every day. That lowers the threshold for the transition to driving on electric power all the time.
Businesses can play an important role here by providing charging facilities both at the office and at home. That encourages employees to drive on electric power as much as possible and only use petrol or diesel for exceptionally long distances.
What is more, it is the Belgian government’s job to use tax policy to encourage drivers to use their hybrid cars appropriately and charge them conscientiously. At the moment, the tax policy only depends on the car’s technical specifications, not on how it is used: that is a missed opportunity.”Back to overview