Looking back on 15 years of addition: many winners but also losers

Once the man decided which car would be parked in front of the door, with emancipation the woman was increasingly given a say or veto, but since 2008 – for business drivers at least – it has increasingly been the tax authorities that pull the strings in the showroom. Until 2008, it was all simple: anyone who had a company car and drove more than 500 km per year privately, had extra income in kind in the eyes of the tax authorities, which was settled by 22 percent of the new value of the car on to be added to the taxable annual salary: the so-called addition. Nice no, easy yes.

The then State Secretary Jan Kees de Jager saw this as a useful instrument to give the Dutch vehicle fleet a push in the greener direction. Instead of a 22 percent addition for all cars, a rate of 14 percent for the most fuel-efficient cars was introduced in 2008. That ‘economical’ was defined as a maximum of 110 g/km of CO2 for petrol, while diesels were allowed to emit a maximum of 95 g/km to qualify for that 14 percent. For everything above that, the addition went up to 25 percent. This concerned the vast majority of models, because only the Citroën C1, Toyota Aygo, Peugeot 107, Smart ForTwo MicroHybrid and CDI, Daihatsu Cuore, Toyota Prius and Honda Civic Hybrid met the standard. A year later, in 2009, an addition benefit of a 10-percent rate for fully electric cars was announced, but before this could be introduced in 2010, the House of Representatives made it 0 percent.

Because a car in the A-segment is not sufficient for everyone, in 2008 the only two mid-sized cars that (thanks to hybrid drive) are eligible for 14 percent, the Toyota Prius and Honda Civic Hybrid, suddenly become the standard sausages in the business segment. In 2009, the Prius even has a market share of 2.14 percent, while the Civic Hybrid it to 1.65 percent. In 2009 this duo will be joined by the Honda Insight. However, the most famous cars that benefited were the economical diesels that came on the market from 2010: the Volkswagen Polo BlueMotion, Seat Ibiza Ecomotive and in 2012 the Renault Mégane dCi and Ford Focus Econetic. From summer 2011, models up to and including 50 g/km were good for 0 percent addition. A striking step, in which plug-in hybrids received a lot of advantage. The Opel Ampera and twin brother Chevrolet Volt benefited, but the biggest winners were the Mitsubishi Outlander PHEV and the Volvo V60 D6 Hybrid. From 51 grams up to and including 95 grams (diesel), 14 percent applied; petrol cars up to 88 grams also enjoyed that percentage. For 20 percent, the standards were 89 to 112 grams for petrol and 96 to 124 grams for diesel. The tax authorities charged 25 percent additional tax on the rest.

Repetition of the drama

In 2014, cars up to 49 g/km went from 0 to 7 percent addition, which made that market almost seemed to collapse. But not completely. Volvo managed to squeeze the XC90 T8 from the original 64 to 49 g/km, so that the Dutch drove such a luxurious beast en masse with only 7 percent. It also led to skewed faces, such as with CDA MPs Omtzigt and Van Velvert who asked parliamentary questions about an impending hole in the budget, roughly the size of an XC90. They feared a repeat of the drama at the end of 2013 with plug-in hybrids such as the Mitsubishi Outlander. State Secretary of Finance Eric Wiebes replied that at that time no type approval was available and that the environmental benefit of the lost tax revenue was ‘not easy to qualify’. Other models that were subject to the 7 percent regulation at that time, such as the BMW i8, Audi A3 e-tron and Mercedes-Benz C350e, were also given the full blow by Omtzigt and Van Velvert: “These are large cars that, when they 30-40 km range, often not so economical to drive.” At the request of the two MPs, Wiebes calculated that 11,766 new cars sold in the previous year 2014 were below 50 g/km, which had cost the treasury 38 million in addition to income loss compared to the full 25 percent and 15 million compared to 14 percent. . In 2013, this concerned 19,472 cars with losses of €89 million and €50 million respectively.

Many manufacturers squeezed their business diesel down to just below the Dutch addition limit, so that each time a different diesel was suddenly extremely popular. Peugeot handed out the 308 SW 1.6 BlueHDI as sandwiches in 2014 and 2015, because it was good for 14 percent addition. This made it the best-selling model of 2015.

Mitsubishi Outlander PHEV

The Mitsubishi Outlander PHEV is probably the first model you think of when it comes to additional tax benefit. A hefty SUV with permanent four-wheel drive that is already competitively priced and can also pull 1,500 kg and all that with 44 g/km CO2 emissions, so 0 percent addition? The sellers wrote themselves the blisters on their fingers. Already in January 2013, six months before the arrival to our country and without anyone here ever driving or even seeing him, there were already about 1,500 signed order forms. A month later there were 4,000 and in July 10,000 people were waiting for their addition blast. The reason for this boom was easy to guess: to be eligible for the full exemption from addition (which could yield an average of around €14,000 over a term of five years), you had to register your Outlander before January 1, 2014 be put. After all, from that date the addition would be 7 percent. Still good, but everyone went for the top prize of course.

They managed to win over 8,700 people, but the 7 percent also wanted more and the sale of the Outlander continued unabated in 2014 and 2015. The jackpot went to Mitsubishi. Until the arrival of the PHEV, this rearguard brand sold several thousand cars per year across the entire range, during the three PHEV years sales suddenly ranged between 12 and almost 15,000 units per year. Needless to say which model it was.

losers

In addition to main prize and jackpot winners, there was also a Big Loser in the Outlander case: Nedcar. The Limburg factory had been allowed to assemble the moderately successful Mitsubishi Outlander II for years, but this third generation, which would become such a hit with us, ran off the production line again in Japan. If things had turned out differently, the Sterrebos would have been cut down much earlier.

Another loser was the treasury. Because as fast as the lease drivers ran to the showrooms in the peak years of the Mitsubishi Outlander PHEV, the cars at the end of the lease contract went abroad again. Up to and including 2019 alone, almost 10,000 copies disappeared from our national roads, which, according to critics, had blown a huge amount of environmental subsidy across the border. This does not only apply to the Mitsubishi, by the way. Many former addition miracles go far away en masse at the end of the term on the trailer.

With the Model S, Tesla was pretty much lonely at the top of the EV world for years, and the Model X didn’t exactly push the threshold. But when the Tesla Model 3 came here, it was all over. This type was also virtually alone in the upper middle class for a while and could therefore not be dragged on. In its first full year of sales, 2019, almost 30,000 units were sold. When the more or less monopoly position has crumbled in recent years due to the arrival of competitors from old-school brands such as Audi and Mercedes-Benz, sales of the Tesla Model 3 also plummeted, which does not alter the fact that it is still doing very well.

Too beautiful

In early 2018, Jaguar announced its highly anticipated I-Pace. Leasend Nederland was bouncing like a child on December 4. A company Jaguar with only 4 percent addition, it almost sounded too good to be true. To avoid disappointment, Jaguar increased the production rate especially for the Netherlands, even before the car was in the showrooms. At that time, Jaguar Netherlands already had about 2,000 orders in its portfolio, exactly the production that the factory had calculated for our country. The production increase could bring that number to 3,500 units for 2018. That wasn’t just to reassure the impatient customers. Because even if the addition for fully electric cars would remain 4 percent the following year, that percentage was now limited to the first €50,000 of the list price. You paid the normal rate of 22 percent on everything above that.

In the meantime, tax-free driving is a thing of the past and a discount (16 percent addition) is only available for fully electric cars up to €35,000. This applies until 2024. In 2025, the addition for EVs must be increased to 17 percent, to be equalized to 22 percent in 2026.