Without the MOVES Plan, the Spanish automotive sector faces a double challenge: the fall in sales of electric vehicles and the risk of failing to comply with CO2 limits.
Although there was an increase in registrations of zero-emission models in January, this does not yet reflect the impact of the elimination of the incentive following the rejection of the Omnibus Decree.
How does it affect compliance with the “CAFE” Regulation?
“It affects employment, profitability per vehicle and sales volume,” explains Luciana Aguilar, Head of EV Mobility Partnerships South Europe at Ohme, to Mobility Portal España.
The European regulation sets a limit of 93.6 grams of CO2 per kilometre for the average of all cars sold in the EU from 2025.
Failure to comply with these limits carries penalties that can amount to 95 euros per gram of CO2 exceeded per unit sold, which, for large sales volumes, can translate into multi-million euro fines.
To meet these goals and avoid financial penalties, manufacturers had opted for a progressive electrification strategy, where MOVES played an important role.
Without state aid, sales of electric cars could fall and, consequently, sales of combustion models could increase, causing the average emissions of each brand to skyrocket.
If a sufficient volume of zero-emission sales is not achieved and gasoline sales increase, the penalty will be even higher.
To pay this fine, it is necessary to generate income.
“If a high percentage of electric vehicle sales is reached and this is not enough to cover the cost of the fine for gasoline sales, a dilemma arises as to who gets to eat the cake first,” says Aguilar.
And she emphasizes: “In the end, everything is linked together like a domino effect, where each piece affects the next.”
For manufacturers, the challenge is thus twofold.
Selling enough electric cars to reduce their average emissions and avoid fines, but also generating enough income to be able to meet the penalties that could arise from the sale of combustion cars.
“When a brand makes its sales plan for the year, it already has a certain amount of gasoline production to be able to pay the fine with respect to electric vehicle sales,” says Aguilar.
The problem is that, without MOVES, marketing zero-emission cars becomes complicated.
“Without any support, those who had already decided to make this change will most likely do so, but those who were in the dilemma of whether to do so or not will probably reconsider their decision,” she says.
Sector strategies to mitigate the end of the MOVES Plan
Given this scenario, some car manufacturers have announced discounts equivalent to the MOVES aid.
However, Aguilar warns that these do not match the price of the subsidy.
In this context, she argues that manufacturers with higher contribution margins are more likely to offer real discounts.
“Higher margin brands can absorb some of the cost and offer incentives of their own,” she says.
However, she says that not everyone can afford it, as electric cars still have a high production cost.
The slowdown in electric vehicle sales not only affects manufacturers, but the entire value chain.
The drop in demand also impacts the recharging sector.
“There must be an economic benefit for the population, because if not, it will be very difficult for many people to switch to electric vehicles, even if there is a saving in terms of consumption,” warns Aguilar.
AEDIVE and GANVAM insist that 2025 is a decisive year for the electrical transition in Spain and demand urgent measures from the Government.
“If we want to achieve the target of 5.5 million electric cars by 2030, the pace of registrations must accelerate. Eliminating aid without an alternative transition plan is a strategic mistake,” both associations point out.
Meanwhile, the possibility of a new MOVES remains up in the air.
Although its implementation is planned, its development and legislative approval could take months.
“Implementing a completely new law means that it must be presented to the Congress of Deputies and approved,” explains Aguilar.
She adds: “This process may take a considerable amount of time to complete.”
