Switzerland ends tax exemption on EVs due to sharp rise in numbers

Switzerland on Wednesday decided to end the tax exemption for electric cars, whose growing presence on Swiss roads has cut into tax revenues.From January 1, electric cars will be subject to the same four per cent import duty imposed on traditional fuel vehicles.The government had initially introduced the exemption to encourage the use of electric cars.The government said, according to AFP, "The Federal Council takes the view that the exemption from duty as an incentive is no longer necessary, given the sharp rise in the share of e-vehicles in total car imports and the convergence of prices"The number of electric cars imported annually increased nearly sixfold between 2018 and 2022, from around 8,000 to more than 45,000 vehicles.In the first half of 2023, around 30,400 e-vehicles were imported, marking a 66 per cent hike from the same period a year earlier."This increase led to an appreciable decrease in receipts from automobile duty," the government said.By making e-vehicles subject to automobile duty, the Federal Council aims to redress this shortfall.The government also highlighted the industry's estimate that the cost of producing e-vehicles will be in line with fossil fuel vehicle production by 2025.With inputs from agencies