Tesla Model 3 for 35,000 euros? EU plans to exempt e-cars from VAT, according to the report

At the level of member states such as the European Union (EU), financial packages are currently being prepared to support the economy weakened by the coronavirus crisis. As in the financial crisis of 2008, special attention is paid to the auto industry with its many suppliers and jobs. But while cars of all kinds were promoted with the then introduced German scrappage bonus (Tesla only had the first roadster on the market at the time), the EU now seems determined to rely on electric cars: the Bloomberg news agency reports on an internal paper from the Commission, which provides new aids for industry and customers – and a cancellation of VAT for electric cars.

19% on Tesla and other electric cars

Bloomberg’s information is based on a draft EU paper it had received. Accordingly, the sale of electric cars and the development of charging infrastructure should each be supported with double-digit billions. Massive support for the auto industry means burdening future generations with substantial debts, Bloomberg quotes from the reasoning. For this reason, the expectations of young people regarding climate change and a healthy future should be taken into account with such aid.


The most important point for buyers comes at the end of the short article, which was initially only published in Bloomberg’s stock market ticker, but was passed on to Twitter: Cars with zero emissions are to be exempt from VAT. For buyers of electric cars from Tesla and other brands, this would mean an immediate price reduction in Germany by the tax rate of 19 percent – probably in addition to the environmental bonus, which has already been increased to 6000 euros this year for vehicles under 40,000 euros net list price .

Especially at Tesla, the tax cut would amount to the fact that the cheapest Model 3 in Germany would be available at a symbolically interesting price. The standard range plus (SR +) variant currently costs at least 45,000 euros before deduction of the government premium half, i.e. ultimately 42,000 euros for buyers. Value added tax accounts for a good 7,000 euros, leaving 35,000 euros after they cease to exist. This would be a starting price at Tesla that some had hoped for a long time. For the USA, Tesla CEO Elon Musk had announced a basic Model 3 at a price of $ 35,000 , which was even officially available there for a short time; in Europe, on the other hand, it has so far remained the more expensive Model 3 SR +.

Rescue for electric car market?

But of course the EU-wide waiver of VAT would not only be a clear strengthening for Tesla, but also for the increasing number of other electric car suppliers – if they can deliver quickly enough . Due to the general economic weakness, the market research company BloombergNEF predicted a decline in sales even this year for electric cars this year – but pointed out that possible new funding measures were not taken into account in the main forecast.

No information can be found in the excerpt from Börsen-Bloomberg regarding the time frame for the EU plans. On Wednesday , however, the Süddeutsche Zeitung (German newspaper) also reported on preparations for a car package – the article mentions the same points with the exception of the VAT exemption. According to this report, the electric car measures are part of an overall aid package that the Commission will present next week.

Contact the author: darrinvaughn@wheelsjoint.com


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