Car Sales Generated €5.863 Billion for the Treasury in 2024

When the strategic importance of the automobile industry is questioned, the figures speak for themselves: car sales in 2024 alone generated tax revenues of €5.863 billion for the state. This figure only considers the VAT from car sales and the registration tax, the taxes linked to sales.

Other vehicle-related taxes include those associated with fuel consumption, the circulation tax collected by municipalities, or fees related to insurance and ownership changes, not to mention those from fines or generated by brands and dealerships in the sector. These figures are included in the annual report prepared by the national manufacturers' association, Anfac.

While the data for the past year is yet to be published – it is usually released mid-year – the 2023 figure amounted to a substantial €39.514 billion, representing 14.5% of the total revenue collected that year, which closed with a record figure of €271.935 billion. However, this statement should be taken with caution, according to César Martínez Sánchez, a professor of Tax Law at the Autonomous University of Madrid, as "administrations should not be mixed" and not all of that amount is available for the General State Budgets.

Although the final figure for 2024 has not yet been published, it is known to surpass its predecessor, as by November the sum had reached €273.993 billion, even considering the effects of the DANA that affected the Valencian coast.

Thus, the total revenue from vehicle sales in 2024 is broken down into the Registration Tax (IEDMT), which brought €777.7 million to the public treasury, an increase of 7.4% compared to the previous year. The other – and larger – part of the revenue is related to value-added tax, amounting to €5.085 billion, 7.1% more than a year ago, according to data published this week by the Tax Agency.

Several interesting insights emerge from analyzing the Treasury's figures. The first is that "the upward trend in vehicle prices is confirmed," closing 2024 with an average of €23,002 excluding the Registration Tax. Moreover, since 2020, the taxable base has diverged from the vehicle curve.

The IEDMT taxes vehicles based on their CO2 emissions, benefiting those with less than 120 grams of greenhouse gas per kilometer, as they are exempt from paying it. Of the million units registered last year, 474,993 did not have to pay. The next bracket, between 120 and 160 grams, must pay 4.75% on the mainland – one percentage point less in the Canary Islands – and 499,129 cars had to face this tax. Next, those emitting between 160 and 200 grams had to pay 9.75% (55,113 cars), and finally, those emitting more than 200 grams of CO2 must pay a rate of 14.75% (23,665 cars).

On average, the monthly registration tax fee was €739 per car, four more than a year ago. The month with the lowest fee was June, at €685, and the highest was September, at €789.

According to Treasury figures, December was the month with the most registrations in our country, with an increase of 25.3% compared to the previous year. This also corresponds to an advance in registrations by manufacturers, who were incentivized to sell vehicles before 2025, as this year, according to current regulations, their emissions begin to count towards the potentially billion-euro fines they face for exceeding the limits imposed by Brussels.

As of today, the European Commission has met with 22 representatives of the European automotive industry and is expected to review the CO2 targets for 2025, potentially even cancelling them.

Although the total revenue from the automobile industry in Spain is not entirely allocated to the general budgets, its magnitude is such that it puts into perspective what could be allocated. For example, the Moves III Plan, which concluded on December 31, 2024, without a continuation – the government claims they are working on a successor that is faster in fund allocation, as previous ones could take more than a year – had €1.6 billion in its funds, aimed at promoting electric mobility and scrapping vehicles over 10 years old. With the taxes collected from car sales in 2024 alone, 3.6 Moves III could be financed.

According to the distributors' association Ganvam, the priority is not to promote electric cars, but to decarbonize the vehicle fleet, something that can be achieved more quickly by removing old cars from circulation. The average age of the Spanish fleet already exceeds 14 years, and according to the organization, an incentive plan for purchasing vehicles up to 5 years old could be implemented. This would act similarly to the Reinicia plan, which helped those affected by the DANA, and for every €500 million invested in it, 165,000 polluting cars could be removed from the streets.