Spain's booming hybrid electric vehicle market: A summary of supporting policy measures - International Council ...

 
Spain's booming hybrid electric vehicle market: A summary of supporting policy measures - International Council ...
WORKING PAPER 2019-12

Spain’s booming hybrid electric
vehicle market: A summary of supporting
policy measures
Authors: Sandra Wappelhorst
Date: May 2019
Keywords: Hybrid electric vehicles; incentives; policy measures

Introduction                                 (PHEVs), but the electric power train is   2009. This development was mainly
                                             capable of moving the vehicle on its       driven by substantial tax exemptions:
Sales of hybrid electric vehicles            own, unlike in mild HEVs. Compared         From mid-2006 until 2010, purchasers
(HEVs) in the Spanish market have
                                             to a conventional gasoline and diesel      of HEVs received a one-time bonus on
seen a much faster uptake than in
                                             car, HEVs can reduce fuel consump-         registration, ranging between €2,500
most countries of the European Union
                                             tion and CO2 emissions by up to 35%        and €6,000 depending on the year.
(EU). Between 2017 and 2018, sales
                                             (German, 2015). In contrast to battery     Until 2014, owners of a gasoline HEV
of hybrid electric passenger cars
                                             electric vehicles (BEVs) and PHEVs,        emitting less than 110 g CO2/km also
increased by 36% to almost 75,800,
                                             another advantage is that HEVs do not      were exempt from paying the regular
one of the highest absolute sales num-
                                             rely on recharging infrastructure.         motor vehicle tax. In addition, in 2008,
bers recorded among the EU Member
                                                                                        a lower rate for taxing low-emission
States (European Automobile Manu-            Figure 1 compares the HEV market
                                                                                        company cars was introduced. For
facturers Association [ACEA], 2019a).        share in selected EU countries from
This paper provides an overview of                                                      example, the rate for a gasoline HEV
                                             2001 to 2018. The countries reflect
the development of the HEV market in                                                    emitting up to 95 g CO2/km was 14%
                                             those markets where absolute HEV
Spain. It quantifies the growth in HEV                                                  of the catalogue price compared to
                                             sales exceeded 20,000 in 2018.
sales across Spain and its regional                                                     25% for a conventional gasoline or
                                             Among those countries were France,
markets, and describes key policies at                                                  diesel car (Tax and Customs Admin-
                                             Germany, Italy, the Netherlands, Spain,
the national, regional, and local levels.                                               istration, n.d.; International Energy
                                             and the United Kingdom. As shown
                                                                                        Agency, n.d.).
HEVs represent a viable interim solu-        in Figure 1, Spain plays a major role
tion for the transition to a low-carbon      in growing the HEV market in the EU.       A combination of national, regional, and
transport system, helping to achieve         With almost 75,800 HEVs sold in 2018,      local policies distinguishes the Spanish
global greenhouse gas (GHG) and              Spain accounted for 13% of the HEV         market from other European markets.
local air pollution reduction targets.       sales in the EU, over 4 percentage         These include environmental car label-
At the same time, HEVs can help vehi-        points more than its almost 9% share       ing, incentive programs for purchasing
cle manufacturers reduce the aver-           of total passenger car sales. Sales of     low-emission vehicles, access to low-
age carbon dioxide (CO2) emissions           hybrid electric passenger cars have        emission zones (LEZs), and discounts
of their new car fleets to ensure com-       climbed steadily in Spain since 2001,      on parking and road tolls. The impact
pliance with regulations, such as the        with the exception of a slight drop        of these policies has been reinforced
EU CO2 target of 95 grams (g) of CO2         between 2012 and 2014, and have sig-       by the announcement and implemen-
per kilometer (km) for 2021 (Interna-        nificantly increased since 2014. By the    tation of bans for high-emission vehi-
tional Council on Clean Transportation,      end of 2018, HEV sales reached 5.7%.       cles in urban centers. All of these key
2019). From a technological perspec-         This share was surpassed only by Swe-      policies have helped to spur and shape
tive, HEVs are powered by an internal        den (5.8%), Lithuania (7.2%), and Fin-     the HEV market in Spain.
combustion engine running on gaso-           land (9.8%), however fewer vehicles in
line or diesel with one or more supple-      terms of absolute numbers were sold        The following sections describe the
mentary electric motors fed by energy        in these markets due to their smaller      development of the Spanish HEV
stored in batteries. The battery cannot      market size (ACEA, 2019a). In the          market, focusing on policies that
be recharged from the electricity grid,      Netherlands, similarly high HEV mar-       may be associated with their con-
unlike in plug-in hybrid electric vehicles   ket shares were recorded as early as       tinuous uptake.

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Spain's booming hybrid electric vehicle market: A summary of supporting policy measures - International Council ...
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

Market Development                                         6%                                                                                       Sweden (5.8%)
                                                                                                                                                    Spain (5.7%)

HEV sales in Spain increased from                          5%
                                                                                                                                                    Netherlands (4.6%)
0.7% in 2010 to 5.7% in 2018. Fol-                                                                                                                  Italy (4.3%)
lowing the diesel emissions scandal,                       4%
                                                                                                                                                    France (4.2%)

                                            Market share
                                                                                                                                                    European Union (3.8%)
Spain saw a major drop in new diesel                                                                                                                United Kingdom (3.4%)

registrations with a decrease of 21%                       3%                                                                                       Germany (2.9%)

between 2015 and 2018. This paved
the way for a corresponding increase                       2%
in sales of gasoline vehicles and HEVs
                                                           1%
by almost 18% and 3%, respectively
(Mock, 2018; ACEA 2019a, 2019b).                           0%
                                                             2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 2 and Figure 3 provide a
closer examination of HEV registra-          Figure 1. Market share of new hybrid electric passenger cars in selected EU countries
tion and market share by regional            up to the end of 2018 (Mock, 2018; ACEA, 2019a, 2019b).
markets in Spain, including the 17
autonomous communities and                                           Madrid 2018                                                                                +69%
                                                                                    2017
the two autonomous cities Ceuta
and Melilla. Figure 2 shows that in                               Catalonia                                       +6%

2018, the greatest number of HEVs
                                                                  Andalusia                            +29%
were registered in the community
of Madrid with almost 30,400 new
                                                                   Valencia                       +28%
HEVs sold. This was followed by the
communities of Catalonia (approx-                                                          +29%
                                                                      Galicia
imately 12,400), Andalusia (more
than 8,400), and Valencia (6,200).                                                         +33%
                                                      Castile and León
T h e g row t h ra te s f ro m 2 0 1 7 to
2018 show wide variations, ranging                         Basque Country                  +16%
between -1% (Ceuta and Melilla) to
+99% (Canary Islands). In fact, 12          Castilla-La Mancha                            +29%

out of the 19 autonomous communi-
                                                           Balearic Islands           +16%
ties saw HEV growth of more than
25% (Asociación Española de Fabri-
                                                            Canary Islands            +99%
cantes de Automóviles y Camiones
[ANFAC], 2018, 2019a).                                                                +27%
                                                                      Murcia
In terms of market share, three Span-
                                                                     Aragon           +8%
ish communities registered the high-
est HEV shares in 2018 (see Figure 3).                                               +26%
                                                                    Asturias
In Catalonia, La Rioja, and Ceuta and
Melilla the share was more than 5%.                                                  +26%
                                                             Extremadura
Despite accounting for the highest
relative shares of new HEV registra-                              Cantabria          +28%
tions in 2018, the autonomous com-
munity La Rioja and the autonomous                                  Navarre          +31%
cities Ceuta and Melilla recorded
the lowest number of HEV sales in                                   La Rioja        +18%

absolute numbers—about 420 and
                                                                                    -1%
135 respectively—because of the                    Ceuta and Melilla
relatively small size of the market.
                                                                                0         4,000 8,000 12,000 16,000 20,000 24,000 28,000 32,000
On the contrary, Catalonia had the
                                                                                                          Registrations (absolute)
highest HEV share and at the same
time the second highest number of           Figure 2. New HEV registration in the Spanish autonomous communities/cities from
total HEV registrations with 12,400         2017 to 2018, including hybrid electric quadricycles, commercial and industrial vehicles,
(ANFAC, 2019a).                             and buses (ANFAC, 2018, 2019a).

2   INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION                                                                                         WORKING PAPER 2019-12
Spain's booming hybrid electric vehicle market: A summary of supporting policy measures - International Council ...
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

The number of vehicles sold is also                     Autonomous
closely linked to the availability of dif-              communities                                      Asturias
                                                                                                                           Cantabria         Basque
                                                        of Spain                                                                             Country
ferent models on the market (Slowik                                                          Galicia
                                                                                                                                                        Navarre
& Lutsey, 2018). Figure 4 shows the                                                                                                          La Rioja
total number of HEV registrations in                 Share of hybrid                                                Castile and León                                                   Catalonia
relation to HEV models available in                  electric vehicles
                                                                                                                                                                  Aragon
                                                     in 2018
Spain, plotted for the 2001 to 2017
time frame (Mock, 2018). The figure                                     < 3.0%

illustrates that between 2001 and                                       3.0 - 3.9%                                              Madrid

2011, both the number of HEV regis-                                     4.0 - 4.9%
trations and the availability of HEV                                    > 5.0%                         Extremadura                     Castilla-                            Valencia
                                                                                                                                       La Mancha
models continously inceased. Despite                                                                                                                                                        Balearic Islands

an increasing number of HEV models
available on the Spanish market, HEV                                                                                                                      Murcia
registrations stagnated between 2011                                                                                    Andalusia
and 2013. Starting in 2014, HEV regis-
trations went up significantly whereas
model availability dropped in 2016.                                         Canary Islands

The development since 2011 indicates                                                                                    Ceuta
                                                                                                                                                                                                    150 km
                                                                                                                                              Melilla
that other aspects in addition to                                                                                                                                                                   100 mi
model availability seem to influence
consumers’ purchase decisions.                 Figure 3. Share of newly registered HEVs by Spain’s autonomous communities in 2018,
                                               includings hybrid electric quadricycles, commercial and industrial vehicles, and buses
Next to the increasing offer of HEV            (ANFAC, 2019a).
models, the development of the HEV
market in Spain as described above is                                   60,000
based also on a comprehensive mix                                       55,000
of policy measures at the national,                                     50,000                                                                                                                     29
                                             Registrations (absolute)

                                                                                                                                                                                           28

regional, and local levels. The follow-                                 45,000                                                                                                   26
                                                                                                                                                                           24
ing sections describe in more detail                                    40,000                                                                                                                           23    23

the underlying factors that may have                                    35,000
contributed to spurring the HEV mar-                                    30,000
                                                                                                                                                                  16
                                                                        25,000
ket in Spain.
                                                                        20,000                                                                           12
                                                                                  Availability of HEV
                                                                         15,000 models in Spain
Policy Background                                                       10,000                                              5          5
                                                                                                                                              7

                                                                                                                    4                                                                      Registrations of
According to the Effort Sharing                                           5,000                       3
                                                                                                                                                                                           HEVs in Spain
                                                                                1   1      1     1
Regulation, which requires each                                               0
                                                                                 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011                                2012 2013 2014 2015 2016 2017
Member State to reduce GHG emis-
sions, Spain must reduce national              Figure 4. Sales of HEVs in relation to HEV models available in Spain, from 2001 to 2017
GHG emissions by 26% by 2030 com-              (Mock, 2018). Due to a lack of robust data on HEV model availability in Spain, we consider
pared to 2005 levels (European Com-            the number of different HEV models customers bought. We assume that if a HEV is for
mission [EC], 2018). However, at the           sale on the market, it will likely be purchased at least a certain number of times.
national level, the Spanish govern-
                                               of nitrogen oxides (NO x ) shall be                                                         measure specifically aiming at the
ment has not set a binding CO2 reduc-
                                               reduced by 41% compared to 2005                                                             uptake of HEVs in taxi fleets through
tion target for the transport sector.
                                               levels in 2020, and by 62% as of 2030                                                       incentive programs (City Council of
Despite this lack, there are various
                                               (Government of Spain, 2017).                                                                Madrid, 2017). The strategy calls for
programs and strategies defining
local, regional, and national policies                                                                                                     grants for the acquisition of clean
                                               Policies for the uptake of HEVs can                                                         vehicles or the renewal of munici-
to reduce GHG emissions from trans-
                                               be found mostly at the regional or                                                          pal fleets including HEVs. The Plan
port, such as the Climate Change and
Clean Energy Strategy 2007–2012–               local level, such as part of local mobil-                                                   for Energy, Climate Change and Air
2020 (Government of Spain, 2007a).             ity strategies. For example, the Air                                                        Quality of Barcelona 2011-2020 also
Meanwhile, the National Plan for Air           Quality and Climate Change Plan                                                             encourages new technologies, specif-
Quality 2017–2019 defines reduction            (short Plan A) of the city of Madrid,                                                       ically the increased incorporation of
targets for specific pollutant emis-           approved by the City Council in                                                             HEVs in municipal fleets (City Council
sions, for example that emissions              September 2017, includes a policy                                                           of Barcelona, 2011).

WORKING PAPER 2019-12                                                                                         INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION                                                   3
Spain's booming hybrid electric vehicle market: A summary of supporting policy measures - International Council ...
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

Environmental                               Table 1. Classification for passenger cars and light commercial vehicles in Spain
                                            (Ministry of Interior, 2016).
Car Labeling
                                              Classification        Badge                             Eligible cars
An important measure spurring
                                                                                  • Battery electric vehicles (BEVs)
alternative fuel vehicle adoption
                                                                                  • Range extended electric vehicles (REEVs)
and improving air quality in cities         Zero-emission
                                            label                                 • Plug-in hybrid electric vehicles (PHEVs) with
and regions in the Spanish market is
                                                                                    minimum range autonomy of 40 km
environmental car labeling. In April
                                                                                  • Fuel cell vehicles (FCVs)
2015, the Spanish traffic authorities
                                                                                  • Plug-in hybrid electric vehicles (PHEVs) with
(DGT) published a guideline for label-                                              a range autonomy less than 40 km
ing zero-emission vehicles. This was
                                            ECO label                             • Hybrid electric vehicles (HEVs)
followed in April 2016 by a directive
                                                                                  • Liquified petroleum gas vehicles (LPGs)
classifying vehicles in four catego-
                                                                                  • Compressed natural gas vehicles (CNGs)
ries according to their level of pollu-
tion (see Table 1) (Ministry of Interior,
General Directorate of Traffic, 2015).                                            • Gasoline Euro 4, 5 and 6
                                            C label
According to this directive, HEVs are                                             • Diesel Euro 6
classified under the ECO label. The
four different categories of the envi-
ronmental car labeling are applied
to determine, for example, local and                                              • Gasoline Euro 3
                                            B label
regional subsidy amounts for the pur-                                             • Diesel Euro 4 and 5
chase of a new vehicle or to regulate
access to LEZs such as in Madrid or
                                                                                  • Gasoline cars produced before 2000
Barcelona (see following sections).         A label               No badge
                                                                                  • Diesel cars produced before 2006
The labels are stickers that gener-
ally can be voluntarily displayed on
the windshield. In Madrid, since April      vehicle including HEVs. These ben-            to individuals, freelancers, and small-
2019, the labels have been manda-           efits were granted in the framework           and medium-sized businesses (Gov-
tory for owners of all motor vehicles       of the Renove Plan (1994–1996) and            ernment of Spain, 2008a, 2008b).
that access, circulate, or park in the      PREVER Program (1997–2007) (Gov-
municipality of Madrid (City Council        ernment of Spain, 1994, 1997).                Between 2009 and 2010, the Plan
of Madrid, 2018a).                                                                        2000 E provided grants for the pur-
                                            In November 2008, the Spanish gov-            chase of new passenger cars and
                                            ernment announced a new aid pro-              commercial vehicles as well as used
Incentives and                              gram under the name VIVE Plan                 vehicles up to 5 years old. Purchas-
Other Benefits                              (Innovative Vehicle-Ecological Vehi-          ers of a passenger car emitting up to
                                            cle). The 2-year program aimed at             149 g CO2/km, including HEVs, could
In the past, the Spanish central,
                                            replacing vehicles older than 10 or           receive a minimum one-time bonus
regional, and local governments have
                                            15 years in favor of a new or second-         of €1,500, the cost of which was split
introduced a variety of programs to
                                            hand passenger car with a maximum             between the national government
promote the purchase of alternative
                                            age of 5 years. Special financing con-        (€500) and the car manufacturers
fuel vehicles (AFVs), including natu-
                                            ditions were offered to purchasers            or importers (€1,000) (Ministry of
ral gas-powered vehicles using liqui-
                                            of passenger cars rated up to 140 g           Industry, Tourism and Trade, 2009).
fied petroleum gas (LPG) and com-
                                            CO 2/km. This benefit included that           In addition, autonomous communi-
pressed natural gas (CNG), HEVs, and
                                            the first €10,000 of the amount of            ties could supplement that amount
electric vehicles—BEVs, PHEVs, range
                                            the vehicle’s purchase price could            with additional funding. For example,
extended electric vehicles (REEVs),
                                            be financed without cost, which is to         Aragon, Asturias, Cantabria, and Mur-
and fuel cell electric vehicles (FCEVs).
                                            say with an interest rate of 0%. For          cia provided additional funding. In
                                            example, the purchaser of a vehicle           contrast, Madrid and La Rioja did not
INCENTIVES AND BENEFITS AT                  with a purchase price of €20,000              contribute to the plan, rather incen-
NATIONAL/REGIONAL LEVEL                     would have paid a monthly fee of €63          tivizing the acquisition of low-emis-
Between 1994 and 2007, the Span-            instead of €125, assuming an inter-           sion vehicles by providing exemp-
ish government provided benefits on         est rate of 7.5%. The maximum pur-            tions on registration tax. In the case
registration tax for the replacement        chase price was capped at €30,000.            of Galicia, the decision was in favor of
of an older vehicle in favor of any new     Eligibilty for the grants was limited         its own regional funding program for

4   INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION                                                              WORKING PAPER 2019-12
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

passenger cars including HEVs. Grant            a national one-time subsidy of               providing grants for scapping an
eligibilty extended to individuals as           €1,000, whereas those in the mar-            old car in favor of a low-emission
well as micro-, small-, and medium-             ket for a vehicle equal to or heavier        vehicle including HEVs. The latest
sized businesses (“Plan 2000 E,”                than 2,500 kg were eligible to               program, TAXIFREE 2018, pro-
2009).                                          receive €2,000. The program was              vided grants for HEVs of €1,000
                                                divided into four phases. The first          for taxis or €3,000 for eurotaxis
In 2012, the Spanish government set             phase (PIMA Aire 1) started in Feb-          adapted for people with reduced
up two further national scrapping               ruary 2013 with the last one (PIMA           mobility that were registered
schemes to promote the substitu-                Aire 4) commencing in November               between June 2017 and July
tion of old vehicles including financial        2014 (Associació Empresarial de              2018, but only for those running
assistance for the purchase of HEVs:            Tallers de Reparacio i Venedors              on gasoline fuel (City Council of
                                                d’Automoció [ASTAVE] 2014, 2015;             Madrid, 2016, 2018b, 2018c).
• One program entitled PIVE (Effi-
                                                Plan PIMA-Aire, n.d.).
  cient Vehicle Incentive Program)
                                                                                        2.   At a regional level, the autono-
  included eight separate cam-             Between 2009 and 2017, additional                 mous community of the offers
  paigns, the first one (PIVE 1)           national programs provided incen-                 two plans that do include grants
  started in October 2012 and the          tives in the form of one-time bonus               for HEVs—the PIAM Plan (Auto-
  last program (PIVE 8) began in           payments for the acquisition or lease             taxi Incentive Plan) and the PIV-
  May 2015. The program aimed at           of low-emission vehicles. These pro-              CEM Plan (Incentive Plan for light
  incentivizing the scrappage of pas-      grams—Plan MOVELE, Plan MOVEA,                    commercial, efficient, auxiliary
  senger cars over 12 years old and        and Plan MOVALT—included a total                  and service vehicles). The PIAM
  light commercial vehicles more           of 10 separate rounds of funding. Eli-            Plan, first launched in November
  than 10 years old, then replacing        gible vehicles for a grant included               2013, initially provided €2,000
  them with any new vehicle, includ-       A F Vs , h oweve r H E Vs we r e n o t            for licensed taxi services replac-
  ing AFVs and conventional gaso-          included in these programs (Gov-                  ing a vehicle with a new HEV. In
  line and diesel vehicles. Under this     ernment of Spain, 2011; Ministry of               2018, the grant aid was €3,000
  scheme, buyers of a HEV origi-           the Presidency, 2015; Ministry of the             for vehicles eligible for an ECO
  nally received a one-time bonus          Presidency and for territorial admin-             label, including HEVs (Commu-
  of at least €2,000—a €1,000 sub-         istrations, 2017; Plan MOVALT Vehícu-             nity of Madrid 2013, 2018). In
  sidy funded by the national gov-         los, n.d.). A new scrapping scheme                2014, the autonomous commu-
  ernment plus a minimum discount          (MOVES Plan) was approved in mid-                 nity of Madrid also launched a
  of €1,000 provided by the manu-          February 2019, granting aid for the               plan for the renewal of light com-
  facturer/importer at the point of        purchase of electric vehicles. Like the           mercial vehicles aiming at small-
  sale. For the seventh phase of the       previously mentioned programs, pur-               and medium-sized companies
  scheme (PIVE 7), the minimum             chasers of a HEV do not benefit from              and self-employed workers (PIV-
  total incentive was reduced to           a one-time bonus payment granted                  CEM Plan). In 2018, purchasers
  €1,500, again split equally between      by the national government (Govern-               of a light commercial vehicle eli-
  government and the manufactur-           ment of Spain, 2019).                             gible for an ECO label including
  ers. During the PIVE program term
                                                                                             HEVs received a one-time pay-
  between October 2012 and July            INCENTIVES AND BENEFITS                           ment of €3,000 (Community of
  2016, more than 15,700 purchasers        AT THE REGIONAL AND                               Madrid 2014, 2018).
  of HEVs—which is to say almost           LOCAL LEVELS
  every fourth purchaser received                                                       3.   In the autonomous community
  approval for grants. (“Beneficiarios     Some regional and local authori-
                                                                                             of Catalonia, taxi services, vehi-
  ayudas,” n.d.).                          ties in Spain also provide financial
                                           assistance for the acquisition of new             cles for commercial use, and
• The second scrapping program,            low-emission vehicles. Four specific              other service vehicles that oper-
  called PIMA Aire (Plan for Promo-        examples are:                                     ate in the region’s special areas
  tion of the Environment), aimed                                                            of atmospheric protection also
  to replace commercial vehicles at        1.    The city of Madrid grants help              receive a one-time grant on car
  least 7 years old with new vehicles            for the renewal of the local vehi-          purchase. In 2018, buyers of a
  up to 1 year old. Buyers of commer-            cle fleet in different programs.            gasoline HEV with emissions of
  cial AFVs, including HEVs weigh-               Over the years, the city has for            up to 60 milligrams (mg) NO x/
  ing less than 2,500 kg, received               example targeted the taxi sector,           km, and which fulfills the Euro 6

WORKING PAPER 2019-12                                                     INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION     5
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

      emissions limit1 or higher, quali-            variant, or €17,150 for the hybrid elec-      3.   Castile and León was the first
      fied for a subsidy of €1,000 per              tric variant. Only in the city of Madrid           autonomous region in Spain to
      car. The regulatory base for sub-             and the autonomous community of                    implement an aid program for the
      sidies for the promotion of the               Castilla-La Mancha would the €3,000                acquisition of AFVs. In Decem-
      acquisition of low-emission vehi-             bonus make the purchase cost of a                  ber 2001, it was ratified that com-
      cles was first approved by the                hybrid electric car similar to the com-            panies, self-employed persons,
      regional government of Catalonia              parable gasoline Toyota Yaris model.               individuals, associations, and
      in October 2014 (Government of                In the Basque Country and Catalo-                  nonprofit organizations as well
      Catalonia, 2016, 2018).                       nia, the hybrid variant would still cost           as local entities could receive
                                                    €450 or €1,700 more, respectively.                 a grant for the acquisition of a
4.    The government of the autono-                                                                    HEV up to a maximum amount
      mous community Castilla-La                    In the past, other Spanish regions                 of €4,800 (Board of Castile and
      Mancha also offers funding for                offered one-time bonus payments                    León, 2001).
      the acquisition of alternative fuel           for the purchase of a HEV. These
      vehicles including HEVs, targeted             included the following examples,              4.   The autonomous region of
      at companies, individuals, and                which also represent only a sample                 Extremadura set the regulatory
      local entities alike. The one-time            of autonomous communities and rel-                 base for purchase incentives
      bonus amount for the purchase                 evant actions:                                     including HEVs in April 2009. The
      of a HEV in this case is €3,000 for                                                              grant amount was 15% of the vehi-
                                                    1.   In 2008, the Valencian Energy                 cle’s price including VAT, with a
      applications submitted between
                                                         Agency announced a program                    maximum aid of €2,300 for HEVs.
      August 2018 and May 2019. The
                                                         to incentivize the acquisition of             Eligible persons included individu-
      regulatory base for the subsi-
                                                         energy efficient vehicles. Under              als or micro-, small-, and medium-
      dies was established in early 2016
                                                         the program CO2TXE 2008 pur-                  sized businesses. Between 2009
      (Castilla-La Mancha, 2018; Min-
                                                         chasers of a HEV received a                   and 2012, about 120 purchasers
      istry of Economy, Business and
                                                         maximum bonus of €2,000. Eli-                 of HEVs received incentives in
      Employment, 2017).
                                                         gible for a grant were legal enti-            the autonomous community of
5.    In February 2019, the Basque                       ties or natural persons whether               Extremadura (Board of Extremad-
      government announced a new                         they were private or public. The              ura, 2012; “Las ayudas para la
      aid plan for the renewal of the                    program was relaunched on a                   compra,” 2012).
      regional vehicle fleet. Scrapping                  yearly basis between 2009 and
      a car at least 10 years old in favor               2011, with HEVs receiving a maxi-        In addition to national, regional, and
      of a HEV will be financially sup-                  mum bonus of €2,300 (Valencian           local incentives in the form of one-time
      ported with a one-time grant                       Community, 2008, 2009).                  bonus payments on car purchases,
      amount of €2,250. The maximum                                                               some regional and local authorities
                                                    2.   Andalusia incentivized the pur-          in Spain provide additional incentives
      price for a new HEV is capped at
                                                         chase of a HEV starting in August        for drivers of low-emission vehicles,
      €25,000. Individuals, companies,
                                                         2005. Initially, 50% of the price dif-   further reducing the cost of own-
      and municipalities are eligible for
                                                         ference between a conventional           ing a low-emission car compared to
      these grants (Basque Govern-
                                                         vehicle and a hybrid car was cov-        conventional gasoline or diesel cars.
      ment, 2019).
                                                         ered by the Andalusian Energy            For example, the government of the
These local and regional incentive pro-                  Agency, with a maximum one-              autonomous community of Catalonia
grams, of which only a selected sam-                     time bonus of €3,000. Compa-             offers discounts on motorway tolls for
ple have been mentioned, reduce the                      nies, administrations, and individu-     low-emission vehicles including HEVs.
costs of new vehicle acquisition. As an                  als all benefited from the bonuses.      Drivers of HEVs that meet Euro 6 or
example, the Toyota Yaris, available as                  Between 2008 and 2010, almost            higher are granted a 30% discount
a gasoline as well as a hybrid electric                  1,700 HEVs were subsidized by            on the regular road toll, reducing the
variant on the Spanish market, has a                     the Andalusian Energy Agency,            costs for using road infrastructure
sales price of €14,450 including value                   the majority in the city of Seville      (Department of Territory and Sustain-
added tax (VAT), for the gasoline                        (about 580) and Malaga and Cádiz         ability, n.d.).
                                                         (about 280 and 250, respectively).
1    Euro Emission Limits define limit values            About 340 subsidies across Anda-         The city of Madrid also offers dis-
     for exhaust emissions of new passenger              lusia were requested by the taxi         counts on parking that apply specifi-
     cars and light commercial vehicles sold in          sector within these two years            cally to drivers of HEVs. In mid-2014,
     Europe. Emission limits range from Euro 1 to
     Euro 6, with Euro 6 differentiating between         (Bolaños, 2006; “Unos 1.700 anda-        the city introduced a regulated car
     Euro 6a, 6b, 6c, and 6d.                            luces,” 2019).                           parking scheme in certain areas of

6    INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION                                                                 WORKING PAPER 2019-12
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

the city aimed at making better use       €4,500
of public space, easing parking con-                                                                               Spanish mainland
                                          €4,000                                                                   and Balearic Islands
gestion, and reducing the number of                                                                                Canary Islands
                                          €3,500
high-emission vehicles entering these
                                          €3,000
zones. The parking fees are com-
posed of a base rate with discounts       €2,500
or surcharges dependent on a vehi-        €2,000                            Volkswagen
                                                                              Tiguan
cle’s emission level. If driving a HEV,   €1,500
the base parking rate is reduced by       €1,000                         Toyota
                                                                          Prius
50% (City Council of Madrid, 2018d).       €500                          hybrid

                                              €0                                                                   Ceuta and Melilla
Tax Incentives                                   0   20   40   60   80   100 120 140 160 180 200 220 240 260 280 300

                                                                         CO2 emissions (g/km)
and Benefits
                                          Figure 5. One-time registration tax in the autonomous communities/cities of Spain
Both buyers and owners of HEVs            for 2019 based on a car with a sales price of €26,000 (average sales price of a newly
in Spain also benefit from certain        registered car in Spain in 2017) (ACEA, 2018).
tax exemptions.
                                          5 illustrates the registration tax appli-          of Spain, 2004). The length of time
TAXES ON CAR PURCHASE                     cable to the autonomous commu-                     that the reduction rate applies var-
                                          nities on the Spanish mainland, the                ies widely. For example, in the city
Purchasers of a new car in Spain pay
                                          Balearic Islands, the Canary Islands,              of Madrid, the benefit is 75% during
21% VAT on car purchases, although
                                          and the cities of Ceuta and Melilla for            the first six years after registration.
there is an exemption for the Canary
                                          a car purchase price of €26,000, the               In the city of Seville, the same reduc-
Islands. In March 2019, the Parlia-
                                          average price of a new vehicle regis-              tion applies but only for the first four
ment of the Canary Islands approved
                                          tered in Spain in 2017 (Mock, 2018).               years, whereas cities such as Barce-
the proposal of a law that eliminates
                                          For example, the purchaser of a Toy-               lona grant a 75% reduction for HEVs
the 7% General Indirect Canary Tax
                                          ota Prius hybrid in this price segment,            (gasoline hybrid up to 120 g CO2/km)
(IGIC) on goods and services (similar
                                          emitting 112 g CO2/km (according to                without a time limitation. In contrast,
to VAT) for alternative fuel vehicles
                                          the New European Driving Cycle, or                 the city of Valencia does not provide
including HEVs with emissions up
                                          NEDC) would not have to pay reg-                   reductions on ownership tax for HEVs
to 110 g CO2/km, reducing the initial
                                          istration tax across Spain. In con-                (City Council of Madrid 2018e, 2018f;
vehicle costs (ANFAC, 2019b).
                                          trast, the registration tax would be               City Council of Sevilla, 2018; Munici-
Buyers of a new car in Spain pay a        about €1,000 or €1,250 for a vehicle               pal Tax Institute of Barcelona, 2018;
one-time registration tax to the          equivalent in price but with emissions             City Council of Valencia, n.d.).
National Tax Agency when register-        between 121 and 159 g CO2/km (e.g.,
                                                                                             Figure 6 illustrates the ownership tax
ing a vehicle for the first time. The     the Volkswagen Tiguan, emitting 128
                                                                                             to be paid in the two largest Spanish
tax is based on a vehicle’s CO2 emis-     g CO2/km according to NEDC).
                                                                                             cities in terms of population, Madrid
sions and is divided into four bands.                                                        (for the first six years of ownership)
Each tax band defines a certain per-      TAXES FOR OWNING A VEHICLE
                                                                                             and Barcelona. In Madrid, yearly rates
centage applied to the sales price.       In addition to tax exemptions on                   for conventional gasoline and diesel
Since January 2008, registration tax      registration of cars emitting up to                passenger cars range between €20
is based on CO2 emissions. Vehicles       120 g CO 2/km, many municipalities                 and €224, and between €23 and €217
emitting up to 120 g CO 2 /km are         or regions in Spain offer reductions to            in Barcelona, whereas yearly rates for
exempt from the registration tax.         owners of a HEV on the annual own-                 eco-friendly vehicles are only €5 to
Above 120 g CO 2/km, the tax rates        ership tax. The rate payable depends               €56 in Madrid and €6 to €53 in Bar-
range from 4.75% to 14.75% for buy-       on the taxable horsepower of a car,                celona. For example, in Madrid the
ers on the Spanish mainland or the        the vehicle age, and the municipality              owner of a hybrid Toyota Yaris with a
Balearic Islands, whereas rates for       in which the car is registered. Gener-             taxable horsepower of 11.2 pays annu-
the Canary Islands are slightly lower.    ally, each city in Spain sets its own              ally just €15 for the first six years.
The cities of Ceuta and Melilla do not    rates. The reduction rate city councils            The owner of the same model in the
levy tax on new registrations (Gov-       can apply for HEVs can be as much as               gasoline version with the same tax-
ernment of Spain, Tax Agency, n.d.;       75%, based on a decree by the Span-                able horsepower would pay a higher
Government of Spain, 2007b). Figure       ish government in 2004 (Government                 yearly rate of €59.

WORKING PAPER 2019-12                                                            INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION        7
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

TAXES FOR CONSUMING FUEL                   €240                                                                             Madrid    Conventional
                                           €220                                                                                       gasoline and diesel
In general, fuel taxes in Spain are the    €200
                                                                                                                         Barcelona    vehicles
sum of three components: 21% VAT; a        €180
general state tax, which is 30.7 cents     €160
per Liter (ct/L) for diesel fuel and       €140
a higher rate of 40.1 ct/L for gaso-       €120
                                                                        Toyota
line fuel (unleaded 95 gasoline); and      €100                          Yaris
                                                                        gasoline
a special hydrocarbon state tax of          €80
                                                                                                                            Madrid    Eco-friendly,
7.2 ct/L (applied to both fuels). As        €60                                                                                       electric and hybrid
                                                                           Toyota
                                            €40                             Yaris                                        Barcelona    electric vehicles
a consequence of the lower general                                         hybrid
                                            €20
tax for diesel fuel, the taxation share
                                             €0
in the consumer end price for fuel is             1           5             10                  15          20         25           30
only 48% for diesel versus 55% for                                         Taxable horsepower (hp)
gasoline as of March 18, 2019 (Head
                                           Figure 6. Annual ownership taxes for car owners living in Madrid (first 6 years) and
of State, 2018; State Agency, 2018;
                                           Barcelona in 2019.
EC, 2019a).

Because HEVs can reduce fuel con-          €24,000
sumption by up to 35%, total costs                                                                                                 Fuel price (pre-tax)
                                           €22,000
(including taxes) are lower if compar-
                                                                            Taxes (€)
                                                                                                                                   Fuel price (tax)
ing a conventional diesel car with a       €20,000
                                                                                                                                   Ownership tax
diesel HEV, or a conventional gaso-
                                           €18,000
line car with a gasoline HEV, respec-                                                                                              Value added tax
tively. Although diesel HEVs benefit       €16,000
                                                                                                                                   Base price
from cost advantages on fuel costs         €14,000
compared to gasoline HEVs, because
                                           €12,000
of the lower fuel taxes, the effect of
this difference on purchase decisions      €10,000
is negligible due to a lack of diesel          €8,000
HEVs on the market.
                                            €6,000

COMPARISON OF TAXATION                      €4,000
LEVELS ON OWNERSHIP COSTS
                                               €2,000
The effects of different taxation levels
                                                  €0
on ownership costs from the perspec-                      Gasoline                         Diesel                 HEV
tive of a private consumer are illus-                   Toyota Yaris                     Ford Fiesta           Toyota Yaris
                                                         118 g CO2/km,                   109 g CO2 /km,        89 g CO2/km,
trated in Figure 7. For comparison, we
                                                        82 kw, 1,496 cm3                88 kw, 1,499 cm3      74 kw, 1,496 cm3
chose a Toyota Yaris, which is avail-
able as a gasoline and gasoline hybrid
                                           Figure 7. Four-year consumer ownership costs for a private car registered in the city
electric model on the Spanish market,
                                           of Madrid.
and a diesel car, the Ford Fiesta. We
have assumed a four-year ownership
                                           gasoline and diesel vehicle was multi-                          three vehicle models—including base
period and a 6% discount rate, in line
                                           plied by adaption factors of 1.5, 1.36,                         price and VAT (registration tax does
with similar studies (Wappelhorst,
                                           and 1.40, respectively (Riemersma &                             not apply because the selected vehi-
Mock, & Yang, 2018). We consider
                                           Mock, 2017; Plötz, Funcke, & Jochem,                            cles emit less than 121 g CO2/km)—the
the one-time costs on car purchase
                                           2017). Fuel prices as of February 25,                           hybrid electric Toyota Yaris turns out
(base price, VAT, registration tax),
                                           2019, were used, assuming an aver-                              to be more than €2,700 more expen-
annual cost of ownership (ownership
                                           age distance traveled per year of                               sive than the gasoline model, but
tax), and fuel costs, differentiated by
                                           13,000 km2 (ACEA, 2017; EC, 2019b).                             more than €3,100 cheaper than the
pre-tax and tax price. The quoted
CO 2 emission levels of the cars are                                                                       diesel Ford Fiesta. After the first four
                                           Considering these assumptions and
according to NEDC. To reflect vehicle                                                                      years of ownership, the Toyota Yaris
                                           comparing acquisition costs of the
real-world consumption for fuel cost                                                                       hybrid is the second-costliest option,
calculation, the NEDC fuel consump-        2    Official statistical data for Spain was not                at €20,900, resulting in a four-year
tion for the HEV and conventional               available, so the European average was used.               cost advantage of almost €2,800

8   INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION                                                                               WORKING PAPER 2019-12
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

toward the diesel and a cost disad-        Table 2. Reduction rates for low-emission vehicles when taxing the benefit in kind
vantage of approximately €1,900            (Government of Spain, 2015).
toward the gasoline car. Hence, this
                                                                                               Price limit
particular case provides an indica-
                                                           Type of vehicle                    before taxes         Reduction
tion that vehicle taxation for private
                                           Euro 6 < 120 g CO2/km                                €25,000               15%
households alone does not offer
enough benefits for consumers to opt       Hybrid electric vehicles, or powered by an
                                           internal combustion engine (ICE) that can            €35,000               20%
for a HEV.                                 use alternative fossil fuels (LPG, CNG)
                                           BEV, PHEV with a minimum electric drive
TAXES FOR THE PRIVATE USE                                                                       €40,000               30%
                                           range of 15 km, REEV
OF A COMPANY CAR
In addition to tax benefits for HEVs       uniting and extending these zones,           expanded until restrictions become
in private ownership, there are also       was introduced in November 2018              permanent in 2020 (City Council of
advantages for company car users.          with the aim of reducing both air pol-       Barcelona, 2018).
For example, employees in Spain pri-       lutant emissions and traffic noise, as
vately using a company car usually         well as increasing availability of pub-      RAISING AWARENESS
must declare the “benefit in kind” as      lic space in the central Madrid area.
                                                                                        Another important aspect of stimu-
income on their tax calculations. In       Full access to the Central Madrid
                                                                                        lating low-emission vehicle sales and
such cases, employees benefit from         LEZ is granted to residents, people
                                                                                        general uptake is informing people
reduced income tax rates on hybrid         with reduced mobility, safety and
                                                                                        and raising public awareness about
cars compared to a conventional            emergency services, and owners of
                                                                                        the benefits of electrified power
gasoline or diesel car. Generally,         vehicles with zero-emission or ECO
                                                                                        trains. A wide range of information
the yearly taxable benefit in kind is      labels, including HEVs. In contrast to
                                                                                        and awareness raising campaigns
20% of the vehicle’s purchase price        zero-emission vehicles, parking for
                                                                                        and channels have been deployed
including taxes. However, since July       vehicles with an ECO label is limited
                                                                                        at national, regional, and local levels
2015 tax reductions can be applied         to two hours. Owners of a vehicle
                                                                                        to promote HEVs including internet
to low-emission vehicles. In the case      with a B or C label (gasoline and die-
                                           sel cars) may enter the zone, but are        platforms, brochures, advertisements,
of HEVs, the reduction is 20% of the
                                           only permitted to park in car parks          personal or direct mail information.
benefit in kind capped at a purchase
price of €35,000 (see Table 2) (Gov-       and not on-street. Owners of a gaso-         The following paragraphs provide a
ernment of Spain, 2015). An example        line vehicle registered before 2000          selection of these measures.
of the benefit-in-kind calculation is as   or a diesel vehicle registered before
                                                                                        To support the national funding
follows: Assuming a purchase price of      2006 with no label are completely
                                                                                        allocations described earlier in this
€20,000 (base price plus VAT) and          banned from entering the LEZ (City
                                                                                        paper, the Spanish government has
the vehicle being used 220 days per        Council of Madrid, 2018g; 2018h).
                                                                                        set up an accompanying homepage
year for business and 145 days per
                                           Access for passenger cars to Barce-          that provides motorists with infor-
year for private purposes, the yearly
                                           lona’s LEZ, which includes most of           mation about alternative drive tech-
benefit in kind amounts to €20,000 *
                                           the city of Barcelona and parts of           nologies and helps publicize the
20% * (145 days / 365 days) = €1,589.
                                           the adjacent municipalities, is also         purchase-incentive programs them-
In the case of a HEV, this amount can
                                           restricted with the aim of combating         selves. Because the current program
be reduced by 20% to €1,271 for an
                                           the negative health effects of traffic       excludes HEVs from national fund-
annual tax reduction of €318.
                                           pollution. Starting in December 2017,        ing, the homepage does not include
                                           restrictions apply during episodes of        information about HEVs specifically
Urban Access                               elevated atmospheric pollution, in           (Government of Spain, 2018b). In
Regulations                                other words when suspended particu-          the past, when HEVs could receive
                                           late matter (PM10) or nitrogen dioxide       grants, information was provided
Some Spanish cities have introduced
                                           (NO 2) emissions rise above defined          likewise. At the regional level, the
urban access regulations to improve
                                           maximum levels. During these inci-           city of Barcelona, its metropolitan
congestion, pollution, noise, and/or
                                           dents, vehicles with no environmen-          area, and the government of Cata-
accessibility.
                                           tal car label are not allowed to enter       lonia have set up an internet plat-
In the case of Madrid, restricted          the LEZ. For labeled cars, access is         form called LIVE platform (Logis-
access regulations to defined inner-       progressively restricted in descend-         tics for the Implementation of the
city centers, so called Residential Pri-   ing order (B, C, ECO, zero-emission)         Electric Vehicle) that does include
ority Zones, were first established in     according to the severity of the pol-        information about HEVs. Launched
2005. A LEZ, termed Central Madrid,        lution episode. This regulation will be      in 2011, the homepage explains the

WORKING PAPER 2019-12                                                       INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION      9
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

various financial assistance schemes                                vehicle technologies available, includ-                                     campaigns when they introduced new
and other incentive programs—                                       ing HEVs (Live, 2018).                                                      access regulations or anti-pollution
national, regional, and local—for the                                                                                                           measures, also affecting drivers of a
purchase and operation of alternative                               The city of Madrid as well the the City                                     HEV (City Council of Madrid, 2018i;
fuel vehicles in Spain. It also offers a                            Council of Barcelona and its Metro-                                         Open Metropolis Barcelona, 2017). A
cost comparison tool for the different                              politan Area, carried out information                                       range of further actions were taken

Registrations (yearly)                                                                                                       National scrapping
                                                                                                                       program: Aid of €1,000 or
80,000                                                                                                                     €2,000 (PIMA Aire 2)
                                                                                                                                                        National scrapping
75,000          National/regional measure to promote HEVs                                                               National scrapping              program: Aid of €1,000 or
                                                                                                                  program: Aid of €1,000 or
                Regional/local measure to promote HEVs                                                                €2,000 (PIMA Aire 1)
                                                                                                                                                        €2,000 (PIMA Aire 3)
70,000
                                                                            National/regional scrapping
65,000                                                                         program: Reduced loans             Catalonia:                  National scrapping
                                                                                (VIVE Plan 2008-2010)         30% reduction                   program: Aid of €2,000
60,000                                                                                                          on road tolls                 (PIVE 4)

55,000                                                                         National/regional aid
                                                                                plan: Minimum aid of
                                                                                                                  Barcelona:
50,000                                                                         €1,500 (Plan 2000 E)
                                                                                                            Plan for Energy,                  National scrapping
                                                                                                            Climate Change                    program: Aid of €2,000
45,000                                                                              Extremadura:             and Air Quality                  (PIVE 3)
                                                                                    Maximum aid                   2011-2020
40,000                                                                                 of €2,300
                     National decree regulating                                                                 Catalonia:
35,000                 that cities can provide a                                                                  Internet
                    reduction on ownership tax                                                                 platform to                National scrapping
30,000                      for HEVs up to 75%                      Valencia: Maximum aid
                                                                      of €2,000 (Program
                                                                                                          raise awareness                 program: Aid of €2,000
                                                                                                                                National (PIVE 2)
                                                                                                          (LIVE Platform)       scrapping
                                                                            CO2TXE 2008)
25,000                                                                                                                          program:
                                                                                                                                Aid of
                                                       Andalusia:
20,000                                         Information about
                                                                                                                                €2,000
                                                                                                                                (PIVE 1)
                                                                                                                                                   National scrapping
                                                     aid program      Registration tax                                                             program: Aid of
                                                                       exemptions for
15,000                                                                  vehicles up to
                                                                                                                                                   €2,000 (PIVE 5)
                Castile and León:                                       120 g CO2/km                                                                                             See details based on
                                                Andalusia:
10,000          Maximum aid of
                                              Maximum aid
                                                                                                                                                                               quarterly registrations
                €4,800                                                                                                                                                      from Q1/2014 to Q4/2018
                                                of €3,000
 5,000                                                                                                            Madrid (autonomous community):
                                                                                                                         Aid of €2,000 (PIAM Plan)
      0
      2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010                                                                 2011      2012 2013 2014 2015 2016 2017 2018

Registrations (quarterly)
22,500                                                                                                                             Madrid (autonomous community):                              Madrid (city):
                                                                                                                                Aid up to €3,000 (PIVCEM Plan 2018)                            Preferential access to
21,000                                                                                                                                                                                         Low Emission Zone

                                    Madrid (autonomous                                                                              Madrid (autonomous community):
19,500                              community):                                                                                      Aid of €3,000 (PIAM Plan 2018)
                                    Aid of €3,000
18,000                              (PIVCEM Plan)
                                                                                                                          Madrid (city):
                                                                                                                      Aid up to €3,000                                                         Madrid (city):
16,500                                                                                                                (TAXIFREE 2017)                                                          Information
                                                                                                                                                                                               campaign about
                                                                                                                                                                                               Low Emission Zone
15,000                                                         Castilla-La Mancha:
                National scrapping                             Regulatory base for                                                                                      Catalonia:
                                                                                                                                                                    Aid of €1,000
13,500             program: Aid of
                 €1,000 or €2,000
                                                                      financial aids     Directive for
                                                                                         environmental car                                                                              Castilla-La Mancha:
                     (PIMA Aire 4)                                                       labeling differented                                                   National Air            Aid of €3,000
12,000                                                                                   by four categories                                                     Quality Plan
                                                                                                                                                                2017-2019
                                               Guideline for
10,500         Madrid (city):
                                               environmental car labeling
                                                                                                                                                                (Air Plan II)
               50% discounted
                                               of zero-emission vehicles                                                                                                             Madrid (city):
               parking fee
9,000                                                                                                                                                                                Aid up to €3,000
                                                                                                                                       Madrid (city):                                (TAXIFREE 2018)
                                                                                                                             Air Quality and Climate
 7,500                                               National scrapping                                                        Change Plan (Plan A)
                        Catalonia:                   program: Aid of
                       Regulatory
6,000                    base for
                                                     €1,500 (PIVE 8)
                    financial aids                                                                                                                          Barcelona: Preferential access
                                                                                                                                                            to Low Emission Zone
 4,500                                                                                      Madrid (city):
                                                                                            Aid up to €3,000
 3,000                                                      20% tax reduction on
                                                                                            (TAXIFREE 2016)
                                                                                                                                                            Barcelona: Information
                                       National scrapping                                                                                                   campaign about Low
               National scrapping                           personal income tax
 1,500         program: Aid of
                                       program: Aid of
                                       €1,500 (PIVE 7)
                                                            for privately using a                                                                           Emission Zone
               €2,000 (PIVE 6)                              HEV as company car
      0
     Q1/2014       Q3/2014               Q1/2015             Q3/2015            Q1/2016            Q3/2016               Q1/2017               Q3/2017              Q1/2018            Q3/2018

         Q2/2014             Q4/2014               Q2/2015            Q4/2015            Q2/2016                Q4/2016              Q2/2017              Q4/2017               Q2/2018         Q4/2018

Figure 8. HEV registrations and selected national, regional, and local measures to promote HEVs.

10   INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION                                                                                                                              WORKING PAPER 2019-12
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

in the past to raise awareness. For      • The transition to HEVs in Spain is      in 2018, rising by 8 percentage
example, in the beginning of 2006 the      driven largely by a series of push-     points compared to 2017—has
Andalusian Energy Agency launched          pull regulations and incentives.        incorporated a mix of measures
a campaign in dealerships, distribut-      The Spanish national government         such as tax benefits, financial
ing brochures to inform specifically       as well as devolved regional and        incentives on car purchase tar-
about the advantages of HEVs and           local authorities implemented           geting specific user-groups, and
the regional aid program including         a range of measures—including           reduced road tolls and parking
purchase incentives for HEVs (Bola-        financial incentives, discounts,        fees, all reducing a vehicle’s cost
ños, 2006).                                preferential access to LEZs, and        of acquisition and ownership. In
                                           awareness-raising campaigns—to          addition, HEVs eligible for an ECO
                                           spur the uptake of alternative fuel
Concluding Thoughts                        vehicles including HEVs across all
                                                                                   label have prioritized access to
                                                                                   the LEZ introduced in November
Spain is one of the strongest HEV          market sectors. At the same time,       2018, while access for high emis-
markets in Europe in terms of total        gasoline and diesel vehicles with       sion vehicles is becoming more
sales volumes and relative European        high emissions have been subject        and more restricted in this area.
market shares. In the past, a variety      to a gradual tightening of their
of measures have been adopted at           regulatory framework with mecha-      For the future, there are several
the national, regional, and local lev-     nisms including higher tax levels,    upcoming policies scheduled for
els to stimulate the growth of alter-      or total bans from inner-city LEZs.   2019 and subsequent years. These
native fuel vehicles including HEVs.       In addition, the HEV market ben-      include the official implementation
Figure 8 plots a selection of key          efited from the decreasing sales of   of Madrid’s LEZ in the beginning of
national, regional, and local measures     diesel cars in the aftermath of the   2019, and the progressive restriction
launched from 2001 to 2018 in rela-        diesel scandal in 2015.               of high-emission gasoline and die-
tion to HEV sales. The measures are      • Over the past three years,            sel cars in Barcelona and its metro-
marked by the date on which they           regional and local authorities        politan area. Following the previous
were coming into effect. The duration      have been the main agents of          trends, these measures should help
of incentive programs or preceding         growth in the Spanish HEV mar-        to further expand the Spanish mar-
announcements on new programs or           ket. Previous national efforts        ket for alternative-fuel and low-emis-
changes in policy—for example, the         have focused mainly on finan-         sion vehicles, including HEVs.
introduction of Madrid’s new LEZ in        cial incentive programs, however
November 2018—which might have             they proved to be complex and         From a European and global perspec-
affected consumer’s purchase deci-         inconsistent due to multiple pro-     tive, Spain is an interesting case study
sions in favor of a HEV prior to the       grams covering short time peri-       for the uptake of HEVs. The Spanish
implementation date, are not illus-        ods with gaps between transi-         HEV market development shows that
trated. However, Figure 8 shows that       tional periods and consecutive        despite the lack of high tax advan-
particularly since the beginning of        phases, as well as inadequate         tages for HEVs, national and particu-
2015, sales of HEVs have increased         funding to meet the resultant         larly regional and local incentive pro-
steadily despite the termination of        demand generated by certain           grams reducing the acquisition and
the national scrapping programs.           schemes. Thus, the current transi-    ownership costs as well as prefencial
Accompanying regional and local            tion toward HEVs is led mostly by     access to restricted urban areas can
measures of the past have helped to        regional and local policies. This     have a strong influence on consum-
spur the HEV market in Spain, driven       is supported by the continued         ers’ purchase decisions in favor of a
by Madrid and Barcelona.                   increase in hybrid sales after the    HEV. As such, Spain can provide a
                                           end of the last national incentive    best-practice example for how par-
Based on the findings in this report,      program. The autonomous com-          ticularly regional and local measures
the following key aspects should be        munity Madrid—which made up           can help to spur HEV sales also in
highlighted:                               for 40% of all HEV sales in Spain     other markets.

WORKING PAPER 2019-12                                              INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION      11
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

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12   INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION                                                          WORKING PAPER 2019-12
SPAIN’S BOOMING HYBRID ELECTRIC VEHICLE MARKET: A SUMMARY OF SUPPORTING POLICY MEASURES

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