A third gone. Rich subsidies for electric cars are dragging on, the state has already promised companies hundreds of millions

There is, simply put, interest in subsidies for company electric cars, which the state announced last year to great interest. In the month and a half that the call has been running, the National Development Bank (NRB) has already received over a thousand applications and approved hundreds of them. Guaranteed loans for the purchase of electric cars then exceeded a third of the set amount allocated by the state for the subsidy program. The Echo24 newspaper presents data from the NRB valid at the end of April. Apparently, this will not fulfill the fears that, in case of lack of interest, the money for electric cars would go out of Czechs’ pockets.

Rozvojová banka has started accepting applications for support for the purchase of electric cars for companies. The support consists in providing a free guarantee for the purchase of an electric car. After purchasing an electric car, businesses will be able to apply to the NRB for a subsidy of up to CZK 300,000 per vehicle and CZK 150,000 per charging station.

The support will last until the end of next year and will be financed from the National Recovery Plan directed by the EU. In total, 1.95 billion crowns are earmarked for the project from the National Recovery Plan. Of this, 1.65 billion will go to purchase vehicles and 300 million to charging infrastructure.

And a considerable amount of it should already be blocked. “Since the launch of the Electromobility Guarantee program, the Národní rozvojová banka has received a total of 1,205 applications,” bank spokeswoman Klára Vaníčková told the editorial office at the end of April.

According to her, the NRB recorded 602 signed guarantee contracts at the end of April and approved another 145 applications. “We now have 454 applications in the solution, in one case we had to proceed with rejecting the application and in three cases the clients decided to withdraw their application themselves. The volume of guaranteed loans currently amounts to CZK 726,600,000, the average amount of guaranteed loans is CZK 600,000,” she added.

Self-employed persons, entrepreneurs, as well as small, medium and large companies can submit an application under the Electromobility Guarantee program. Considering that the plan was to start paying out the subsidies in mid-April, it should not appear to be a problem to exhaust the program.

Limits for reimbursement

The program falls under the National Recovery Plan supported by the European Union. The condition is that the sale of at least 4,555 cars should be supported in this way. Finally, the state can ask the European Commission to reimburse the funds.

The resort industry, under which the program falls, is nevertheless confident that difficulties will not arise. “Submitting applications will be easy, so we expect that the entire support will be used up quickly, probably already during 2024,” believes MPO spokeswoman Petra Milcová.

Support is provided in the form of a bank guarantee for a commercial loan and a financial contribution through a development bank. From this, the state promises that even those entrepreneurs who could not afford to buy an electric car on their own will be able to get financing. In the case of the subsidies themselves, according to the ministry, this would be a too general measure without much effect.

The Czech Republic is behind

The Czech Republic has never been one of the bastions of electromobility. Czechs registered 1,307 new personal battery electric vehicles (BEVs) in the first quarter of this year, which is 1.2 percent less year-on-year. Their share in the total number of newly registered cars reached 2.3 percent, which is one of the smallest shares of all the countries of the European Union. The Brno Transport Research Center (CDV) reported on this in mid-April.

In addition to 1,307 new battery electric cars, people also registered 1,900 used BEVs in the first quarter of this year. “The Czech Republic is at the bottom of the EU countries both currently and in the long term in terms of the share of battery electric cars. This year it is in second last place, behind us was only Croatia with a share of 1.3 percent. One of the reasons for the slight year-on-year decrease in registrations of new battery electric cars in our country could be the delayed demand from companies and entrepreneurs due to waiting for the start of the Elektromobilita warranty program,” said Lukáš Kadula from CDV. This warranty program is intended for companies and entrepreneurs who plan to renew or modernize the company’s vehicle fleet, the acceptance of applications began in the middle of March this year. They can get a loan and a contribution for an electric car, a hydrogen car or the construction of a charging station.

Key subsidies

Subsidies for electric cars are considered by many to be a key motivational element for purchasing such a car. It happened in the past in the countries of Western Europe that interest in electric cars dropped dramatically when governments canceled or limited incentives. Germany was an example.

According to Zdenek Petzlo, executive director of the Association of the Automotive Industry, the problem is primarily the higher purchase price, but also the pressure to quickly switch to “greener” types of drive. “We believe that at the current stage, systemic support for clean mobility by governments remains essential. A very good example is the positive measure of Minister Stanjura, namely the reduction of the tax burden of an employee who uses a company car for personal trips as well,” he told the Echo24 newspaper.

CEO of Czech Kia Arnošt Barna partially agrees with Petzl. “The subsidy for the purchase of an electric car is absolutely essential in this area. The faster development of electromobility in Western markets was often due to the fact that local governments supported the purchase of electric cars, mostly with amounts between 100 and 300 thousand crowns per unit,” he said in a recent interview for Echo24.

According to him, the market structure in the Czech Republic is nevertheless different from that in the West. “Of the total market, corporate customers buy 75 percent of cars, and only 25 percent are bought by individuals from their taxable income. Therefore, in our case, I would consider it a key support for the purchase of electric cars for companies, because it can be assumed that private users will find their way to electric cars precisely through used cars, which are first purchased by companies and after 3 to 5 years, they retire these cars and provide access to these cars at a reasonable price to regular customers,” he adds.