Spain Drastically Cuts Subsidies for EV Buyers

MADRID – The Spanish government, pressured by the European Commission to reduce its deficit by nearly half this year, slashes subsidies for purchases of electric vehicles.

The E72 million ($96 million) incentives program was launched in May 2009, but only slightly more than 300 EVs had been registered in Spain by the end of that year. Of those, only 20 were registered by individuals, the rest going to various agencies and departments of the country’s central and regional administrations.

Subsidies for all of those EVs totaled E23 million ($30.7 million), leaving E49 million ($65.3 million) for new incentives. But the Spanish government, ordered by the EC to cut its public deficit from the 8.5% of 2011 to 4.4% at the end of this year, is scaling back the remaining funds to just E10 million ($13.3 million).

The MOVELE (an acronym for mobility with electric vehicles) program is to end Nov. 30.

The decision is a blow to Renault, which has begun production of the Twizy, a scooter-like fore-and-aft 2-seat EV, for global markets in Valladolid, 200 km (120 miles) northwest of Madrid. The auto maker will market another purpose-built EV, the Zoe compact, later this year.

The end of the incentives also will affect General Motors’Adam Opel subsidiary, which will introduce the Chevrolet Volt extended-range electric vehicle in Spain late this month, followed late this year or in 2013 by the Volt’s European twin, the Ampera.

Other brands impacted by the EV subsidies’ cutoff include China’s BYD, distributed in Spain by Berge Automocion, and the Hiriko city car, developed by the Massachusetts Institute of Technology and a consortium of Spanish manufacturers.

A Hiriko was presented in January to EC President Jose Manuel Durao Barroso. The Spanish consortium hopes to begin limited production of the EV in 2013 with an investment of E40 million to E50 million ($53 million to $67 million), eventually creating 800 jobs.  

Ironically, the Spanish Ministry of Industry has subsidized the Hiriko project with E15 million ($20 million).