Vehicle Taxation Varies Wildly Across Europe, Playing Major Role in Electric Car Adoption
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Taxation of vehicles varies widely across Europe, with environmental impact playing a major role. VAT rates range from 17% to 27%, but total taxes differ more.
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Based on OECD data, final car prices including taxes range hugely - from under €27,000 to nearly €180,000 for identical vehicles.
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Electric and hybrid cars tend to face the lowest taxes, while polluting combustion engine vehicles are taxed the most heavily.
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Turkey is an outlier, relying heavily on special consumption taxes that often double the pre-tax prices of vehicles.
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Well-designed vehicle taxes can effectively reduce emissions, with 17 European countries already linking taxes to CO2 levels.