Analysis: Which vehicles will be covered by the potential tax on the “heaviest” light vehicles sold in France
- A bill project has been communicated these recent weeks, which intends to tax vehicles sold in France according to their weight. The bill project targets vehicles over 1400 kg (curb weight) and for this purpose envisages a penalty of 10 euros per kilo above a weight of 1400 kilos. No tax would be applied for models under 1400 kilos. The aim of the bill is to push buyers to acquire lighter vehicles and small electric vehicles, mainly from the A-segment, a category where the offer is still underdeveloped.
- Inovev analysed the models sold in France that would be the most affected by this measure and established a scenario based on vehicles sold and produced in France in 2019.
- Thus, totally, 33% of vehicles sold in France in 2019 could be impacted, i.e. 890,000 units. Of these 890,000 units sold, 350,000 are produced in France and would therefore be affected by this decision (ie 39%). These 347,000 units produced in France represent 16% of the yearly production in France.
- Which vehicles could be impacted?
• For passenger cars (PCs), the most impacted segments in France (based on 2019 sales) would be the upper C/D/E/F segments which represent 52% of the 890 000 units. In the B-segment (7% of the vehicles impacted) consists mainly of battery electric vehicles, including the Renault Zoé. However, the impact of this measure on the Renault Zoe should be moderate, because on one hand the penalty would be quite low (around 700 Euros) and on the other hand the bonuses available today would strongly offset this tax.
It should be noted that among all the vehicles affected, SUVs represent 352,000 units or 66% of them.
It should be noted that among all the vehicles affected, SUVs represent 352,000 units or 66% of them.
• Light utility vehicles (LUVs) represent 38% of the vehicles affected, mainly in the upper segments N1-2 and N1-3, but also the N1-1 in electric motorization. Pick-ups represent another highly impacted category, but low in volume (15,000 sales).
- In France, the carmakers who would be the most affected would be Renault (18% of the vehicles targeted) which markets and produces in France all of its utility vehicles, the electric Renault Zoé and its high range (Scénic, Talisman, Espace). Volkswagen (10%) and Peugeot (10%) would also be strongly impacted.
- In terms of volume, the most impacted passenger cars would be the Renault Scénic, Citroën C5 Aircross, Peugeot 5008, Volkswagen Tiguan, Volkswagen T-Roc, Nissan Qashqai and Renault Zoé. The most impacted LUV models would be the Renault Master, Renault Trafic, Fiat Ducato, Peugeot Boxer, Citroën Jumper, Peugeot Expert and Citroën Jumpy.
- Could this project bill be also applied by other European countries? It seems complicated at first glance because European countries rarely agree on a specific economic measure and because the interests are very different from one country to another. Germany, for example, could not take up this proposed measure as it is proposed in France, because the average weight of vehicles produced in this country as well as those sold locally is much higher than in France. However, a measure of this type but at a different level (at a higher weight in Germany?) is not totally impossible, because environmental issues must be played out at a European level.
- Finally, it should be noted that, in France, this bill project will probably not be proposed for the 2021 budget but the proposal could nevertheless come back from 2022.
Note to the reader: This analysis was written and published before the announcement of new amendments, including the latest for a weight tax for non-electric passenger vehicles (thermal and hybrid) with a weight over 1,800 kg. Therefore, a second analysis will be published soon.
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