Electric vehicle regulation and law in the Czech Republic

With 20% of the country’s industry connected with the automotive industry, the health of the Czech economy relies on car production. In 2016, 127 automobiles were produced per 1,000 inhabitants (1.35m altogether), making the country the second-largest car producer per capita in the world (behind Slovakia). The country is the home of Škoda Auto and other car producers such as Hyundai, Toyota, Peugeot and Citroën. More than half of the top 100 global tier-one suppliers to the automotive industry operate in the country. E-mobility is being discussed and has been at the core of several official programmes. The country has significant potential for the development of EVs. 1
https://www.czechinvest.org/cz/Sluzby-pro-investory/Klicove-sektory/Automobilovy-prumysl

1. What EVs have been deployed in your jurisdiction to date?

387 EVs and 3,300 hybrid vehicles (including 239 plug-in hybrids) were registered in the Czech Republic in 2017. Year on year, this represented an increase of 47% in sales of EVs and 175% in sales of hybrid vehicles – only 262 EVs and 1,024 were sold in the previous year. Altogether, EVs and hybrids represented 2.7% of the new car sales in the Czech Republic in 2017. 2
http://www.hybrid.cz/rok-2017-v-cesku-387-prodanych-elektromobilu-temer-3000-hybridu
 There are currently around 1,500 EVs registered in the Czech Republic. The business should have significant opportunity for future development, given the potential of 5.6m cars registered in the country. 3
https://archiv.ihned.cz/c1-66040450-stat-da-stamiliony-na-rozkvet-aut-na-elektrinu-ceska-ekonomika-na-jejich-rozsireni-doma-i-v-evrope-zivotne-zavisi

In October 2017, the Czech government adopted a Memorandum on the Future of Automotive Industry 4
https://www.mpo.cz/assets/cz/prumysl/2017/10/memorandum-o-budoucnosti-autoprumyslu-v-CR.pdf
 in the Czech Republic (“the Memorandum”) dealing with the support of electric cars. This document (particularly its annex 5
https://www.vlada.cz/assets/media-centrum/aktualne/Akcni-plan-o-budoucnosti-automobiloveho-prumyslu-v-CR.pdf
) together with the Czech National Action Plan for Clean Mobility (approved by the Czech government in 2015 6
https://www.mpo.cz/assets/dokumenty/54377/62106/640972/priloha001.pdf
) introduces a series of measures to support the use of EVs. Although these are not legally binding documents for the general public, they will be taken into strong consideration for the legally binding measures which are expected to follow in the near future.

Based on the Memorandum, the government plans to: analyse ways of supporting the sale of EVs; analyse and possibly introduce faster tax depreciation rates; analyse the support of leasing to increase the usage of EVs; favour EVs in city traffic; introduce new subsidies for sale of alternative fuel vehicles; and analyse the methods of construction of public and private charge stations.

2. Is there any specific legislation for/regulation of EVs in your jurisdiction?

There is no specific regulation solely for EVs in the Czech Republic. However, there are some partial regulations favouring electric vehicles as described in more detail under point 3 below.

3. What measures promote EVs in your jurisdiction?

4. Who are the main entities (e.g. developers, government, System Operator) and what are their roles in the deployment of EVs in your jurisdiction?

  • Government – responsible for the deployment of the Memorandum and coordination of politics. The government’s National Action Plan for Clean Mobility expects 1,300 EV charging stations by 2025 and an additional 250,000 EVs in operation by 2030. 15
    https://www.mpo.cz/assets/dokumenty/54377/62106/640972/priloha001.pdfpo.cz/assets/dokumenty/54377/62106/640972/priloha001.pdf
  • The Ministry of Industry and Trade, Ministry of Environment and Ministry of Transport – main ministries responsible for carrying out the policies, administering subsidies and for preparing legislative changes for future development.
  • Automotive Industry Association – its 146 members include the car manufacturers present in the Czech Republic such as Škoda Auto, Hyundai, Toyota, Peugeot or Citroën, manufactures of car parts, and other organisations such as universities or auto clubs. The association represents the automotive industry as an integrated sector and promotes EVs in the Czech Republic and abroad in all appropriate places and at all levels. It promotes cooperation between the Czech automotive industry and foreign partners.
  • Local authorities – play important role in adopting local measures such as parking rules (possibly favouring EVs) or preferred lanes. Local authorities may also play key role in the construction of charging points.
  • Electricity market participants – electricity generators, suppliers and, most importantly, distribution grid operators that play a vital role in developing electro mobility in the Czech Republic.
  • Charging station operators – mostly electricity market participants or car manufacturers themselves.

5. What are the main challenges to further deployment of EVs in your jurisdiction? How have EV developers sought to overcome these challenges to date?

  • Price – EVs remain more expensive than combustion-driven vehicles; state subsidies should compensate the difference between the prices; tax benefits (e.g. faster tax depreciation rates) are also considered.
  • Limited range – EVs have a rather short range which limits them from broader use, along with the limited number of charging points.
  • Charging infrastructure – the infrastructure needs to be developed further, especially in the countryside or smaller cities.
  • Capacity of the grid – currently and in the foreseeable future the grid will be satisfactory to support the charging infrastructure. In the mid- to long-term, further investments in the grid will be needed to enable wider use of EVs.
  • Financial support – there are subsidies available for municipalities and entrepreneurs; non-entrepreneurs (natural persons) cannot obtain any direct subsidy (for purchase of EVs).
  • Legal framework – there is no specific regulation that would enable faster and easier construction of the charging infrastructure.
  • Education and promotion – there is a lack of understanding and awareness of EVs – promotion and education activities are required to highlight the availability and use of EVs. 16
    http://www.munimedia.cz/prispevek/rozvoj-elektromobility-v-cesku-brzdi-byrokracie-a-nedostatek-nabijecich-stanic-12746/
Portrait ofLukáš Janíček
Lukáš Janíček
Partner
Prague
Lukáš Výmola