"Green" Vehicles Will Be Cheaper Next Month

Includes in the list of "carros verdes" (green vehicles) are electric cars and hydrids.

The decision of which vehicles will included in the list of the tax exempt will be up to the Ministerio de Ambiente, Energía y Telecomunicación (MINAET).

The government agency will have the responsibility to define which vehicles are "green" enough to take advantage of the tax exemption.

"The regulations will establish the categories that fall within the definition of clean technology and the procedure to take advantage of the benefit. We the regulations could be ready fast as we have already been working on the issue " said Julio Matamoros, vice-ministro de MINAET.

Currently only a select number of vehicles benefit from a tax reduction of 15% and limited to an engine of less than 2000 cc.

One of the vehicles termed "green" is the Toyota Prius which with the 15% tax break still costs us$41.000 in Costa Rica.

Purdy Motors is the sole importer of the Prius and would not comment on the new price of the vehicle, saying only that they are in the process of calculating that.

Luis Mastroeni of Purdy Motors told La Repubblica that one thing is for sure, there will be a price reduction on the vehicle.

Another company that will benefit from the tax break is Franz Amrhein & Co. S.A, the exclisve Honday dealer that sells the hydbrid Honda Insight. Francisco Castro, marketing manager for FACO said that now, with the elimination of the ISC, it makes sense importing the vehicle. The Insight sells in Costa Rica for us$16.000.

The tax exemption is included in one of the articles of the new Ley de Tránsito and will go into effect next month with the other reforms to the traffic law that went into effect on March 1, 2010.

Vehicles not classified as "green" now pay an import tax of 39%. As of 2006, the tax on "green" vehicles is 15%, but beginning next month, it will be 0%.


What is a "green" vehicle?

A green vehicle is one that is significantly less harmful to the environment than comparable conventional vehicles. Green vehicles include vehicles types that function fully or partly on alternative energy sources other than fossil fuel. Another option is the use of alternative fuel composition in conventional fossil fuel-based vehicles, making them function partially on renewable energy sources.
Examples of vehicles with reduced petroleum consumption include electric cars and fuel cell-powered hydrogen cars.

Electric cars are typically more efficient than fuel cell-powered vehicles on a wheel-to-wheel basis. For this reason, battery powered vehicles are gaining popularity. They have better fuel economy than conventional vehicles but are hampered by range or distance from a charging unit. The electric car batteries are their main cost. They provide a 55% to 99.9% improvement in CO2 emissions compared to an ICE (gasoline, diesel) vehicle, depending on the source of electricity.

Hybrid cars may be partly fossil fueled and partly electric or hydrogen-powered. They are more expensive to purchase but cost redemption is achieved in a period of about 5 years due to better fuel economy.

The benefits of green vehicle use are reduced vehicle emissions that contribute to the increasing concentration of gases linked to climate change. Vehicle pollutants have been linked to human ill health including the incidence of respiratory and cardiopulmonary disease and lung cancer.