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

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  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

In October 2017, the Czech government adopted a Memorandum on the Future of Automotive Industry 4  in the Czech Republic (“the Memorandum”) dealing with the support of electric cars. This document (particularly its annex 5 ) together with the Czech National Action Plan for Clean Mobility (approved by the Czech government in 2015 6 ) 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.

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.

• Tax benefits – there is an exemption from road tax for EVs or hybrid vehicles. Generally, only cars and other vehicles used for doing business are subject to road tax. This measure therefore doesn’t influence consumers. It also has a limited effect on businesses as the road tax is usually quite low 7 .
• Dedicated parking spaces – there are some dedicated parking spaces for EVs including charging points (e.g. parking places only for EVs including a charger) in some cities such as Prague, Ostrava, Brno, Pilsen or other bigger cities 8 .
• Benefits when parking EVs – EVs enjoy some preference in the parking policy in Prague (e.g. lower parking fees or allowing parking in residential areas for non-resident EVs). 9
• Preferred (bus) lanes – many have speculated that EVs will have different coloured number plates to clearly distinguish them from combustion engine vehicles. If this measure is taken, EVs may receive preferential treatment in city traffic, such as the possibility to use specific lanes. Plans for such laws remain controversial, and have attracted criticism on the basis that they could significantly complicate public transport. 10
• Subsidies – municipalities may ask for state subsidies to buy EVs, plug-in hybrids or even other alternative fuel cars (such as cars driven by gas – CNG or LPG). The amount of the subsidy may be up to CZK 250,000 (EUR 10,000) per vehicle depending on the type of fuel used by the car. For other vehicles such as buses it may rise up to CZK 1m (EUR 40,000). The Ministry of the Environment is administering a support scheme, with, CZK 100m (EUR 4m) required to be distributed for EVs. 11
• Support for the installation of charging points – charging points are being constructed by private subjects, mostly large grid operators such as CEZ, E-on or PRE (a large electricity company). Some car manufacturers such as Tesla are building charging points themselves. Building this infrastructure may be supported by a subsidy based on the Traffic Operation Programme 2014 – 2020, administered by the Ministry of Transport, under which CZK 130m (EUR 5,2m) may be used to build 125 stations by 2023. Only subjects which operate at least 10 charging points were able to apply for the subsidy and the application deadline was 4 May 2018. 12 13    14

• 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
• 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.

• 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