secto automotive vastuullisuus

Secto publicly promotes sustainable driving

Secto has been a trailblazer in sustainable driving since 2010. Throughout these years, we have actively sought to influence public opinion and societal decision-making to promote sustainable driving. We have become a thought leader in low-emission driving, regularly providing expert opinions and statements to various media outlets. We have covered topics ranging from the cost of electric vehicles to the importance of sustainable driving in achieving climate goals and debunking myths of EV adaptability in a Nordic climate.

We have also taken a stand on crucial issues concerning sustainable driving. In 2023, for example, we participated in discussions regarding the Finnish government’s proposed removal of reduced taxation for low-emission company cars starting in 2025. Our position garnered significant attention, with national media outlets such as Kauppalehti, Iltalehti, and Talouselämä interviewing Secto’s former CEO, current Chairman of the Board, Matias Henkola, for their articles. The potential tax change was significant for Finland’s climate objectives. We continued to raise awareness until the government made its decision on April 16, 2024, which ultimately resulted in a positive outcome.

The tax change would make it harder to achieve Finland’s climate goals

According to calculations by Finland’s Ministry of Finance, maintaining the current practice would result in annual tax losses of €59 million for the state. This publicised calculation was based on the assumption that an employee’s car benefit is added to their salary, and that choosing a low-emission or emission-free car would thus reduce the employee’s taxable income.

However, based on a study we commissioned from research firm Value Clinic, this assumption is incorrect. The study indicated that nearly 80% of car benefit recipients operate under a total salary model, where the car benefit is part of the total salary and does not affect the employee’s taxable income. Thus, the savings from removing the reduced taxation would be only a fraction of the Ministry of Finance’s estimated figure.

We also conducted a survey among our own customers on the effects of removing the reduced taxation. This survey revealed that the majority of company car drivers with low-emission or fossil-free cars would give up their cars if the reduced taxation were removed. 44% of survey respondents said they would choose a combustion engine car as their company car if the reduced tax value was removed. And 23% stated they would revert to using their own privately owned car. Only 33% of respondents would continue using a fully electric or hybrid company car or stated that the tax value change would not affect them.

“The survey results indicate that changing the taxation calculation would have lead to a decrease in the share of electric cars or, at the very least, a significant slowdown in the market share growth. This would hinder overall emission reduction in transportation and make it more challenging to achieve Finland’s climate goals,” said Secto’s Chairman of the Board, Matias Henkola.

Company cars play an important role in the growth of electric vehicles. Of all new cars registered in Finland year 2023, 34% have been fully electric. In contrast, over 70% of new leasing cars are fully or partially electric. The Finnish Automobile Association estimates that tax incentives will increase the number of electric cars in the fleet by over 20,000 between 2021 and 2025.

The average lifespan of company cars is about three years, after which they enter the consumer market as used cars. Approximately one in five cars on our roads is either a former or current company car. “Reduced taxation promotes low-emission driving, especially in the used car market. Retired company cars also offer private car users the opportunity to switch to a well-maintained low-emission or emission-free used car at a reasonable price,” said Henkola.

The tax incentive for fully electric company cars continues

The strong public defense of tax benefits for electric cars has paid off. Despite Finland’s current need for significant spending cuts and tax increases, the government decided in the preparation of the state budget on April 16, 2024, to extend the tax incentive for fully electric company cars from 2026 to 2029. The government’s policy is good news for reducing overall transportation emissions and achieving Finland’s climate goals, which benefits our customers and the entire market.

Heikki Kovalainen ja Matias Henkola

Influencing public opinion

In December 2022, we established our development department, Secto Automotive Labs, with the main goal to find fossil-free solutions to driving and communicate the need for sustainable driving in a positive and engaging way. The collaboration between Secto Automotive Labs and the WRC organisation plays a crucial role in influencing the opinions of a large audience interested in motorsports toward sustainable driving. We are the main partner of the Finnish WRC rally, and highlight themes related to automotive climate goals in various ways during Finland’s premier motorsport event, Secto Rally Finland. In 2023, the first Secto Rally Sustainability Forum was organised alongside the rally event.

Additionally, in 2023, we delivered several influential speeches both in Finland and at international forums. These speeches showcased opportunities discovered by Secto Automotive Labs to reduce the carbon footprint of driving, including replacing fossil materials in lubricants, car parts, and tyre manufacturing.

We advocate for sustainable driving through our own example. Over the past three years, we have transitioned our employee benefit fleet to low-emission, fully electric, and hybrid cars (with electric cars accounting for 98.59%). Through our own experiences, we have been able to share information and encourage our client companies to undergo similar fleet transformations.