To make up for missing fossil fuel excise tax money from 2018, Iceland introduced a charge (tax) for every kilometer driven for drivers of electric vehicles (BEVs), plug-in hybrids (PHEVs) and hydrogen cars. This amounts to 6 Icelandic krona (1 CZK) for BEVs and hydrogen and 2 Icelandic krona (0.33 CZK) for plug-in hybrids.
On average, private individuals in Iceland drive 14,000 km per year, which means that electric motorists and drivers of hydrogen cars pay an additional 84,000 Icelandic crowns to the state, i.e. about 13,744 Czech crowns. For plug-in hybrids, it will then be 28,000 Icelandic crowns, i.e. some 4,581 Czech crowns.
Owners of electrics, hydrogens, and plug-ins must track their mileage and report it at least once a year on state-mandated websites, with a default of reporting now, in early 2024. Mileage payment is required monthly.
By 2025, a similar fee will be introduced for petrol and diesel engines, but it will replace the fuel tax. However, according to experts’ calculations, it is expected that it will still be cheaper to operate an electric car in Iceland than a gasoline or diesel combustion car.
Specifically, it should be 160,000 Icelandic crowns (CZK 26,198) more expensive to operate an internal combustion vehicle running on gasoline or diesel than an electric one. This calculation includes an average mileage of 14,000 km, carbon tax, higher value added tax, higher vehicle tax and pump charges.
How is it in the world and here?
Even drivers in other countries will probably not avoid the system of taxation of electric cars, as the states will have to somehow replace the missing money from the consumption tax on fuel. But it is also quite possible that additional fees will be imposed on internal combustion vehicles and their fuels.
For now, various COs apply2 taxes during registration, i.e. vehicle operation in, for example, Austria, Belgium, the Netherlands, France or Norway. In the Czech Republic, we still pay an eco-fee when passing vehicles that meet EURO 2 and below, however, there is talk of introducing a toll when entering the center of Prague, where it is possible that electric cars will be discounted.
Another benefit of electric cars (and until 3/2024 also plug-ins) in our country are free highways, i.e. cheaper (from 3/2024) highways for plug-in hybrids and convenient parking in selected Czech cities. But be careful, this benefit is supposed to end in Prague this year.
However, the Icelandic government will support the purchase of electric cars with various incentives and further expand the network of charging stations. Investments in the overall road infrastructure are to be partially covered by the fees listed above. So the island nation seems to be a pioneer, and time will tell how successful.