Retrofit memo

Mariusz Dankowski

“Retrofit” is a popular term for converting a used combustion car into an electric one, through a complete modification of the drive. The first and so far the only country in which retrofit has been legally allowed is France, based on the law of 13 March 2020,

The regulations open possibility to obtain homologation of converted cars modified in bulk, without obtaining the authorization of the car manufacturer, under condition of meeting the necessary technical and safety requirements.

In March 2021, after one year of introduction of this law, French government agency ADEME /Agence de la Transition Ecologique/ presented an analytic study prepared by the team of engineers, lawyers, retrofit practitioners, specialists in electromobility and homologation. The report presents the business model of this activity, its economic, social and environmental benefits, and postulates for state and municipal agencies to address the need to support this sector.

It is stressed that such vehicle renovation, equally to electric new car production, is a good response to the expected new standards of pollutant and CO2 emissions. However, the challenge for retrofit companies is to stay price competitive and deliver at low cost.

ADEME indicates a potential of creating new jobs in this sector, estimated in France between 700 and 6500, depending on the scale of the business. The competence of retrofit particularly strengthens and pushes modernization of independent workshops exposed in near future to reduce activity due to the decrease of repairs and maintenance services related to car park shift to electric vehicles.

Retrofit is not perceived as competitor to new car manufacturing but represents a complementary offer, limited in time because depending on the supply of combustion engine cars, the production of which is to be banned after 2035.

The fact that business model of retrofit is both ephemeral and sensitive mobilizes the French to accelerate administrative action to support the sector.

In this context, ADEME calls, in particular, for:

  • reducing the cost of homologation and simplifying it;
  • the introduction of a reduced VAT rate of up to 5.5 % per installation;
  • initiating pan-European homologation, based on a car type approval ;
  • providing a legal framework to secure the participation of the retrofit sector in the inspection and maintenance of converted cars;
  • ensuring the flow of technical information from car manufacturers;
  • giving retrofit a proper place in government investment strategies, especially those providing financial support for electromobility;
  • tax breaks for companies and organizations buying converted vehicles;
  • promoting and supporting the use of retrofit by municipalities and local governments.

On 19 May this year, ADEME published a press release summarizing this whole subject:

It is emphasized that retrofit functional and economic model is particularly attractive in case of utility vehicles, especially buses, what should be interesting to business and municipal fleet owners.

The legal regulations existing since 2020 in France should inspire similar solutions across the continent, to build a ground for the strong and healthy retrofit sector in Europe. To make this law better, new legislations should take into account recent modifications and improvements postulated by French state agencies, as this country has so far a pioneer and valuable experience and practice, worth attention.