Millions of electric vehicle owners face post-purchase taxation

In a move that has caught many electric vehicle owners off-guard, Austria has introduced the Motor Vehicle Insurance Tax (MVS) for electric cars, plug-in hybrids, and electric motorcycles, effective from April 1, 2025. This levy, which was previously only applicable to gasoline and diesel vehicles, is set to generate anger and dissatisfaction among affected owners.

The MVS tax in Austria is collected directly via the liability insurance, following a similar model to the German motor vehicle tax. The tax calculation for electric vehicles is based on two factors: engine power and weight. This means that heavyweight electric vehicles like the Audi e-tron 55 quattro or Mercedes-AMG EQS 53 can be due to pay over 1,200 euros annually, while smaller models like the BYD Dolphin are relatively cheap at around 243 euros per year. On average, electric car owners can expect to pay around 400 euros per year, according to the Austrian Automobile, Motorcycle, and Touring Club (ÖAMTC).

The sudden implementation of the MVS tax may come as a surprise for electric car owners who believed they had chosen their vehicles for financial reasons, as electric cars were previously exempt from this tax. The new MVS tax is causing unexpected financial burdens for many electric car owners, who will only receive their back payments in the coming months.

The Budget Consolidation Measure Act 2025, enacted by the Austrian government, has made electric vehicles liable for the MVS tax. This act aims to balance the country's budget, but it has removed the previous incentive for green mobility that was provided through state funding for around 18,000 electric vehicles last year.

Insurance companies in Austria are adjusting billing gradually due to the abrupt implementation of the MVS tax for electric vehicles. Many electric car owners are facing hefty back payments due to this new tax. The Tesla Model Y, for instance, can be subject to up to 972 euros annually under the MVS tax.

The MVS tax applies not only to newly registered electric vehicles but also retroactively to existing registrations in Austria. This means that electric car owners who have been driving their vehicles without this tax for years will now have to pay a significant amount to cover the back payments.

The implementation of the MVS tax for electric vehicles is likely to generate anger and dissatisfaction among affected car owners. Many feel that they have been betrayed by the government, as they were led to believe that electric cars were a more environmentally friendly and cost-effective choice. It remains to be seen how this new tax will impact the adoption of electric vehicles in Austria.