Federal governments commonly tax motorists with registration fees, tolls, and fuel taxes. These funds support infrastructure projects, helping to maintain and establish public roadways. While registration charges still apply to electric vehicles, EV customers also sidestep fuel taxes and benefit from incentive programmes.
Several countries are already addressing EV tax breaks. The UK recently decreased its incentive programme for electric motorcycles models over £10,000 such as Harley-Davidson's LiveWire and Zero’s SR/F. Conversely, Italy reinforced its commitment to an electric future by distributing €650 million in tax breaks to electric vehicle customers from 2022 to 2024.
If those two divergent policies aren’t indicative of Europe’s multifaceted approach to the impending electric revolution, Switzerland’s proposed EV tax certainly drives the message home. Without the ability to collect fuel taxes on electric cars, motorcycles, and scooters, the Swiss Federal Council has engaged the Federal Department for the Environment, Transport, Energy and Communications (DETEC) and the Federal Department of Finance (FDF) to present future tax measures by the end of 2023.
Of course, any proposal will require time to fine-tune, but the Federal Council aims to implement an EV tax by 2030, at the latest. Under the plan, electric vehicle owners would pay taxes commensurate to their mileage. That approach seems challenging to regulate without sacrificing the owner’s privacy or deferring to self-reported figures.
However, with most EV users charging their vehicles at home, imposing an electricity tax presents its own obstacles. Taxing a vehicle based on their roadway use may also be the fairest method for governments to fund infrastructure projects.
For now, Switzerland’s DETEC and FDF branches are still figuring out a feasible solution for recuperating lost fuel taxes, but as more and more people turn to electric vehicles, other countries may turn to the Swiss plan in the future.