State plans to cover €4,500 of electric car purchase in Latvia

The country plans to subsidize the purchase of new electric vehicles for residents at up to €4,500. If the old car it replaces is scrapped, the subsidy will increase by a further €1,000, the Ministry of Environment and Regional Development (VARAM) said in an information report August 17.

The Ministry's offer foresees that the State will cover €4,500 from the price of a new electric car, while the subsidy for second-hand electric or new hybrid vehicles (plug-in) will be €2,250. A further €1,000 will be available if the resident scraps the old car and hands it over to the processing company.

There are a number of conditions, such as the price of a car cannot exceed EUR 50,000 without value-added tax (VAT), and the buyer will not be allowed to sell the car for four years.

There are also minimum mileage requirements: the new electric vehicle must be driven at least 15,000 kilometres per year, approximately 40 kilometres per day, or 80,000 kilometres over four years. If less is driven, some state aid will have to be returned.

The state will transfer the subsidy to the car seller, not the buyer. It is intended to allocate EUR 10 million for a period of two years.

The Minister for Environmental Protection and Regional Development, Arturs Toms Plešs, said that the main benefits of such aid would be to kick-start the mobility and replacement of electric transport.

“It is clear that we will not replace all cars, but we will give a positive boost to the market and an incentive for municipalities to plan electric car charging sites,” the minister said.

The Bank of Latvia's spokesman, Edvards Kušners, said at the government meeting that he would like to see a more strategic approach - the calculation of the reduction of emissions planned in the programme and whether this is the most effective way to achieve the reduction of emissions. He said that the strategy of climate neutrality was based on expectations, without financial calculation. If we invest from the State budget, as we are not the richest country, calculations would be important, said the representative of the Bank of Latvia.

He said there are also problems with charging infrastructure. In urban areas, the use of more public transport is far more efficient from the point of view of emissions than their redeployment to an electric vehicle.

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