What exactly happens when you plug your electric vehicle into a public charging station — are you buying electricity, or purchasing a service? This deceptively simple question sat at the heart of a dispute the Court of Justice of the European Union (the "CJEU") resolved in its judgment of 20 April 2023 in Case C-282/22. 

At stake was how the installation and operation of EV charging points should be classified under Directive 2006/112: a supply of goods, or a supply of services? The Court's answer carries significant implications, and it's worth taking a closer look at what else the CJEU clarified along the way.

Does the Alternative Fuels Directive Settle the Question?

The CJEU held that, on the one hand, the reference to “electric vehicle charging services” in Article 4(8) of Directive 2014/94 does not determine whether the transaction at issue in the main proceedings should be classified as a “supply of goods” or a “supply of services” within the meaning of Directive 2006/112. Indeed, pursuant to Article 1 of Directive 2014/94, the purpose of that directive is to lay down minimum requirements for the deployment of alternative fuels infrastructure, including electric vehicle charging points. It therefore does not seek to establish any rules on the treatment of the supply of alternative fuels for VAT purposes.

The General Principle: Composite Supplies and the "Minimum Level of Services”

On the other hand, since the supply of goods always involves a minimum level of services, when assessing the proportion attributable to the supply of services in a composite supply or transaction that also includes the supply of those goods, only services that are not inevitably linked to the supply of goods may be taken into account.

Breaking Down the Composite Transaction

In this regard, first, a transaction consisting of the supply of electricity to the battery of an electric vehicle constitutes a supply of goods, since that transaction gives the user of the charging point the right to use electricity (which, under Article 15(1) of Directive 2006/112, is treated as tangible property) for the operation of their vehicle.

Second, such supply of electricity to the battery of an electric vehicle requires appropriate charging equipment, which may include a charger that must be connected to the vehicle’s operating system. Therefore, granting access to that equipment constitutes a minimum level of services necessarily linked to the supply of electricity and, accordingly, cannot be taken into account when assessing the service component of the overall composite transaction that includes that supply of electricity.

Third, any technical assistance that may be necessary for the relevant users is not an end in itself but rather a means of obtaining, under the best possible conditions, the electricity needed for the electric vehicle. It is therefore an ancillary service in relation to the supply of electricity.

The same applies to granting access to apps that allow the relevant user to reserve a charging connector, view transaction history and purchase credits to pay for charging. In fact, such services provide the user with certain additional practical capabilities, the sole purpose of which is to improve the supply of electricity for charging their vehicle and to provide an overview of past transactions.

Electricity as the Predominant Element

It follows that, in principle, the supply of electricity is the characteristic and predominant element of the single composite supply that was the subject of the referring court’s request for a preliminary ruling to the Court of Justice.

Does the Pricing Model Change the Analysis?

That conclusion is not undermined by the fact, noted by that court, that the amount payable for charging an electric vehicle may take into account not only the quantity of electricity supplied but also a fee for parking during the charging period. Specifically, this simply means that the unit price of the goods supplied, namely the electricity, is made up not only of the cost of the goods themselves but also of the time during which the equipment is made available to the relevant users.

Nor, in the Court’s view, is that conclusion called into question where the relevant operator calculates the price solely based on charging duration. Indeed, since the quantity of electricity supplied depends on the power transmitted at the time of supply, such a calculation also reflects the unit price of that electricity.

Similarly, the mere fact that the unit price of fast charging using direct current is slightly higher than that of slow charging using alternating current is not sufficient to establish, from the perspective of the relevant user, that the speed and efficiency of the charging are characteristic and predominant elements of the transaction concerned.

The CJEU's Conclusion: A Single Supply of Goods

Therefore, the Court again concluded that a single composite supply consisting of: the provision of electric vehicle charging equipment (including the connection of the charger to the vehicle’s operating system), the supply of electricity suitably adapted to electric vehicle batteries, the necessary technical assistance to the relevant users, and the provision of an app through which the relevant users can reserve a charging connector, view their payment history, purchase credits stored in a digital wallet and use them to pay for charging, constitutes a “supply of goods” within the meaning of Article 14(1) of that Directive.