NoVA: The delivery van becomes pure luxury

NoVA: The delivery van becomes pure luxury

The NoVA increase and the introduction of this “luxury tax” (it was developed as a replacement in 1992) for light commercial vehicles are getting closer. From July 1st, the government's planned greening of the standard consumption tax should take effect. Almost all vehicles will then be taxed additionally (the few exceptions include fire engines and rescue cars).

For the first time, light commercial vehicles with a total weight of up to 3.5 tons will also be subject to NoVA. And because the NoVA is linked to CO2 emissions, these vehicles in particular are becoming noticeably more expensive. “It's no wonder that anyone who stands in the wind with their broad faces and closet walls like the Opel Vivaro and Movano, Renault Trafic and Master, Mercedes Vito and Sprinter or VW T6 and Crafter will hardly use less than five liters in everyday life,” emphasizes Henning Heise, chairman of the Austrian Fleet Association (FVA). Even those who need all-wheel drive or a high roof in their everyday work use more on the road. And from now on I will be punished for it.

Entrepreneurs suffer

These vehicles will increase in price by several thousand euros from June 30th to July 1st, 2021, and cars will increase in price by a few hundred euros in the best case, as Heise explains. “It really hurts the entrepreneurs,” says the association chairman, who has no understanding for this, especially in difficult times like these.

He certainly understands the government's fundamental desire to reduce CO2 emissions in the transport sector: "There's nothing bad about that per se - the fleet association is also committed to a constant reduction in CO2 emissions through information events and targeted know-how transfer." However, whether NoVA 2021 and in particular the further planned adjustments in the following years are the right instrument for achieving the goals remains to be discussed further.

Advance purchases

There are currently advance purchases being made where ecological aspects are sometimes not necessarily the focus. “If you can, buy now,” says Heise. This is confirmed by car dealers who report a real boom. Peter Feldscher, Managing Director of PSA Retail Austria, recently told the automotive industry: “Demand for commercial vehicles is exploding.” According to Heise, some brands and models are already sold out.

Above all, he warns against the gradual tightening of the NoVA decided by the federal government until 2024. The CO2 limits for the calculation and the penalty value continue to fall every year. First, the current allowance of 115 grams of CO2 per kilometer will be further reduced. By 3 grams in 2021, then by 5 grams from 2022 to 2024.

The next step is to gradually reduce the penalty amount until 2024. During this period, this will increase from 50 to 80 euros per gram. From 2021, it will be due for CO2 emissions of 200 grams, and from 2024 at 155 grams. There are no exceptions for commercial vehicles.

The maximum tax rate will also be raised from the current 32 percent to 80 percent in 2024. The previous NoVA cap of 32 percent will be history from mid-2021. The plan is initially to increase it to 50 percent, with a further 10 percent being added every 12 months. In 2024, the new NoVA upper limit will be 80 percent.

73,545 euros for an Opel Movano

Heise: "The numbers are currently overwhelming for many. But in concrete terms this means that a Mercedes Sprinter, which costs 48,959 euros today, will be 19,563 euros more expensive from July 1st. In 2024, when the maximum NoVA rate is 80 percent according to the government plan, the van will then be available from dealers for 76,000 euros. That's an increase in price of 55 percent!"  The same applies to the Opel Movano, which will increase in price from 42,647 euros to an impressive 73,545 euros in three years, or even by 72 percent. The bottom line for the FVA chairman is clear: "Cars are becoming more expensive and the prices of commercial vehicles are growing exponentially. And this at a time when the majority of domestic companies are already economically depressed due to epidemics."

In addition, especially in the commercial vehicle sector, the electrically powered alternatives do not yet provide what users would need in terms of payload, range and charging power. This is also why conventional vehicles will probably be driven for longer.

This is also shown by a survey by the fleet association for NoVA, in which almost 180 companies with a total of almost 40,000 vehicles took part: According to those surveyed, the switch to light commercial vehicles fails due to insufficient range (87%) or payload (62%) as well as a lack of options for special bodies such as platforms or sales vehicles - and not least because of this, 99 percent of all study participants state that they want to use the vehicles for longer in the future. 

Not a good steering effect

Heise: "What does that mean? The old 'stinkers' stay on the streets - and that doesn't do anything for the climate." Measures would also be needed to gradually reduce the number of end-of-life vehicles. If only new cars are made more expensive, then the environmental impact is relatively small. Only around 270,000 new cars are sold every year and, so the argument goes, they do not fully replace these very old daily drivers, but rather slowly move down the recycling chain

"Anyone who drives a van with emissions class Euro 4 doesn't do so because they like vintage commercial vehicles, but because they don't have the money for a new vehicle. The NoVA affects the middle class, which is already expanding downwards due to the crisis and has generally had to bear the greatest burden of taxes and contributions so far," says Heise.

There is a lot of dissatisfaction about this, as the FVA survey shows: 90 percent consider the timing of the NoVA increase to be wrong, 93 percent find it makes little sense to pay out billions in subsidies and increase taxes at the same time, and 88 percent categorize NoVA as not being a suitable tax instrument at all for reducing CO2 emissions from transport in the long term. 

Note: The FVA is launching an awareness campaign

The Fleet Association Austria will explain all aspects, problems and weak points of the NoVA for light commercial vehicles over the next 4 weeks. The reasons: On the one hand, many companies are still not aware of the financial implications. On the other hand, the FVA doubts the effectiveness of NoVA in reducing CO2. 

Tip:You can take part in the FVA survey on the subject of the NoVA increase here participate.