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Austria Bases Vehicle Tax Laws on CO2 Emissions, Tesla and Other EVs Will be Charged €0 Per Year

by Claribelle Deveza December 03, 2019

Austria Bases Vehicle Tax Laws on CO2 Emissions, Tesla and Other EVs Will be Charged €0 Per Year

Austria has introduced tax reforms to enforce low CO2 emission vehicles in the country. The local government has introduced changes to its NoVA tax and motor-related insurance tax. The changes will significantly affect ICE vehicles, but does not affect all-electric cars like Tesla’s Models S,3, and X. 

Tesla Model 3 owner @raffaeru shared news via Twitter of Austria’s move to lower its CO2 emissions through new tax laws. He tweeted about engine-related insurance taxes in the country and shared an article from Finanz.at about the government’s changes to its NoVA calculations. 

The NoVA is Austria’s fuel consumption/pollution tax, which is added to the net purchase price or commercial leasing fee when people register their passenger cars and motorcycles for the first time. The tax does not apply to all-electric vehicles—like Tesla’s Model S, 3, or X—and electrohydraulic cars. Vehicles used for school transportation, taxis, ambulances, diplomats, and persons with disabilities are exempt from the tax as well. 

The NoVA tax will be calculated using the Worldwide Harmonized Light Vehicles Test Procedure (WLTP) method for cars specifically—motorcycles will use the WMTC method. WLTP has become the standard method to measure a vehicle’s fuel consumption, emissions, and the range of EVs on the road in most EU countries, India, South Korea, and Japan. WLTP is supposedly the more precise way to measure these factors, thus, a more accurate method to base CO2 tax emissions on. 

“In future, the equation (CO2 in g/km – 115) / 5 will be used to calculate the tax rate as a percentage for the NoVA, whereby the maximum tax rate is 32%, and EUR 350 must be deducted as a fixed sum (so-called NoVA bonus). As of 1 January 2021, the value of 115g/km will be reduced by 3 grams every year. Purely electric vehicles remain exempted from the NoVA,” wrote ALD Automotive, when explaining the new NoVA tax. 

Austria has also changed its insurance tax based on engine size. Affective October 1, 2020, the motor-related insurance tax will be calculated based on the CO2 emissions of a vehicle, too. This could affect the sales of cars and motorcycles with low-CO2 emissions, which seems to be Austria’s goal. The only vehicles exempted from this tax are all-electric vehicles, stated ALD Automotive

In 2017, Austria’s greenhouse gas emissions increased by around 3.3 percent from the year before. According to umweltbundesamt.at, for the country to meet its environmental goals, it can only release 6.2 million tonnes of CO2 from 2017 to 2020. It is an ambitious goal that requires extensive measures to reduce fossil fuels. 

The Austrian government seems to have set the 2020 tax changes to meets its climate targets for 2020 and its ultimate goal for 2030. While the new NoVA and motor-related taxes are a step in the right direction, environmentalists in Austria believe that the new tax reforms are still insufficient. 

"The fact is that transport is further away from EU climate targets than any other sector. And Austria faces high levels of compensation in the long term if there is no reversal in climate change. The longer the necessary measures are delayed, the greater the damage to our country,” said Volker Hollenstein from WWF to Finanz.at. 




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