From next year, the import and sale of electric vehicles will be subject to value-added tax (VAT). This change may affect price dynamics in the car market, consumer behavior, and the overall competitive environment. The application of VAT may lead to an increase in the prices of electric cars, and consequently, a certain slowdown in sales pace?
Transportation expert Eldəniz Cəfərov stated in an interview with Trend that if imported electric cars are subject to value-added tax, naturally, there will be an increase in the price of such vehicles.
He noted that the imposition of value-added tax on electric cars will not have a significant overall impact on the car market.
"Although there is interest in electric cars in our country, their popularity level is not very high. There are some reasons for this. For example, currently, the number of charging stations in the country is low. Also, there are some problems with spare parts and repair issues for these types of cars."
The expert added that a price increase is expected in Azerbaijan’s car market next year.
Transportation expert Elməddin Muradlı said in his statement that the abolition of VAT exemption will affect the prices of electric cars as well as, indirectly, other cars.
"Electric and hybrid cars were more attractive because they were brought into the country at a cheaper price. This had created stagnation in the second-hand car market."
The expert noted that now, since the price difference will decrease, that is, the prices of electric and hybrid cars will approach those of conventional cars, people will no longer give preference solely to this category when choosing:
On the other hand, interest in electric and hybrid cars was often not because of ecological reasons, but due to the tax benefits implemented by the government. In other words, the reason people bought these cars was more for economic advantages than solely to protect the environment.
He added that if the exemption is abolished, an approximate 15-20% increase in the prices of these cars can be observed.
"At the same time, a certain revival may occur in the conventional car market as well. This revival may also have some effect on their prices," the expert added.
