C'ttee challenges Better Place business model

The Zalika Committee proposes prohibiting car importers from selling electricity and battery charging services.

The Zalika Committee on introducing more competition to the car importing sector is considering prohibiting electric vehicle importers from selling charging points, electricity, and battery exchange services. The committee does not mention Better Place by name, but it is clear to whom it is referring. If it does introduce such a ban, this will cause major commercial damage to Better Place, which holds the concession to import electric Renault cars, and is thus, in practice, a car importer.

The committee is striving to protect the principle of "free access" at charging points, so that an electric car manufactured by one company can be charged at another company's point. Since charging points are expected to be a significant source of income, the initial players in the Israeli electric vehicle market are receiving a carrot, and not a stick. On the other hand, the committee proposes supervision over charging service prices, which could be problematic for entrepreneurs who wish to maximize profit. The committee also proposes supervising rates for electricity at charging points.

Perhaps as compensation to entrepreneurs, the committee proposes imposing a "zero tax" on electric cars, and using linear taxation for hybrid cars, and hybrid cars that are charged from the electric grid, according to the proportion of gasoline or electricity used. No doubt Better Place would be happy to receive another 10% tax reduction on purchase tax (it is currently 10%), however chargeable hybrid distributors that are fighting to receive tax breaks similar to those the electric car is receiving would protest.

Published by Globes [online], Israel business news - www.globes-online.com - on December 14, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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