Major Developments in 2023

Relevant regulation at a national level

In the regulatory field, the following new measures have been addressed to remove administrative barriers to the deployment of charging infrastructure, as well as measures that facilitate a significant deployment of infrastructure both in service stations and in non-residential car parks (liberalisation of charging activity, simplified permitting procedures, forbidding exclusivity contracts by oil companies with service stations).

Royal Decree-Law 5/2023, of June 28

To promote the acquisition of electric vehicles and the deployment of charging infrastructure by individuals, two new tax deductions for taxpayers were established in personal income tax, until 31 December 2024:

• Deduction of 15% of the acquisition value of a new electric vehicle purchased.The base of the deduction may not exceed to €20,000 and will be constituted by the acquisition value of the vehicle, including the expenses and taxes inherent to the acquisition.
• Deduction of 15% of the amounts paid for recharging infrastructure installation in a property of its ownership. The base of the deduction may not exceed to €4,000 per year.

Order TMA/277/2023, of March 21, which modifies the Order of 16 of December 1997, which regulates access to roads in the state, service roads and the construction of service facilities.To simplify the requirements for obtaining authorisation for electric charging points in the highway network that belong to the state, the presentation of a “responsible declaration” was introduced as an alternative to presenting a contract.This alternative reduces the administrative burden of the procedure and the resolution period of the file and therefore, promoting the deployment of the network of electric charging points in the state highway network.This regulatory modification is part of the set of reforms of the recovery, transformation and resilience plan (PRTR), established to accelerate the deployment of electric vehicles.

Incentives programs to promote EVs

During 2023 the recovery, transformation and resilience plan (PRTR) has provided a great opportunity for electric mobility in Spain. On the one hand, the project for the recovery and economic transformation (PERTE) of the Electric and Connected Vehicle makes it possible to consolidate and accelerate the industrial commitment to electric mobility from the supply side. On the other hand, the MOVES programs designed to promote sustainable mobility make it possible to stimulate this market from the demand side.

MOVES III Program

To give continuity to previous MOVES Program, the Council of Ministers published on April 14, 2021, Royal Decree 266/ 2021. MOVES III establishes direct grants to the different regions within the framework of the PRTR, initially endowed with €400 million, which could be increased up to €1.200 million, at the request of regional administrations.The program will be open to applications until the 31st of July 2024 and is aimed at encouraging, the purchase of electric vehicles and the deployment of recharging infrastructure.At the end of 2023, the budget already enabled to regional administrations, which operates the incentives at a regional level, amounted to €971,79 million, with aid requests for 104,048 electric vehicles and 99,700 charging points.

MOVES SINGULAR PROJECTS II

Through Order TED/800/2021, of July 23, the regulatory bases of the incentive program for singular projects in electric mobility (MOVES Singular Projects II) were approved, within the framework of the PRTR.This program consists of the selection and granting, on a competitive basis, of projects related to experimental and innovative developments, conducted in the national territory, and related to electric mobility: ICT applications, recharging infrastructure, new battery developments and electrical storage for mobility and development of new processes or prototypes of electric vehicle or components.The first call for grants, through the Resolution of September 20, 2021, of the Director General of the Institute for Energy and Diversificiation (IDEA), received an endowment of €100 million.To give continuity to the first call, a second call for aid was approved by the resolution of September 24, 2022, of IDAE, endowed with €264 million. At the end of 2023, a total number of 262 projects (76 projects from the 1st call and 186 from the 2nd call) were being executed with a total subsidy of €313,758,327.02.

MOVES FLEET Program

The Ministry for Ecological Transition and Demographic Challenge, has approved Order TED/1427/2021, of December 17, which regulates the bases of the aid program for light vehicle fleet electrification projects (MOVES FLEET Program), with an initial amount of €50 million and aimed at the selection and concession, under a competitive bidding regime, of aid corresponding to projects for the electrification of light vehicle fleets, carried out in the national territory.The MOVES Fleet Program, managed by the IDAE, is part of the recovery, transformation and resilience plan (PRTR) and complements other programs already published within the framework of the component and investment, such as MOVES IIIand MOVES Singulares II. Included in this program are projects for the electrification of light vehicle fleets by electric and fuel cell vehicles, which operate in more than one region (autonomous community). The projects require renewal of the vehicle fleet, with a maximum of 500 and a minimum of 25 vehicles, per application. Beneficiaries can submit applications for a maximum aid amount of €2.5 million. The projects may include the provision of recharging infrastructure for the new fleet at the company’s facilities including the acquisition or adaptation of energy management fleet systems, digitised route control, and training of company personnel to conduct a transition of the fleet towards electrification.

After that first call for incentives, a second call was approved on November 30th, 2022, for €50 million. As a result of these calls, the total number of registered vehicles with Moves Fleet incentives amounted to 9,200 units and a total of 2,060 charging points have been installed.

Finally, a third call was approved in July 2023, endowed with €30 million and open until October 2023 for aid requests, which are expected to be solved and published by March 2024.Other relevant programs to promote electromobility (National scale)Transformation of heavy vehicles for road transportation: The Council of Ministers published, on November 16, Royal Decree 983/2021, to establish direct granting to the different regions within the framework of the European Recovery and Resilience Facility, endowed with €400 million, for the transformation of passenger and freight transport fleets.At the end of 2023, the budget applied to different regions for these incentives was € 386.9million, with the program being valid for new aid applications until April 30, 2024.

PERTE-VEC

On July 13, 2021, the Council of Ministers approved the first of the Strategic Projects for Economic Recovery and Transformation (PERTE), the one dedicated to the electric and connected car. This is a project based on public-private collaboration and focused on strengthening the value chains of the Spanish automotive industry, a strategic sector for Spain. The objective of PERTE for the electric car is to create in Spain the necessary ecosystem for the development and manufacturing of electric and grid-connected vehicles and to turn Spain into the European Electromobility Hub. The development of this project foresees a total investment of more than to €24,000 million in the period 2021-2023, mobilising private investment of to €19,700 million.According to the data provided in the Recovery Plan approved on June 6, 2023, transfers to PERTE VEC from the first phase of the PRTR amount, so far, to €2,870 million. The addendum reinforces this strategic project with €250 million in additional transfers and another €1,000 million in loans up to a total amount between the first phase of the PRTR, and the addendum worth €4,120 million.On September 15th, 2023, the Ministry of Industry, Commerce and Tourism closed the call for applications called PERTE VEC II with 186 applications received in its two lines dedicated to promoting investment in industrial battery production capacity and supporting investment plans aimed at the industrial value chain of the electric and connected vehicle, its systems,subsystems and components: The mobilisation of resources from both lines amounts to €8.5 billion.

Outlook

Spain has the objective of climate neutrality in the transport sector by 2050, with an intermediate objective of fully decarbonising the Spanish market of new cars and vans by 2040, according to the key target of a progressive decarbonising of the economy. In this way, PNIEC establishes an objective to have 5 million electric vehicles (cars, vans, busses, and motorbikes) on road by 2030. A large number of these will be used in car-sharing platforms, which means around 16% of the current Spanish fleet will be in this category. This implies an accumulated energy savings of 3,524.2 kt for the period 2021-2030, representing a 25% share of the total energy savings expected for the transport sector (13.888 kt) in that period. It is estimated that in 2025 a price parity will be reached for EVs compared to conventional vehicles, so from 2025 onwards, it will not be necessary to give any more public funding for EVs.