Moves Plan III, or the adventure of requesting aid to purchase an electric vehicle

Spain is one of the European Union states with the lowest percentage of electric car registrations, around 5% of the total for several years now. To encourage electric vehicle registrations, the Spanish government has developed the Moves program, a plan of aid and incentives for electric car buyers. This program has caused headaches for many users and results in a waiting period of around a year and a half between the purchase of the vehicle and the receipt of aid and subsidies.

This April, the Congress of Deputies ratified the new decree regulating the Móves III plan for this year. Management is the responsibility of the various autonomous communities. In Catalonia, this plan is managed by the Catalan Energy Institute (ICAEN) and is aimed at private buyers, companies, and various local public administrations. However, applications have not yet been accepted, as Catalonia has not yet received the allocated budget transfer.

The Moves III plan aid

Private buyers of an electric or electrified vehicle (cars, vans, or motorcycles) can apply for a purchase grant of up to 7,000 euros and a subsidy of up to 70% of the total cost of installing a charging station, which can reach 80% if the beneficiary population is less than 0.

If a private buyer wants to purchase an electric car, the Moves III plan provides an incentive of €4,500, which can reach €7,000 if it is accompanied by the scrapping of a combustion vehicle more than seven years old. However, the beneficiary of the aid has a maximum threshold of €45,000 to apply for the aid (cars with a price higher than this cannot apply for subsidies), a figure that increases to €53,000 if the new vehicle has eight or nine seats. Vans have a price threshold of €66,250, and electric motorcycles, €12,500.

In the case of electric vans, all private buyers are eligible for a purchase incentive of €7,000, which can reach €9,000 if they provide a van for scrapping. Finally, electric motorcycles receive a grant of up to €1,100, which can reach €1,300 if they combine it with the scrapping of an old motorcycle.

In addition to these benefits, there is a mandatory discount of at least €1,000 that must be applied by the dealership where the electric car or electric van is purchased, but this obligation does not apply to the purchase of an electric motorcycle. Finally, buyers of an electric vehicle can also add a maximum deduction attributable to the purchase price of the vehicle, and a maximum of €600 if a charging station is installed.

A complicated procedure with repercussions on the income tax return

In other European countries, discounts linked to European funds are immediate and are managed directly by the dealer or electric vehicle manufacturer with the relevant authorities, but in Spain, the procedure is a bit more complicated. The architecture of the aid system designed in Spain places the responsibility for bureaucratic tasks on the buyer, since it is the user who purchases the vehicle for the set amount and then addresses the regional administrator and initiates the administrative procedures for collecting the aid and subsidies. Each autonomous region has an allocated fund from Europe and managed by the Ministry of Industry, which generates some difficult-to-explain dysfunctions, such as the exhaustion of these funds in some autonomous communities, while others still maintain a surplus and do not fully exhaust the resources from the European Union. Among other things, this reality is explained by the fact that the only liaison body with the European Union for the processing and justification of funds allocated for the purchase of electric vehicles is the Ministry of Industry and Tourism. This leaves no room for negotiation or real dialogue between regional governments to scale resources and streamline administrative procedures to meet the real needs of people who want to buy an electric vehicle.

For buyers, this administrative procedure involves completing a series of documents and attaching invoices and certificates through an electronic platform for validation by the Generalitat's technicians. The process, which in some cases can take more than twelve months—although various administrations state that the average wait time is between three and six months—can lengthen the collection of the aid, causing it to end up arriving a year after the vehicle was purchased, especially if the electric vehicle was purchased during the last six months. This reality can also cause some problems with the Treasury, since some buyers and beneficiaries of the Moves plan aid do not declare this subsidy in their annual tax returns, especially if the aid was collected in a calendar year subsequent to the vehicle's purchase, which leads to numerous requests from Treasury technicians and inspectors.

Financial aid received through the Moves Plan must be taxed as "capital gain not derived from the transfer of assets" in box 301 of the income tax return. It is added to the general income tax base, and is taxed at the corresponding percentage rate based on the beneficiary's income. For example, someone earning up to €35,000 per year would have to return 30% of the amount received through the Moves III Plan. If this taxpayer had received aid of €7,000, they would have to return €2,100 in their annual tax return.

Although there is some consensus among manufacturers' associations, retailers, and the vast majority of buyers regarding the need to move toward a model of aid and subsidies that genuinely incentivize the purchase of electric vehicles, the truth is that Moncloa does not plan to modify the design of the architecture for European funds allocated to the decarbonization of the vehicle fleet.