Yeah, Boosting Business and Potentially Bombing Budgets: The Electric Car Tax Break Debate
Automotive economist Dudenhöffer voices concern over a potential "explosive situation" in the increasing popularity of electronic service cars.
The new "Booster Electric Mobility" initiative promises phenomenal perks for companies venturing into electric vehicles. With the government prepared to deduct a whopping 75% of the cost of electric company cars from taxes, it's like hitting a million-dollar jackpot, right? Not so fast, says auto expert Ferdinand Dudenhoffer. While the move will undoubtedly spark business, he sees it as a ticking time bomb waiting to burst budgets.
Ferdinand warns that Finance Minister Lars Klingbeil is giving up precious tax revenue with this move. It may not be as eye-catching as saddling the government with new debt to dish out green bonuses to private electric car buyers. But make no mistake, the money disappears just the same in the short term.
Now, here's where things get thorny for automakers. The high-quality electric vehicles corporations are leasing to companies could easily flood the market within two years, causing a precipitous drop in used car prices. This could leave heavyweights like VW Financial Services, Mercedes-Benz Leasing, and BMW Leasing wrestling with deep-red numbers due to inflated residual values expectations.
Speaking of green bonuses, Ferdinand suggests the government should also support private electric car buyers with a purchase premium. The federal government's "Booster" immediate program focuses solely on mass-promoting electric company cars through exceptional depreciation, leaving private buyers in the dust. According to Ferdinand, throwing in a 2000 euro bonus from the state would provide a much-needed boost to the industry.
Now, don't get him wrong. German electric cars are on fire—they're fast becoming the talking point of the European market. Ferdinand applauds Germany's swift return to the forefront of e-mobility. He even credits the surge in German market registrations with boosting overall European sales figures.
But with great power comes great responsibility. And here, the potential risks for leasing companies could turn out to be a ticking time bomb that might derail the electric vehicle revolution. How's that for a curveball?
Sources: ntv.de, rog
- Electric Cars
- Electric Mobility
- Subsidies
- Leasing Companies
- Government Support
Insight: Potential Risks for Leasing Companies
The rapid proliferation of electric company cars could lead to market saturation, reduced demand, lower resale values, and financial instability for leasing companies. Additionally, overreliance on government subsidies, rapid technological advancements that render leased vehicles obsolete, and the logistical and financial challenges of building widespread charging infrastructure could complicate matters further.
- Leasing companies like VW Financial Services, Mercedes-Benz Leasing, and BMW Leasing might face financial instability due to the potential market saturation of high-quality electric vehicles, causing a drop in used car prices.
- In order to provide a much-needed boost to the industry, Ferdinand suggests the government should support private electric car buyers with a purchase premium, as the current focus on electric company cars through exceptional depreciation might be leaving private buyers behind and potential risks for leasing companies.
