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How to depreciate an electric car in a business: the 2025-2026 tax guide
Mar 4, 2026
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How to depreciate an electric car: the guide to optimizing your business tax situation
Do you manage a fleet of company vehicles and want to reduce your corporate tax bill? Depreciating an electric car is one of the most powerful tax levers at your disposal. In 2025-2026, the deduction limit will reach €30,000 for an electric vehicle (compared to €9,900 for a polluting combustion engine vehicle), the battery can be depreciated separately, and commercial vehicles are 100% deductible with no limit. Here is a step-by-step guide to maximizing your deductions and turning the purchase of an electric vehicle into a tangible accounting advantage.
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Who is affected by the depreciation of an electric vehicle?
This article is intended exclusively for professionals: companies subject to corporate income tax (IS) or income tax under the actual regime (BIC/BNC), fleet managers, accountants, and liberal professions. Individuals are not affected by accounting depreciation (however, they can use the mileage scale, increased by 20% for electric vehicles).
What to distinguish: passenger vehicle vs. commercial vehicle
Before calculating depreciation, you must identify the category of your vehicle. This is the first decision filter, and it radically changes the tax situation.
Criterion | Passenger vehicle (PV) | Commercial vehicle (CV) |
Vehicle registration category | M1 (passenger transport) | N1 (goods transport) |
Depreciation limit | €30,000 (electric) | No ceiling (100% deductible) |
VAT recovery on purchase | No (except taxis, private hire vehicles, driving schools) | Yes (100%) |
VAT recovery on electricity | Yes (100%) | Yes (100%) |
Annual CO₂ tax | Exempt (100% electric) | Exempt |
Extra depreciation | No | 20% (GVW 2.6-3.5 t) |
For a fleet manager, the choice is clear: an electric utility vehicle offers a full tax deduction with no limitations. This is the most favorable scenario in terms of accounting management.
Step 1: Understand depreciation limits
The depreciation of a passenger vehicle is capped according to its CO₂ emission rate. This cap determines the maximum depreciable base that your company can deduct from its taxable income. Here are the current amounts.
CO₂ emission rate (WLTP) | Depreciation limit | Vehicle type |
0 to 19 g/km | $30,000 | Electric, hydrogen |
20 to 49 g/km | €20,300 | Plug-in hybrid |
50 to 160 g/km | €18,300 | Low-pollution combustion engine |
> 160 g/km | €9,900 | High-pollution combustion engine |
Limits applicable to vehicles purchased or leased since January 1, 2021. Commercial vehicles are not subject to these limits.
The difference is considerable: an electric vehicle offers a deduction limit three times higher than that of a polluting combustion engine vehicle. Over the 5-year depreciation period, this difference of €20,100 in depreciable base represents a corporate income tax saving of around €5,000 (at the standard rate of 25%).
Step 2: Calculate the depreciation of your electric vehicle
The straight-line method
The depreciation of an electric vehicle follows the straight-line method: the acquisition cost is spread evenly over the expected useful life. The standard period is 5 years (annual rate of 20%), but it can be reduced to 4 years (rate of 25%) in the case of intensive use (high mileage, difficult conditions).
Concrete example: electric passenger vehicle
Your company purchases an electric car for €45,000 excluding tax. The tax ceiling is €30,000. The accounting depreciation is based on €45,000 (actual value), but only €30,000 is tax deductible. The difference of €15,000 constitutes non-deductible depreciation (NDD), which must be added back to the taxable income.
Year | Accounting depreciation | Deductible depreciation | Reinstatement (NDA) | Corporate income tax savings (25%) |
Year 1 | €9,000 | €6,000 | €3,000 | €1,500 |
Year 2 | €9,000 | €6,000 | €3,000 | €1,500 |
Year 3 | €9,000 | €6,000 | €3,000 | €1,500 |
Year 4 | €9,000 | €6,000 | €3,000 | €1,500 |
Year 5 | €9,000 | €6,000 | €3,000 | €1,500 |
Total | €45,000 | €30,000 | €15,000 | €7,500 |
The same combustion engine vehicle emitting more than 130 g of CO₂/km would be capped at €9,900, representing an annual deduction of only €1,980 and total income tax savings of €2,475. The difference in favor of electric vehicles is €5,025 in tax savings.
Example: electric utility vehicle
Your company purchases an electric utility vehicle for €35,000 excluding tax. No cap applies. The annual depreciation is €7,000 over 5 years, fully deductible from taxable income. The corporate tax savings amount to €8,750 over the period. And if the gross vehicle weight rating exceeds 2.6 tons, an additional 20% depreciation is added: i.e., an additional deduction of €7,000 (20% × €35,000).
Step 3: Depreciate the battery separately (the little-known lever)
This is a tax loophole that all specialist accountants are aware of: if the battery is invoiced separately when the vehicle is purchased, it can be recorded separately as an asset and depreciated outside the limit applicable to passenger vehicles.
How it works in practice
Let's imagine the purchase of an electric vehicle for €40,000 excluding VAT, of which €12,000 is for the battery, clearly identified on the invoice. The calculation of the deduction changes radically. The price of the vehicle excluding the battery is €28,000, which is below the €30,000 limit: it is therefore fully deductible. The €12,000 battery is depreciated separately, with no ceiling. The total deductible base is therefore €40,000, compared to €30,000 without separate billing for the battery. The additional tax saving is €2,500 in corporate income tax over 5 years (€10,000 × 25%).
Conditions to be met
To benefit from separate depreciation of the battery, the purchase invoice must clearly state the cost of the battery separately. Always ask your dealer for this breakdown when purchasing. The battery must then be recorded as a fully depreciable asset in your accounts. The depreciation period for the battery may be the same as that for the vehicle (5 years) or longer (up to 8 years) depending on its actual lifespan.
Important: since 2023, most manufacturers have included the battery in the overall price. Separate billing is still possible on request for certain models. If the battery is replaced during the vehicle's lifetime, the cost is depreciable separately in all cases.
Step 4: Accumulate other tax benefits
Depreciation is only part of the equation. Companies that invest in electric vehicles benefit from several cumulative tax advantages that significantly improve the total cost of ownership.
Annual tax exemption
100% electric vehicles are completely exempt from the two taxes that replaced the TVS in 2023: the annual CO₂ emissions tax and the annual air pollutant emissions tax. For a fleet of 10 vehicles, this exemption can represent several thousand euros per year. From July 1, 2026, electric vehicles will also benefit from a 600 kg reduction in the weight tax (malus masse).
Recovery of VAT on charging electricity
The company recovers 100% of the VAT on the electricity used to recharge its vehicles, whether at charging stations installed on its premises or at Electra fast-charging stations, provided that the invoice is made out in the company's name. In comparison, VAT on diesel fuel is only 80% recoverable for passenger cars, and VAT on gasoline has also been 80% recoverable since 2022.
Reduced benefit in kind for employees
When an electric company car is made available to an employee for professional and personal use, the benefit in kind is subject to a 50% reduction (capped at €1,800 per year), valid until December 31, 2027. If the vehicle has an eco-score issued by ADEME, the reduction rises to 70% (capped at €4,582). The provision of a charging station by the employer does not constitute an additional benefit in kind. For the employee, it is an attractive remuneration argument; for the company, it is an optimization of the overall cost of remuneration.
Vehicle registration and penalties
Electric vehicles were exempt from regional vehicle registration tax until April 30, 2025. Since May 1, 2025, each region has been able to decide whether or not to maintain this exemption. As for the environmental penalty, it simply does not apply to zero-emission vehicles. The weight penalty, whose threshold will be lowered to 1,500 kg in 2026, also does not apply to 100% electric vehicles.
Step 5: Leasing (LOA and LLD)
If you do not wish to register the vehicle as a company asset, long-term leasing (LLD) or leasing with purchase option (LOA) allow you to deduct the monthly lease payments from your operating expenses. The deductibility limit applies in the same way: for an electric passenger vehicle, the portion of the lease corresponding to a purchase price exceeding €30,000 is not deductible. With an Electra+ Boost subscription at $9.99/month, charging costs while traveling remain fully deductible as operating expenses.
Contract-related costs (maintenance, insurance included in the monthly payment) are also deductible when they are necessary for professional activities.
Summary: the accountant's checklist
Here are the steps to take to optimize the depreciation of your electric fleet.
Action | Tax impact |
Check the passenger car or commercial vehicle category | Determines the ceiling (€30,000 or unlimited) |
Request separate battery billing | Increases the depreciable base (excluding ceiling) |
Choose the depreciation period (4 or 5 years) | 4 years = faster deduction (25% rate) |
Bill the recharge in the company's name | Allows 100% VAT recovery |
Check the GVW for VU over-amortization | 20% additional deduction (GVW ≥ 2.6 t) |
Calculate the benefit in kind for employees | 50% allowance (up to €1,800/year in savings) |
Check regional tax exemption | Variable depending on the region since May 2025 |
Frequently asked questions about electric vehicle depreciation
What is the depreciable amount for an electric vehicle in 2025-2026?
The tax deduction limit is €30,000 for passenger vehicles emitting less than 20 g of CO₂/km. For commercial vehicles, there is no limit: 100% of the purchase price is deductible.
What is the recommended depreciation period?
The standard period is 5 years (20% per year). It can be reduced to 4 years in the case of intensive use. The battery can be depreciated over 5 to 8 years if it is recorded separately as an asset.
Can the battery still be depreciated separately?
Yes, provided that the purchase invoice shows the price of the battery separately. Since 2023, the battery has generally been included in the overall price, but separate invoicing is still possible on request. If the battery is replaced during the vehicle's lifetime, the cost is still depreciable separately.
Can depreciation be combined with the mileage scale?
No. Depreciation applies to vehicles registered as company assets (actual costs). The mileage scale is an alternative for professionals who use their personal vehicles. For electric vehicles, the scale is increased by 20%. Your accountant can determine the most advantageous formula based on your annual mileage and the purchase price of the vehicle.
What are the specific tax benefits of charging?
VAT on charging electricity is 100% recoverable for professional use, whether charging takes place at a company charging station or at an Electra fast charging station. Charging invoices are operating expenses that are fully deductible from taxable income. Electra's detailed rates allow you to accurately track costs for your accounting purposes.
Written by Nicolas, Electra mobility expert
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