Economy 21 August 2024, 10:46am

Green licence plate registrations drop in Hungary for the 2nd time this year

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The number of vehicles registered with green licence plates in Hungary dropped 11% month on month in July 2024, according to the latest data published by the Ministry of Interior. This marks the second m/m contraction this year. There was growth only in the registration of hybrid vehicles (HEVs) which may have to do with a change in green licence plate rules to come into effect on 1 September.

Monthly data

Turning green

In July 2024, a total of 2,571 vehicles were registered with green licence plates in Hungary, 10.8% fewer than in June but nearly 52% more than in the same month of 2023. This marks the second m/m drop this year after April (-13%).

The following graph shows the monthly tally of green plate registrations since January 2020 in the three main categories: Battery Electric Vehicle (BEV), Hybrid Electric Vehicle (HEV) and Plug-in Hybrid Electric Vehicle (PHEV).

All electric

March saw the registration of 2,108 battery electric vehicles (BEVs) in Hungary, an all time high. June recorded the second-highest number (2,072), but July brought a 16.8% decline to 1,724 registrations in this category.

The m/m drop for passenger cars was "only" 8.6%, while nearly 64% fewer trucks got green licence plates last month (111) than in June (307).

Hybrid electric vehicles (HEVs)

HEVs are the second most popular type among electric vehicles in Hungary, but with far fewer of them getting registered than of BEVs. February was the best month both this year and as far as we have data (January 2020), with 744 HEVs getting green licence plates, followed by a practically continuous erosion to 675 in June. July brought a turnaround with a 7.1% m/m growth to 723 registrations, but this might either be a fluke (less likely) or just a temporary uptick (more likely) before the rules of green licence plate registrations change on 1 September. If it's the latter, we should see further growth in this category in August.

Extended-range, externally chargeable hybrid electric vehicles (5N) and externally chargeable hybrid electric vehicles (plug-in hybrid vehicles, 5P) will no longer be able to receive green number plates when first registered in Hungary from 1 September 2024. In addition, previously issued green number plates for these vehicles will have to be replaced by 30 November 2026 at the latest, beyond which date they must have regular licence plates.

Environmentally friendly vehicles (5E, 5N, 5P, 5Z) uniformly benefit from the following discounts: (i) exemption from vehicle tax, (ii) exemption from company car tax, (iii) exemption from transfer tax and (iv) zero registration tax.

With those in the 5N and 5P categories no longer deemed environmentally friendly from 1 September, they should be subjected to the vehicle tax, although the regulation does not define precisely what environmentally friendly means. If they were to further specify the definition in the vehicle tax law, vehicles classified as 5N and 5P will most likely be subjected to the company car tax too. These vehicles are also most likely to be subjected to the transfer tax and the registration tax (estimated to be HUF 76,000).

Plug-in electric vehicles (PHEVs)

Registrations in this category are erratic and the trend is slightly descending. A total of 102 PHEVs got green number plates in July, down 8.1% from 111 in June. We've seen much higher figures in practically all but a couple of months since 2020.

Green programme of the state continues

There is currently an e-vehicle subsidy programme in place in Hungary with a HUF 30 billion budget. The scheme offers a contribution of up to HUF 4 million per vehicle, depending on the battery capacity, and up to HUF 64 million per company, depending on the number of employees, for the purchase of a pure electric car, van or minibus.

The Energy Ministry reported earlier this month that nearly 3,500 companies have applied for the subsidy, with a total of HUF 16.3 billion in funding requested. Commercial vehicles account for around a third of the total number of vehicles in the programme, with companies having applied for state support for the purchase of more than 3,200 cars to date.

How many vehicles with green licence plates we have?

The answer to that question is: 104,411 to be exact. The end-July figure marks a 2.5% month-on-month growth and a year-on-year increase of 37%. The number of green plates grew 6-fold since January 2020.

The geographical distribution shows that while at the beginning almost the same share of green licence plates were registered in Budapest (48.9%) than in the rest of the country (51.1%), the ratio has become much healthier by now, with 61.2% registered in the countryside and 38.8% in the capital.

As for the specific categories, the number of environmentally friendly motorcycles grew from 66 in January 2020 to 603 by end-July. Of BEVs, including passenger cars, trucks, buses, and tractors, there were 60,933 registered in Hungary, a 44.2% annual growth and 7.9 times as many as in January 2020.

The number of HEVs totalled 30.369, up 35.1% yr/yr, while the number of PHEVs went up 13.2% to 12,460. Although the figures shown in graph below represent a wider range of vehicles (as the note in the chart says), passenger cars comprised virtually 100% of HEVs and PHEVs and 93% of BEVs in July.

How popular are the different kind of EVs in Hungary?

Green licence plate registrations took off in the first half of 2022 compared to the H1 2021, then the growth petered out in January-July last year only to soar again in the first seven months of this year. The same pattern applies to BEVs, while HEVs showed a more modest but steady growth, and the popularity of PHEVs actually subsided.

The changes in the share of the three types of EVs in total new registrations reflect the above numbers, of course, showing a temporary faltering but undeniable increase in the popularity of BEVs, a modestly eroding uptake of HEVs and a clearly dissipating love for HEVs.