The lower use value for hybrid cars has already led to soaring demand.
Sources inform ''Globes'' that the Ministry of Finance is considering better tax breaks by lowering the use value on electric cars in company fleets. The ministry wants to apply the reduction within months, but it has not yet decided whether to grant the same reduction that applies to hybrid cars, or a larger one.
Under the green taxation policy, hybrid cars receive a NIS 500 reduction in their monthly use value. The purpose is to improve hybrid cars' competitiveness for car fleets. A similar benefit for electric cars will come on top of the new continuous use value method that is based on the retail price of cars. This is because the catalogue price of electric cars, excluding the battery, will probably be less than for gasoline-driven cars because the purchase tax on electric cars is 10%, compared with 83% for regular cars.
The lower use value for hybrid cars has already had a major impact on the market, reflected in the huge increase in orders for hybrids by operators of car fleets. These orders are due for delivery beginning in January. Honda reports that orders for its Insight hybrid have surged, and Toyota reports strong demand for its Prius hybrid.
Published by Globes [online], Israel business news - www.globes-online.com - on December 21, 2009
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