Economy & Politics

Electricity between Turmes and the automotive sector

The announcement by the Minister of Energy not to extend the tax benefit linked to company vehicles only for electric models is not to the taste of automotive professionals. And to honk loudly on Claude Turmes’ alone rider

Patrick JACQUEMOT

Patrick JACQUEMOT

The announcement by the Minister of Energy not to extend the tax benefit linked to company vehicles only for electric models is not to the taste of automotive professionals. And to honk loudly on Claude Turmes’ alone rider

To hear Claude Turmes (Déi Gréng), Friday, the anger of the House of Automobile (HOA) rose in the towers. It is impossible for the regrouping of the federations and associations of the Luxembourg automotive sector (FEDAMO, mobiz, FEBIAC) to follow the path proposed by the Minister of Energy. Namely withdraw the tax advantage to company cars that are not 100% electric.

Did the sector need such an announcement? Certainly not at a time when garages and concessions are restarting slowly after two months of stopping all commercial activity. But worse than the timing, it is the very nature of the measure that strikes the HOA. Because if the Green Minister bases his desire for tax reform on the application of the new National Climate Energy Plan, professionals have found no trace of the change mentioned in the pages of said environmental program. Verification done, that’s correct.


In the future, for companies and employees, the State will only tax exemption for electrically powered models. Claude Turmes, Minister of Energy, has lifted the veil on this measure which will enter into the next tax reform.


For the secretary of the House of automobile, Frank Lentz, a question also arises: “Does Minister Turmes go it alone and present his own personal and fanatic visions or does he have the support of the whole government to move in such a direction? ” A question to which the Prime Minister has an interest in quickly answering if he does not want to back off a sector weighing some 5,000 jobs in the country. Sector that had already been irritated by the announcements of the Minister of Mobility, François Bausch (Déi Gréng), on the implementation of new standards for rating vehicle emissions.

For HOA, it is certainly necessary for Luxembourg to gear towards a “progressive and thoughtful electrification of the rolling stock”. But this objective cannot be reached on foot, many obstacles remain on the road: “The current reality still lacks available models with longer delivery times, but above all sufficient charging infrastructure”, note so the professionals. Without even mentioning the price of vehicles which sometimes remain the main obstacle to purchasing.

A more efficient fleet

In fact, electric vehicles do not represent 1.8% of registrations (2019 figures). More than 92% of the market for new registrations remains composed of thermal engines which are favored for company vehicles traveling, in general, a very significant mileage for which electric vehicles are not necessarily suitable. And then, in terms of “environmental cleanliness”, the Luxembourg leasing fleet undoubtedly remains more up to par than the fleet of vehicles, less often replaced and therefore having less ecologically efficient engines, underlines the HOA.

So, even if the government as part of its Neistart Lëtzebuerg plan announced an increase in the purchase premium for any electric vehicle, the anger of the House of automobile did not slow down. Not until the government or Claude Turmes have, in particular, clarified their intentions on the tax system to come on company vehicles.

“We regret that in this period of health and economic crisis, where individual mobility has confirmed its importance, the Minister advances remarks derived from all logic, which threaten the survival of our businesses and endanger the maintenance in the employment of our employees, ”concludes HOA.


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