2023-10-04 16:00:26
End of TSCA exemption for electric vehicles
The tax exemption on insurance contributions was not renewed by the government for the year 2024. Created in 2021, this tax exemption aimed to promote cars that are less polluting than thermal vehicles and to make their acquisition as well as their use more financially attractive. This measure was put in place to stimulate the market for electric cars at a time when they were still not widespread.
This exemption allowed owners of electric vehicles to benefit from more advantageous auto insurance contributions: – 33% on civil liability and – 18% for damage guarantees. This tax favor therefore had a double advantage: encouraging the purchase of electric vehicles and reducing their total operating cost. However, with the democratization and massive adoption of these vehicles, the tax exemption seems to have fulfilled its role. The State is preparing, as it had done previously to encourage the French to buy diesel vehicles, to recover a tidy sum from the backs of motorists using electric vehicles.
Towards a surge in auto insurance prices
The insurance industry is far from reassured by the end of TSCA. On average, a car insurance contract for an electric vehicle costs around 570 euros per year. The end of the TSCA exemption might result in an increase in auto insurance rates of 12 to 15% for comprehensive insurance and 20 to 25% for a third-party insurance contract.
Beyond the end of the TSCA exemption, the government plans for 2024 to tighten the conditions of access to the ecological bonus for certain automobile manufacturers. This will take into account the overall ecological performance of the vehicle, including its production and delivery. Priority will be given to vehicles manufactured in Europe. In other words, electric vehicles produced in China or the United States, for example, will no longer be able to claim the ecological bonus.
Without these tax benefits, some buyers may be tempted to switch to gasoline or diesel vehicles, or to delay their decision to purchase an electric vehicle. Others might consider canceling their car insurance contract, which is rather worrying… Indeed, according to a study carried out by neo-insurance Leocare which was published on Tuesday October 3: 69% of French motorists find car insurance prices too high, and nearly 28% admitted to not being insured.
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