After several hesitations within the government, the President of the Republic and the Prime Minister have decided. A new automobile tax indexed to the weight of vehicles will see the light of day in 2021. Mentioned for a few years, this tax device is supposed to fight against SUVs whose responsibility in the increase of CO2 emissions is pointed out by NGOs such as Greenpeace or WWF France. The Citizen’s Climate Convention brought this tax back to the forefront last June, but the idea was rejected by the Ministry of the Economy before returning today as part of the finance bill ( PLF) 2021.
Wind upright, the entire automotive industry but also the association 40 Millions of motorists denounce an ideological measure and a political display. “A car can be heavier because it has more pollution control systems and safety tools on board,” says Daniel Quéro, the association’s leader. The only tax that makes real sense from an environmental point of view would be one that takes into account exclusively the polluting emissions from the exhaust.
In fact, few vehicles will be affected. Only models over 1,800 kilograms will have to pay the tax, or only 2% of the new vehicle market. Premium SUVs and long-haul vehicles are more particularly targeted by this new tax, the amount of which reaches 10 euros per kilogram above the threshold and which will come into force in 2022.
In companies, SUVs and sedans in the upper and luxury segments are the preserve of management committees. As these vehicles are heavily affected by the penalty, professionals choose electrified versions to reduce costs. In the upper segment, the two best sellers are the hybrid versions of the Volvo XC60 and Audi Q5. In the luxury segment, four of the first five models also run on a hybrid and the fifth on electric. Among these models are the BMW X5 and Volvo XC90. The trend is expected to increase further since the new weight tax exempts electric and hybrid vehicles weighing more than 1.8 tonnes.
A more severe penalty
The 2021 PLF does not just introduce a new tax since it also increases the old ones. Having become more severe since the entry into force of the WLTP (Worldwide Harmonized Light Vehicle Test Procedure) consumption approval protocol, the penalty becomes even tougher on January 1, 2021. Each year until 2023, the trigger threshold will drop by 5 g / km of CO2. Next year, the penalty will be triggered from 133 g / km of CO2. As for the supermalus, at the time of closing these lines, the examination of the 2021 PLF was not finished and each day brought its share of amendments. Nevertheless, we seem to be heading towards a progressive weighting of the supermalus. From next year, a tariff of 30,000 euros should be applied for models emitting more than 218 g / km of greenhouse gases. The ceiling would be increased by 10,000 euros per year to reach 50,000 euros in 2023.
On the other side of the board, the premium attributed to battery vehicles is falling. Electric vehicles see the bonus go from 5,000 to 4,000 euros if the price is less than 45,000 euros and to 2,000 euros beyond this figure. For plug-in hybrid models, the boost decreases to 1,000 euros against 2,000 euros since June 1. “As of January 1, 2022, these scales will be further reduced by 1,000 euros,” indicates the Ministry of Ecological Transition. Another measure in favor of the ecological transition: the calculation of the mileage allowance will be reviewed by the government to favor low-emission vehicles.
The tax on company vehicles (TVS) is also undergoing significant development. Instead of sitting on a grid established by increments of CO2 emissions, it sets an amount for the precise emissions of each vehicle. The tax base ranges from 21 g / km (17 euros) to 269 g / km (7,747 euros). Beyond this threshold, the tax due is equal to the vehicle’s emissions multiplied by 29 euros. For a vehicle emitting 270 g / km, the TVS reaches 7,830 euros (270 x 29). In 2022, the TVS should partially merge with the special tax on road vehicles (TSVR), the axle tax payable by heavy goods vehicles, and change its name.
Taxation becomes decisive in the choice of companies. Until 2016, they could not recover the VAT on gasoline as they did up to 80% on diesel. Since then, the percentages have rebalanced and will be in full in 2021. Result: sales of diesel vehicles fall in favor of gasoline, all the more quickly as resale values plunge on the second-hand market.
Over the past four years, the relationship has almost reversed. While it did not exceed 15% of corporate purchases in 2016, gasoline represented 29% in the first nine months of 2020. At the same time, the share of diesel has increased from 81 to 52%. In the fleets, diesel is now reserved for long-distance drivers, while the gasoline engine is preferred for urban uses.
Electric and hybrid vehicles also benefit from the disaffection with diesel and tax incentives. The new models have autonomy compatible with most daily uses and their operating costs are balanced with those of thermal models. The Arval Mobility Observatory * compared the operating budgets of the petrol, diesel and electric versions of the Peugeot 208 and 3008 over 48 months and 100,000 kilometers. Each time, the versions carrying a dose of watts win the day. Between the battery-powered 3008 and its diesel counterpart, the difference reaches 13,756 euros over four years.
In the fleet market, the share of electric has quadrupled from 1 to 4% between 2016 and 2020. Companies are also succumbing to the sirens of hybrid cars. Between 2016 and the first three quarters of 2020, their penetration increased from 3 to 14%. The charging station deployment plan pleads in favor of rechargeable vehicles. The French government has announced the tripling of the number of terminals by the end of 2021 to reach 100,000 by this deadline. The fear of not being able to recharge the battery on public roads should fade and electrified vehicles sell even more.
The LLD, promoter of the battery vehicle
While 60% of new vehicles put on the road by companies are financed by long-term rental companies, this profession plays a major role in the development of practices. Among the main French and international players is LeasePlan. Of Dutch origin, the group has announced that it will no longer buy any thermal vehicles from 2030. “At the level of our overall fleet, the volumes of electric vehicles are growing by 40 to 60% each year,” explains Olivier. Debuquoy, long-term rental company consultant.
For its part, Arval, another major player in the LLD market, plans to have a fleet of 500,000 electric vehicles in 2025, which would correspond to a 30% drop in its CO2 emissions. Today, this BNP Paribas subsidiary manages 1,350,000 vehicles. “In 2020 and 2021, our ambition is to electrify our fleet at a rate twice as fast as that of the long-term rental market,” announces Alain van Groenendael, its president. This amounts to doubling our penetration rate. ”
Mobility to the rescue of fleets
Regardless of the energy studied, the year 2020 will go down in history due to the sudden shutdown of the economy following the Covid-19 epidemic. New auto sales ** to businesses plunged 21.85% in March, 85.93% in April, 43.76% in May, 34.07% in June, 1.69% in July and 7.94% in August. The recovery only took place in September with an increase of 2.9%. Companies have extended their leases and postponed refunds to deal with the crisis. Another phenomenon: to prevent their employees from having to take public transport and being exposed to the virus, companies have resorted to medium-term rental. The rental of electrically assisted bicycles (VAE) has also been a growing success. Another alternative mobility, carsharing, has been the subject of significant disaffection, the collaborative practice proving to be more exposed to health risk. Some specialized players such as Mobility Tech Green have implemented disinfection protocols that they shared with their customers on YouTube. In the end, the vehicle fleet market fell by 23% over the first three quarters of 2020. Even if they are developing rapidly, new mobilities will struggle to make up for the losses accumulated this year.
Sources: * Arval Mobility Observatory; ** AAA data.
The tax on company vehicles (TVS) completely redesigned
This is one of the surprises of the finance bill for 2021. The calculation of the TVS based on CO2 emissions has been entirely modified and simplified. Instead of a scale by installments, a system similar to that of the penalty applied to individuals is replaced. Each gram of CO2 has a price. The grid starts from 21 g / km (17 €). Surprise: for the majority of CO2 rates, the tax is falling. This is the case up to 157 g / km of CO2. The savings can reach in some cases 60%. From 158g, the TVS swings, making winners and losers.