TVS for Electric Cars: The Total Exemption That Transforms Your Corporate Taxation

In France, electric cars benefit from a permanent and total exemption from TVS (Company Vehicle Tax), allowing businesses to save between €2,500 and €5,000 per year and per vehicle. This tax measure, confirmed for 2025 and beyond, makes the electrification of corporate fleets particularly attractive compared to the tightening of tax scales for thermal vehicles.

Since 2023, TVS has been replaced by two separate taxes: the annual tax on CO2 emissions and the annual tax on atmospheric pollutant emissions. While hybrid vehicles lose their exemption as of January 1, 2025, let's explore why electric cars remain the optimal tax choice for your company.

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What is TVS and Why Are Electric Cars Totally Exempt?

TVS in 2025: A Heavy Tax Burden for Businesses

The Company Vehicle Tax applies to all passenger cars (M1 category) used by businesses in France, as well as N1 vehicles derived from passenger cars and vehicles on lease or rental for more than 30 consecutive days. This annual tax, payable in January 2026 for the year 2025, consists of two cumulative elements based on CO2 emissions and atmospheric pollutants.

For a standard thermal vehicle emitting 130 g/km of CO2, the TVS amounts to approximately €553 per year for the CO2 component, plus €100 (Euro 5/6 vehicles) or €500 (other standards) for the pollutant component. The calculation follows a progressive scale by brackets that increases each year, strongly encouraging the transition to electric vehicles.

Certain specific cases benefit from total exemption: rentals of less than 30 consecutive days, taxis and VTCs used exclusively for professional purposes, driving schools, PMR vehicles, and individual businesses without conditions. These exemptions aim to avoid penalizing certain specific professional activities.

Permanent Exemption for 100% Electric Vehicles and the End of Hybrid Advantages

Electric vehicles are completely and permanently exempt from both components of the TVS. This measure, enshrined in the Code of Taxation on Goods and Services, applies without time limit. The tax administration confirms that all vehicles "whose energy source is exclusively electricity, hydrogen, or a combination of both" remain permanently exempt, regardless of their purchase price or power.

Since January 1, 2025, plug-in hybrid vehicles have lost all their advantages. The total exemption for models emitting less than 60 g/km WLTP (or 50 g/km NEDC) is abolished, as is the temporary 3-year exemption for hybrids between 51 and 120 g/km WLTP. Diesel hybrids have been completely excluded from any scheme since 2018. This removal represents an additional annual cost of €141 to €400 for businesses, reinforcing the advantage of 100% electric vehicles. Only hybrid vehicles registered before 2025 retain their temporary exemption until its initial term.

How to Calculate and Declare TVS in 2025

Formula and Official Scales

Annual TVS = (number of days of ownership / 365) × (CO2 rate + pollutant rate)

For electric cars: TVS = €0 (total exemption as 0 g/km CO2)

The WLTP scale (vehicles registered after March 2020) follows a progressive calculation by brackets. For a vehicle emitting 130 g/km: €553 in CO2 tax + €100 (Euro 5/6) or €500 (other standards) in pollutant tax. The NEDC scale (vehicles before March 2020) has thresholds about 20% lower. Businesses must be vigilant about the applicable reference according to the registration date to avoid any calculation errors.

Declaring the Exemption for Your Electric Vehicles

The declaration is made using form 3310-A-SD for businesses under the normal regime, to be submitted before January 25, 2026, for the year 2025. For electric vehicles: indicate "0 g/km" in the CO2 emissions box and check "electric motorization." The exemption applies automatically. Businesses under the simplified regime use form 3517-S-SD with the same declarative procedures.

Keep for at least 3 years: registration document mentioning electric motorization, purchase invoice or lease contract, any transfer documents, and contracts proving durations of less than 30 days for short-term rentals. In case of a tax audit, these documents prove the legitimacy of the applied exemption.

TVS Savings According to Your Fleet

Category	CO2 Emissions	Annual TVS	Savings with Electric
City car (gasoline)	110-120 g/km	€450-600	€450-600/year
Sedan (diesel)	120-140 g/km	€550-850	€550-850/year
Compact SUV	140-160 g/km	€850-1,300	€850-1,300/year
Premium SUV	180-220 g/km	€1,800-3,500	€1,800-3,500/year
Luxury sedan	200-250 g/km	€2,500-5,000	€2,500-5,000/year

For a fleet of 10 mixed vehicles, a full transition to electric generates TVS savings of €8,000 to €12,000 per year. Over 4 years, the cumulative savings reach €32,000 to €48,000 on TVS alone. E85 vehicles retain a 40% reduction but remain taxed, unlike the total exemption for electric vehicles. This difference increases with the progressive tightening of scales until 2027.

Additional Tax Benefits of Electric Vehicles

Beyond the TVS exemption, businesses benefit from full VAT recovery on electricity consumed for charging, compared to 80% for diesel and 0% for gasoline. For 3,000 kWh annually (15,000 km), this represents an additional €200 recoverable.

The deductible depreciation ceiling is €30,000 for electric vehicles compared to €18,300 for thermal vehicles emitting more than 60 g/km. This difference of €11,700 generates corporate tax savings of €2,925 at the 25% rate.

In most regions, electric vehicles benefit from total or partial exemption from the regional tax on registration documents. In Île-de-France, the savings reach €461 for a 10-horsepower sedan. The ecological bonus, transformed into a CEE scheme since July 2025, offers €3,100 to €4,240 to individuals (businesses excluded since 2024).

Optimization Strategies for Your Corporate Fleet

A gradual transition maximizes return on investment. Start by replacing the most heavily taxed vehicles: thermal SUVs and premium sedans generate the largest TVS savings. Replacing a Mercedes GLC with an EQA electric saves €1,500 to €2,500 in annual TVS immediately.

Prioritize vehicles emitting more than 160 g/km of CO2 (TVS savings over €1,300/year) and Euro 4 or older diesel vehicles that combine high TVS and €500 pollutant tax. Executive vehicles, often premium sedans, generate up to €5,000 in annual savings. Establish a 3-year renewal schedule to smooth out investment while quickly maximizing tax savings.

Operational leasing (LLD) smooths out investment without tying up cash flow. Monthly payments include the absence of TVS, mechanically reducing installments by €100 to €200 depending on the models. 36 to 48-month contracts allow you to benefit from the latest technological advancements.

Installing fast charging stations at your business benefits from the ADVENIR program with a 25% tax credit (capped at €500/point). On-site charging costs €0.15/kWh compared to €0.49/kWh at standard public stations. Plan for one charger per 5 vehicles with smart management. The €15,000 investment for 10 points pays for itself in less than 3 years thanks to savings on fuel and TVS.

Switch to Electric and Save Now

The total and permanent TVS exemption transforms the economic equation of your corporate fleet. With average savings of €600 to €2,500 per vehicle per year, the return on investment is rapid and measurable.

2025 marks a turning point with the end of the exemption for rechargeable hybrids. Businesses that delay switching to 100% electric face increasingly heavy vehicle taxation with scales progressing until 2027.

At Electra, we support your transition with over 400 ultra-fast charging stations spread across France. Our professional charging network guarantees the continuity of your business trips with transparent rates and centralized billing.