Electric Car: A Scandal of Actual and Fiscal Powers?
This page is translated from the original post "Voiture électrique : un scandale des puissances réelles et fiscales ?" in French.
- 11/08/2025 12:10
The explosion of the power of electric cars is no longer in line with the method of calculating fiscal powers.
While the French State is desperately seeking money everywhere, it will soon have to undertake a reform of its fiscal model concerning electric cars. The shortfall for the country’s coffers is enormous.
One could even push the logic further: the transition to electric is a fiscal shipwreck for France, and its decision-makers don’t seem to be aware of it.
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Why such a discrepancy between power and fiscal horsepower?
The technical sheets of electric cars can be dizzying: even the slightest sedan or family SUV now boasts over 300 horsepower, with acceleration from 0 to 100 km/h in less than 6 seconds. These are very powerful objects not to be placed in just anyone’s hands.
And yet, on the registration certificate, these same models often only claim a handful of fiscal horsepower, between 4 and 8 HP. A striking discrepancy when one knows that a thermal engine of comparable power easily exceeds 20 or 30 fiscal HP. The explanation lies in the way power is measured… and in the regulatory choices that stem from it.
In the field of electric propulsion, it is essential to distinguish between two measures of power. Peak power corresponds to the maximum power that the motor can deliver for a very limited time – generally from a few seconds to about thirty seconds. It allows for sharp accelerations or quick overtaking, but cannot be maintained due to thermal and electrical constraints. The motors, power electronics, and battery heat up quickly, and onboard electronics reduce power to preserve reliability.
However, communication is based on this peak power to entice customers. Conversely, continuous power refers to the maximum power that the motor can provide indefinitely without risking overheating, under normal conditions. This value is measured according to the international standard UNECE R85, which imposes a test over 30 minutes (only). In practice, this continuous power is much lower than the peak power advertised in commercial brochures.
French taxation and the UNECE R85 standard
In France, the calculation of fiscal horsepower for electric vehicles is based exclusively on the standardized maximum continuous power. By retaining this value, which is much lower than instantaneous power, the tax administration assigns to electric models a significantly lower number of fiscal HP than for an equivalent thermal vehicle. After all, thermal cars do not operate at their maximum capacity all the time either. So, double standards?
This method of calculation has a direct effect: it limits the amount of the registration certificate for electric vehicles, which are often completely or partially exempted, and mechanically reduces their potential taxation. It is an incentive lever to encourage the adoption of electric mobility. But will it last in light of France’s impending bankruptcy?
If taxation were to take peak power into account, alignment with thermal vehicles would cause the number of fiscal horsepower to surge, and thus administrative costs.
What is the state’s shortfall?
The shift to electric poses two major fiscal problems for the French state: registration certificates, and then revenue from fuel sales.
For the registration certificate aspect, let’s compare two SUVs of equal power, the BMW X1 35i and the Tesla Model Y Long Range that we would register in Île-de-France. In both cases, 300 peak horsepower and an acceleration to 100 km/h in 5.4 seconds for the first, and 5.6 seconds for the second.
However, in the case of the thermal German SUV, the fiscal power reaches 19 HP, against 8 HP for its American counterpart. Thus, in terms of regional tax, we reach 1044.05 euros for the BMW compared to 439.60 euros for the Tesla. A clear difference of 604.45 euros!
By adding the ecological penalty, the fixed tax, and the transport fee, the BMW X1 will thus pay 24,847.76 euros for the registration certificate, compared to 453.36 euros for the Tesla Model Y.
In 2024, approximately 30,000 cars with over 300 horsepower were registered in France, representing an immediate shortfall exceeding 18 million euros… excluding ecological penalties. Including those, the annual shortfall rises to nearly 400 million euros.
Next comes the enormous tax hole related to fuel taxation, of which 60% of the pump price consists of tax. This represents, in 2023, approximately 41 billion euros collected!
If we return to our BMW X1 35i owner, with a real consumption of 8.5 liters per 100 km and 15,000 km traveled, he would contribute 1244 euros in fuel taxes. Meanwhile, the Tesla Model Y Long Range, with a generous consumption of 18 kWh/100 km, would contribute around 100 euros in VAT on electricity.
Thus, with 300,000 electric cars on the road in France, a number that will only rise from now on, the annual shortfall for the state will thus be an additional 343 million euros. That’s money that won’t go to essential services like health, education, pensions, unemployment, or security.
On top of that, we can add the TVS on company cars (108 million euros in 2023), which now have the obligation to switch to electric to green the vehicle fleet.
France will need to (very) quickly reassess the relevance of its taxation on electric cars. And perhaps even better regulate the powers of electric cars, which are becoming utterly ridiculous.
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