A premium offered by the Flemish Government to encourage people to buy an electric car will soon be discontinued. The scheme was initially due to last until the end of 2024, however its "great success" has cost the government nearly twice as much as expected.
When launched in February 2024, the Flemish Government wanted to push the green transition by offering a €5,000 grant to people purchasing a new electric car priced under €40,000. People buying a second-hand electric car initially priced at up to €60,000 received €3,000.
"After the premium was announced, some car manufacturers such as Tesla lowered the prices of some models to fall below the €40,000 threshold," said the new Flemish Mobility Minister Annick De Ridder (N-VA) on Thursday. "While the scheme certainly succeeded in pushing drivers to opt for zero-emissions vehicles, it cost almost twice as much as the original budget."
Therefore, the new Flemish Government decided to end the premium "as soon as possible," De Ridder stated.
Up to €70 million
Introduced by the previous Mobility Minister Lydia Peeters (Open VLD), the scheme caused a surge in sales, with more new electric cars registered by early October than for the whole of 2023. However, the €25 million budget allocated to the premiums was already surpassed in May – something the Council of State had previously warned could happen.
The previous Flemish Government had planned to also offer a premium for electric cars purchased in 2025 and 2026. This was changed in February due to concerns about the high cost of the premium. The premium was discussed in negotiations to form the current Flemish Government, and it was decided that the premium would finish even earlier, before the end of 2024.
This week, the Flemish Parliament brought forward the final purchase date from 31 December to 22 November. "Anyone who buys an electric car before 23 November is still entitled to the premium," said Flemish MP Bert Maertens (N-VA). Providing that the sale agreement is concluded before 23 November, buyers have until 31 December to register for the premium.
According to an update two weeks ago, 11,590 premiums were claimed (9,736 for new vehicles, 1,854 for used ones). The government has already paid out about €40 million in premiums; this is expected to rise to €70 million.
The Flemish Council of Ministers at a plenary session of the Flemish Parliament in Brussels on Wednesday 02 October 2024. Credit: Belga
Car manufacturers are unhappy with the decision to end the scheme early, arguing that it creates "legal uncertainty and nervousness" among buyers and sellers.
"Buying a new car is not an impulse purchase. Anyone who was planning to buy a new car in December will just buy it a bit earlier. So stopping the premium a month earlier won't save the government much," Kris Gysels, director of public affairs at carmakers' federation Febiac, told VRT.
He added that the premium was one of the Flemish Government's most successful climate measures. "Compared to other climate measures, they managed to get many private individuals to opt for electric vehicles with a fairly small budget. The premium was definitely a success."
