Support for electric cars: half a turn in the right direction

Since 2016, the Hungarian government has spent nearly 10 billion taxpayer Forints on supporting electric vehicle manufacturers. Unfortunately, the administrators of these subsidies missed a key element: they did not dedicate any funds to the replacement of the internal combustion engine vehicles with the highest-mileage.

The Clean Air Action Group (CAAG) has repeatedly called for the development of more effective assistance options. As such, CAAG welcomed the declaration of László Palkovics, the Minister of Innovation and Technology that the government was working on reforming the subsidies to improve their efficiency. In a letter to the minister, CAAG outlined its advised course of action, arguing that taxpayer money would have been and would still be best spent on investing in creating the market environment that most effectively supports the manufacturing and use of electric vehicles. 

The government’s plan to support the replacement of taxis and postal vehicles with electric (it is to be hoped that not hybrid) vehicles is also highly welcomed. It would be advisable to also support the replacement of high-mileage government vehicles, allowing the government to lead by example!

It is also necessary to encourage the use of electric car-sharing services. This primarily requires awareness-raising activities and the development of free dedicated parking spaces, which the State can promote through legislation and financial support. (The use of car-sharing services in Budapest, for instance, was greatly facilitated by the allowance of free parking, yet at the same time one of the biggest obstacles to their continued development is the lack of parking spaces designated for shared cars.)

The CAAG also recommends that, as a first step, the government should support the development of an electric charging station network suitable for all these vehicles and the development (or purchase) of a more modern payment system.

The air in cities is also polluted by the many food delivery service scooters employed by restaurants. If restaurants received an interest-free loan of half to one million Forints per scooter to replace them with electric scooters (rather than the 1.5 million Forint subsidy provided for the purchase of an electric car), or had the opportunity to rent electric scooters from a metropolitan fleet – combined with a ban on combustion engine scooters in the city – the air quality in Budapest would improve substantially. The positive impacts of such measures would far outweigh those of electric car subsidies. 

“Undoubtedly, those who have received the 1.5 million Forint grants have benefitted from them, but the fact that several hundred more electric cars drive on our roads has not made the air in Hungarian cities any cleaner. Subsidising the private purchase of electric cars by individuals is a very inefficient use of public money, therefore we recommend the reallocation of these sums’ — said Martin Vargha, CAAG’s transport policy officer. 

Translated by Iarina Ciceu