three-year wait, 250 million approved over budget and overburdened regions

Last week, the government announced an extension of the MOVES III plan, extending assistance for the purchase of an electric vehicle (including plug-in hybrids) until the end of the year, which provides a discount of up to €7,000 when the car is scrapped.

The program should be an interesting incentive to buy a car that is not quite running in Spain and whose high price is one of its main drawbacks. The assistance includes cars that are offered at a price of less than 45,000 euros excluding VAT.

But as we speak, the MOVES III plan continues to face criticism from the sector and EV buyers. Delays in collecting aid, uncertainty and resignation. That’s how things are now.

MOVES III plan, how it works

To understand why the MOVES III plan is in the eye of a hurricane, you need to understand how it works. According to IDAE (Institute for Diversification and Energy Conservation), this helpline has already been mobilized. 1.2 billion euros to help purchase electric vehicles.

To this figure, another 350 million euros have been added, to which another 50 million euros must be added to pay for already approved and uncollected applications for the purchase of commercial vehicles. In total, by November 14, 2024, assistance of another 400 million euros must be allocated to promote this technology in our country.

These millions are distributed among the autonomous communities that manage the aid. If you are an individual and you buy a car, as IDAE explains in this guide, you have the option of asking for aid from your autonomous community.

This process, as we explain in this article, is not the same in all regions. The documentation is not exactly the same, and in some cases the buyer is required to provide the documentation, while in others the dealer can do it themselves.

According to IDAE, as soon as assistance is requesteda period that can last up to six months begins for the application to be approved or not. Once approved, a 12-month period opens during which we will have to submit the necessary documentation and make the payment of assistance.

The theory is that this is because most of the aid is provided within 18 to 24 months of the request. In addition, we must keep in mind that this aid must be declared in the income tax return, so depending on our income, the final net amount will differ from the above-mentioned 7,000 euros.

To speed up the process and offer customers more guarantees, some brands such as MG, Fiat or Renault have started to independently promote the MOVES III plan with a discount that is applied at the time of purchase.

Criticism, uncertainty and even resignation

Since the launch of the assistance program, the automotive sector has repeatedly demanded that purchase assistance not pass through the autonomous communities and be reflected directly at the time of purchase. This way, they say, creates greater trust in the buyer.

Ignoring subsequent extensions, the government committed to including this change in the procedure for opening up new aid in February 2024. However, four months later, the MOVES III plan, which expired on July 31 this year, expanded its financial package, but the procedure did not change one iota.

As a measure of pressure, Wayne Griffiths, Seat’s chief executive and president of Anfac (the manufacturers’ association), resigned from his last position two weeks ago. In parting, he assured that “Spain must improve the public charging infrastructure and make it easier to buy electric cars with a real tax credit plan that allows you to get help when you buy.

The steps taken have drawn criticism from the sector, but above all they raise doubts about who will receive the assistance and when, despite the purchase of an electric vehicle and their approval.

The transformation of autonomous communities into intermediaries in the delivery of aid led to delays in payments. In Murcia, some beneficiaries waited up to three years for aid payments to be announced in January last year, as explained in Is it true.

But others, such as Madrid, note in Five days, collapsed. According to economic media, the region received applications totaling €466.74 million and executed €336.80 million. With an initial budget of 169.12 million euros, assistance was requested. 279% higher than included in the budget.

Madrid is followed by the Balearic Islands, where requests exceed the initial budget by 173%. The amount requested for the purchase of an electric vehicle is 45.91 million euros, while the initial budget was only 26.58 million euros. Castile and Leon, Castile-La Mancha, Extremadura, Andalusia, La Rioja, the Valencian Community, the Basque Country, Galicia, Cantabria, Asturias and Murcia also exceeded the initial budget.

Only Aragon, the Canary Islands, Navarre, Catalonia and the autonomous cities of Ceuta and Melilla have a budget that has not been exceeded. The least adapted of the autonomous communities is Catalonia, where the budget was set at 233.76 million euros and aid requested amounting to 201.75 million euros.

The overall photograph is problematic. In the absence of this extension loan under the MOVES III plan, the initial budget allocated was 1,087 million euros, within the framework of the program, which will have up to 1,200 million euros. However, applications were received for the amount of 1,448 million euros. This is 133% above the budget.

The extension of the MOVES plan by 350 million euros is intended to compensate for this difference between the applications approved and the funds allocated for the purchase of electric vehicles, which currently amounts to almost 250 million euros compared to the announced 1,200 million euros.

The big problem is that with the spread of the program November 14applications that have a very small monetary benefit will continue to be processed and accepted to ensure that buyers benefit from the aid in question. Meanwhile, Spain continues to fail to break the 5% market cap for electric vehicle purchases.

Photo | BID

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