The electric car has dropped out of favor in Denmark

https://www.bloomberg.com/news/articles/2017-06-02/denmark-is-killing-tesla-and-other-electric-cars

by bipson • 9 years ago

143 339 9 years ago

awjr6• 9 years ago

Taxing the purchase of a car seems non-sensical to me. It is not, so much, the ownership that is the problem, but the use of the car that creates congestion and health issues.

Tax fuel and bring in road pricing.

insertnickname• 9 years ago

More than half of the price of gas in Denmark is taxes.

Tepix• 9 years ago

Same in Germany, in 2014 it was 59%. In 25 of 28 EU states fuel was even more expensive than in Germany.

TulliusCicero3• 9 years ago

Tax fuel

That accounts for fossil fuel cars but not electric ones.

bring in road pricing

A fine idea except it's logistically difficult to implement tolls everywhere.

marak830• 9 years ago

Well cars have odometers don't they, tax based on that.

awjr6• 9 years ago

I suspect, requiring all cars to have a telematic device is the answer here. Insurance companies are already using these and the behaviour of individuals drastically improves when one is installed.

This has an advantage in enabling provision of a device at country borders etc.

Another option is to develop a cheap Automatic Number Plate Camera and create a network of cameras across our road systems.

Both approaches not only allow road pricing strategies, but also address speeding.

This may be a bit big brother for some but this is pretty much the way I see us heading.

Zekio• 9 years ago

Well electricity is so heavily taxed in Denmark the price for electricity is multiplied multiple times over.

The actual cost like 90% of the price is taxes if I remember correctly.

So taxes for electric cars "Fuel" have already been accounted for.

Edit: grammar is hard

lucaspiller2• 9 years ago

A lot of European countries have vignette stickers (often only for buses/HGVs), which are needed to travel on highways. The sticker attaches to the inside of the windscreen. The only infrastructure/logistics needed is to sell the stickers to fuel stations, and a few signs when entering the country.

https://en.wikipedia.org/wiki/Vignette_(road_tax)

roel_v3• 9 years ago

These taxes are from a time when cars were a status symbol; they're (most would say 'they were', but that I disagree with - nominally, yes, but I'm talking about popular support for the underlying sentiment) not so much a tax to stimulate environmentally responsible behavior as they are a tax to 'punish' ostentatious displays of wealth. It's the same as the 'BPM' tax here in the Netherlands. It's, at its core, a "protestant austerity" thing.

avar7• 9 years ago

If the BPM isn't a tax to stimulate environmentally responsible behavior why is it a direct function of CO^2 emissions, with no tax payable on zero-emission vehicles, no matter how mch they cost or how much of a display of wealth the are?

1. https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/...

notauser2• 9 years ago

Taxing vehicle use is a great idea, but vehicle ownership also has negative externalities which means it is appropriate to tax buying or owning a car including:

- Polution created by making a car.

- Cost of parking, especially in cities:

  - parking takes up space, making it harder to walk between things
  - street parking is untidy / ugly
  - street parking obstructs traffic, bike lanes and bus lanes
  - the need for large parking lots drives up the cost of building, which is passed on to drivers and non-drivers alike

Even in suburban areas having the streets full of parked cars has negative effects like reducing the space available for children to play.

lmm• 9 years ago

- Polution created by making a car.

No different from making any other object - you might as well tax e.g. TVs if that's the rationale.

- Cost of parking, especially in cities:

Agreed, but better solved by disallowing street parking and taxing land ownership. Again, tax the parts that introduce the negative externalities as directly as possible, otherwise you create perverse incentives.

Reason077• 9 years ago

This is actually a significant problem in the UK. You could create a much better environment for pedestrians and cyclists if city streets weren't clogged with parked cars all the time.

Danish streets do seem to be much clearer, even in areas that have similar road conditions and population density to UK cities.

mtzet• 9 years ago

Pollution created by making a car

And yet, the tax is not specifically on the pollution. You could argue that this might be difficult to do in practice, but in any case such a pollution tax ought to also apply to other products like computers and TV's, which it doesn't.

The problem with a flat tax, is that it doesn't discourage anything other than buying a nice car. In general, an expensive car is not worse for the environment (including parking etc), than a cheap car. A large, bulky car might be that, but that's not what we're taxing here.

avar7• 9 years ago

You can't selectively tax certain goods without creating a market failure.

E.g. if the purchase of cars isn't taxed I'll just import €10,000 of audio equipment by buying an old beater, then ripping out and selling the sound system and selling the car for scrap, while making a big profit because I'll be competing with local sellers that have to pay import tax on sound systems.

notauser2• 9 years ago

This happens with cargo vans in the US, which are imported as passenger vans before being converted, to avoid a 25% tarrif on the import of cargo vans.

http://blog.caranddriver.com/feds-watching-fords-run-around-...

However I'd challenge that this is a market failure - this is an example of the failure of a rules-based approach to regulation.

In countries which take a principles-based approach to regulation then the substance of the transation is considered as well as the form.

So this kind of nit-picking to circumnavigate the rules wouldn't have been allowed.

relix3• 9 years ago

Audio equipment is not taxed at 100%.

lucaspiller2• 9 years ago

In Europe there are no import taxes between member states though. I live in Lithuania and it's quite common for people to drive to Poland for larger purchases (e.g. kitchen appliances) where they are a lot cheaper. If you buy as a business you pay 0% VAT in the country of origin.

amelius3• 9 years ago

That's why regulators need to be smarter.

kawsper• 9 years ago

Denmark are taxing fuel and requires you to pay "vægtafgift" (weight-tax, based on how much your vehicle weighs) and "grøn ejerafgift" (green owner tax, how efficient your car is per liter of gasoline) to be allowed to drive on the roads.

kagamine3• 9 years ago

For anyone interested, here is the govt. calculator in English (almost) for cost of import into Norway: https://www.skatteetaten.no/en/person/cars-and-other-vehicle...

izym• 9 years ago

Vægtafgift is not a thing anymore, there is only ejerafgift now.

fulafel• 9 years ago

The main harm from cars are co2 emissions, and electric car emissions are weighted to manufacturing and raw materials. So it makes sense to tax their purchase.

iso-8859-1• 9 years ago

A nuclear-powered truck with a RBMK-type (think Davy Crockett) reactor (with the right economics of scale) might be so cheap to make, it would be more competitive than a gas-powered truck over its entire lifespan. But it wouldn't be environmental. Can't I make the same argument regarding gas/diesel cars?

tinco• 9 years ago

Why would it not be environmental?

awjr6• 9 years ago

Each RTC would be a nuclear disaster ;)

lumberjack• 9 years ago

Disposing of nuclear waste is not trivial.

majewsky• 9 years ago

Would be nice to have this productized and then miniaturized to fit under an engine cover: http://www.lockheedmartin.com/us/products/compact-fusion.htm...

Dylan168072• 9 years ago

The bomb? I can't figure out what joke you're making here. "the same argument" as what argument?

eeZah7Ux5• 9 years ago

RBMK just like Chernobyl.

misja111• 9 years ago

The stats are a bit misleading. Of course the sales for Jan 2017 will be low if it was known beforehand that Q4 2016 would be the last moment that electric cars were not fully taxed. Everyone who was planning to purchase an electric car would make sure to buy it in Q4 2016 and not in Q1 2017.

This doesn't tell much about the future of electric cars sales in Denmark; after a while the sales will recover again and only then we will know if they have dropped comparing to the earlier numbers or not.

NetMonkey• 9 years ago

Not only that - judging from used car websites in Denmark around the time, quite a few people seemed to have bought Teslas with expectation that they could sell them at a higher price after the tax increase. If I remember correctly it was initially rumored that the tax increase would not have been gradual.

foota2• 9 years ago

Right? Plus it looks like there's a seasonal increase towards the end of the year- should probably be compared against ice cars.

SOLAR_FIELDS2• 9 years ago

I can confirm. I work with some Danes, one of whom bought a Tesla under this regime. There was a mad scramble to purchase Teslas before Q1 2017, which also shifts the numbers even more as people who weren't planning to buy before 2017 were incentivized to do so.

zakk2• 9 years ago

I am skeptical that a 180% tax on fuel-powered cars is good policy, however I can see the point given that Denmark is extremely concerned about the environment.

That said, I think that the same bracket on electric cars is a truly draconian measure.

adrianN5• 9 years ago

Cars cause other problems beside pollution (not that electric cars are pollution free). An over reliance on cars leads to sprawl, sprawl reduces quality of life. Accidents costs lives.

CamperBob27• 9 years ago

An over reliance on cars leads to sprawl, sprawl reduces quality of life

It must be so nice to have the wisdom needed to prescribe everyone else's lifestyle.

zakk2• 9 years ago

Is there clear evidence that this reasoning justifies such a ginormous tax rate?

It looks to me a lot about the story that if you run, you'll sweat. If you sweat, you'll take a cold. If you take a cold, you'll sneeze. If you sneeze, you'll catch pneumonia. And if you catch pneumonia you'll die. So don't run.

eeZah7Ux5• 9 years ago

There's a lot of evidence on how bad sprawls are:

https://en.wikipedia.org/wiki/Urban_density

http://www.easterbrook.ca/steve/2011/06/fun-with-urban-trans...

eksemplar• 9 years ago

The 180% is a good way to get people in the direction you want. The danger is that it's a huge income which the state cannot afford to lose. Because the state will still have to buy the roads for electric cars.

I think most western states are struggling with how to transcend from living off income and environmental taxes to living off something else though, as automation and green tech frees us from former burdens.

dogma11389• 9 years ago

High tax rates on cars weren't set because of the environment, it's a relic of post WW2 austerity when cars and other luxury items were excessively taxed and in many places they still are.

orliesaurus• 9 years ago

We need electric self driving busses or similar, capable of moving large amounts of people frequently without the parking and other traffic related stress.

dogma11389• 9 years ago

Electric busses self driving or not would not do you good in places where public transportation does not exist currently.

Busses with drivers electric or not are easy to implement and we have them today, but many places still lack good (or even acceptable) public transportation links for many reasons including lack of investment, high car ownership rates or as far as cities lack of urban planning, especially for older cities that were not had to be rebuilt after WW2.

Driverless busses would not really make a difference for any and many more root causes. They will reduce the cost of operating already existing bus networks with good traversability and optimized bus routes, they would not however magically help you to setup public transport where there has been none, in fact it might be more expensive to go driverless from the get go.

XorNot• 9 years ago

Driverless buses would basically have the benefit that we can replace the driver with a fulltime security guard and have nicer buses.

inopinatus4• 9 years ago

This only holds if you think driverless buses are simply a standard scheduled bus service with no human driver. But I can already imagine on-demand or dynamic bus dispatch/routing that could be an order of magnitude improvement in mass transit service level to some communities.

amelius3• 9 years ago

How about driverless taxi-cabs then? You could call them driverless rentals.

wcummings• 9 years ago

Don't harsh their mellow, HN thinks driverless vehicles are going to "solve" mass transit. As if the driver were the biggest problem.

alacombe5• 9 years ago

You under-estimate the power of public unions. There will never be any driverless public bus, even if it mean that the "driver" has nothing to do.

mrweasel7• 9 years ago

Tesla is a pretty expensive car, so when the buyers no longer got a discount on the purchase of an electric car less people could afford them.

The Electric cars aren't selling because only a few people can afford spending $110.000 car, more than a house in some parts of the country. Even when the subsidy was in place most of the buyers were relatively wealthy people.

You can question the Danish taxation of cars if you want, but what's killing Tesla and others is the high price. The best selling car in Denmark in 2016 was the Peugeot 208 at $20.000. If electric cars are to take of they need to hit the $20.000 - $40.000 price range.

Tesla is a luxury which sold well among the well of segment of the population, when they were given a discount on the taxes, by the government.

ebbv4• 9 years ago

There are a number of EVs available in the $20-40k price range. A majority of them in fact. In the US we have the Nissan Leaf and Chevrolet Bolt. In Europe the two have a number of other options available as well. The Renault Zoe is like a more affordable Leaf. I'm not sure what the VW eGolf clocks in at over there but it's probably in the neighborhood.

So yeah, just because the Model S is a luxury car, don't make the mistake of assuming all other EVs are too.

Here in the US if you can find a used Nissan Leaf you can get a really good deal.

_pmf_2• 9 years ago

I'm not sure what the VW eGolf clocks in at over there

Ca. 35 000 EUR in Germany (which means less in the rest of the world, for whatever reason).

mrweasel7• 9 years ago

The Leaf is $40 - 45.000 in Denmark, so that's within range of most I would think, it's just that you can get bigger/better cars for the price. The Bolt isn't available in Denmark, it's under the Opel brand here and Opel won't sell it in Denmark because they priorities countries with an "ambitious policy".

dagw4• 9 years ago

I'm not sure what the VW eGolf clocks in at over there but it's probably in the neighborhood.

In Sweden the eGolf is about SEK 400k ($45k) compared to about SEK 220k ($25k) for the Zoe.

tovkal• 9 years ago

That's why they are doing the Model 3.

baldfat• 9 years ago

Model 3 is $35,000 before incentives.

https://www.tesla.com/model3

ClassyJacket3• 9 years ago

The Model 3 is nowhere close to an affordable car for your average car buyer e.g. Corolla owners.

It's likely to be about 62,000$ here in Australia before any options or upgrades, so that's with no autopilot and the smallest battery. Still a luxury car, in fact, with some options expensive enough to trigger the Luxury Car Tax, which kicks in at $75,525.

When you can get a brand new Suzuki Swift for 15,000 you really have to ask yourself how much you care about electric.

sveme2• 9 years ago

I just bought a VW Caddy, but was also struggling with the decision as I thought about going electric. However, what I personally need is a minibus form factor to sleep in the back, 500km range to go to the alps and back and preferably at less than 30k Euros. Like many other city dwellers in Europe, I don't need a car in the city, prefer to take my bike or public transport, I only need it for weekend trips and vacations. I guess quite a lot of people in my part of town act similarly, even though we should be the most interested in electric cars, all being eco-minded and such.

mrweasel7• 9 years ago

Personally I ran into the issues that to save on weight many manufacturers compromised on leg room behind the wheel. It's not physically possible for me to drive something like the Renault Zoe.

amelius3• 9 years ago

I'm curious: why not simply rent a van whenever you go on a trip?

ZenoArrow• 9 years ago

"I just bought a VW Caddy, but was also struggling with the decision as I thought about going electric."

If you don't mind doing the work yourself, and don't mind a range lower than 500km a day, you can get something like this for less than 30k Euros. For example:

http://hackaday.com/2017/05/17/solar-powered-camper-is-a-mag...

cobookman2• 9 years ago

Have you looked into a Chevy volt. 53 miles electric, 44mpg on gas (something like 400 mile range with both fuel sources).

Unlike the Prius it only has an electric drive train with a gas generator.

And it's a hatchback with the seats folded you might just be able to sleep.

donquichotte2• 9 years ago

Also, giving tax breaks on luxury cars means shiftig wealth from the poor to the rich.

mseebach2• 9 years ago

Yes, rolling back the tax discount on EVs should remove the last fragment of the fig leaf that those taxes have any environmental purpose whatsoever.

watter2• 9 years ago

This is why I like to remind people of Tesla's true innovation: finding government tax credits and giving consumers a way to spend them on Tesla.

mcv7• 9 years ago

If it's an import tax, it only applies to cars imported from outside the EU. I don't know if Denmark has any car factories, but there are plenty of affordable cars being produced in the EU.

LeifCarrotson2• 9 years ago

The tax on cars is largely for environmental/societal reasons. Pollution is an expensive, damaging externality for society largely caused by cars; the infrastructure for a car culture is VERY expensive to maintain; car-dependent cities are less attractive to live in.

A single-digit sales tax or registration fee does not cover these costs to society caused by car owners. Therefore, these costs must be covered by the general fund: from income, payroll, and business taxes. These all apply equally whether or not you own a car, so if you don't buy a car, you're still paying for the environmental cost of having one but not getting the benefits.

Denmark has done a smart thing by placing high taxes on cars. Reasonable taxation policy helps make this decision more rational. The flat tax usually makes sense because cheap cars are likely to be low-powered sub-compacts, which have a smaller impact, while expensive luxury cars are more likely to be high-powered, heavy, large vehicles.

But EVs (and hybrids, to a lesser extent) break this model. They are expensive, but environmentally friendly. It makes sense to encourage their adoption through tax breaks. That is not a shift of wealth from the poor to the rich, it's an intelligent exception in a model intended to shift costs away from all of society to the source of those costs.

mason2406• 9 years ago

Not possible. The poor pay very little in taxes (the bottom 40% pay less than 5% of income taxes collected), and the rich pay most of them (the top 5% pay 55% of income taxes collected).

Tiktaalik• 9 years ago

Yep. These sort of new vehicle EV incentives are pointless hand outs to car companies and auto dealer associations, funded by the tax dollars of citizens that are often too poor to afford to buy a new car in the first place.

A more effective policy at encouraging the growth of the EV sector would be a road pricing system where non-EV cars pay higher fees.

This sort of policy would have the added bonus of incentivizing people into public transit and active transportation, which is ultimately better for the environment than buying an EV car.

rsync• 9 years ago

"Also, giving tax breaks on luxury cars means shiftig wealth from the poor to the rich."

Not quite ...

If you taxed poor people to subsidize luxury cars (a regressive tax) then you would indeed shift wealth from the "poor" to the "rich".

However, if you tax rebate the "rich" to subsidize luxury cars you are instead shifting less wealth from rich to poor than you used to.

Maybe you should or should not do these things - I'm not going to debate that here - but I think that distinction is important and interesting ...

wott• 9 years ago

Yes, it puzzles me that my government sponsors people who fancy changing their car for an EV up to 10000 € (!) per EV (and considering the prices of EVs, they have to be rather wealthy to afford them even with the sponsoring), while cutting welfare for any stupid reason for people who have no other income (yearly welfare being around 5000-6000€...).

Giving away money worth 2 years of welfare to people who don't need money and just want to dump a car that still perfectly works sounds just crazy to me.

pmarreck2• 9 years ago

So the cost of electric cars tripled (due to a near-200% import tax imposition) and it only dropped sales to 1/3 what they were? The fact that this didn't wipe them out entirely is telling

hammock• 9 years ago

Triple price and 1/3 quantity directly follows the linear demand curves they teach in Economics 101.. not sure what else you were expecting.

mcguire• 9 years ago

The article describes the tax changes as a phase out, from 2016 (presumably late in the year since the changes were made in 2015) to 2020.

The prices did not immediately triple.

chvid• 9 years ago

The prices rose around 20% and only for the more expense ones. Apparently that was enough to stop the sales immediately.

tonmoy• 9 years ago

There's Nissan Leaf

ClassyJacket3• 9 years ago

Unfortunately a garbage car in every sense. Tiny range around half that of a Model 3 - at 172km I can't drive to the airport and back without charing - no supercharging equivalent, ugly, no autopilot or equivalent, tiny, and cheaper than a Tesla Model 3 but not by much.

Oh and it's been withdrawn from sale entirely in Australia.

gwbas1c• 9 years ago

Which in March 2018 will go 200 miles on a single charge

R_haterade5• 9 years ago

Nail on the head. When your concern is cost, electric vehicles just don't make sense. I drive 5-10 thousands miles a year, and at $2/gallon gas, I'm looking at a total expense of 4-500 dollars per year.

To illustrate, I recently spec'd out a honda civic, with the base model costing $19k USD, and looking at even hybrids like the chevy volt and prius, I'm basically paying a premium of $4k to $15k for what amounts to a nominal gain in mileage. It just doesn't make sense when the civic is cheaper and more fun to drive (huge consideration when you spend more than 10 minutes commuting every day.) Drop the honda to a fit, and the straight IC is even more of a hands-down winner.

Mileage standards are probably the most effective tool at reducing automobile emissions, and I wish more people costed that out and understood the economic impact, especially on poor people, before coming to any debate on the subject.

Edit: I realize this is more of an american perspective on an article about a european problem. I wish I could bike safely where I live, but the infrastructure costs would probably be tremendous given how spread out everything is here.

gambiting4• 9 years ago

> I drive 5-10 thousands miles a year, and at $2/gallon gas

I assure you that even at nearly $8/gallon over here, an electric vehicle still didn't make much sense when we were buying a new car last year. Even the cheapest Leaf was so much more expensive than a well specced VW Polo that it made no sense to go electric, we did the calculation and the difference in price would not be returned in the savings over the time we are likely to keep the car for.

dpark9• 9 years ago

Nail on the head. When your concern is cost, electric vehicles just don't make sense.

I agree with this. Electric cars are still affordable only to the affluent. Even a Nissan Leaf costs over $30k.

I drive 5-10 thousands miles a year, and at $2/gallon gas, I'm looking at a total expense of 4-500 dollars per year.

This, however, seems really optimistic. 10k miles for $500 in gas assumes $2/gallon and 40 mpg, which is the EPA rating for highway miles in a Civic. Most people are driving >10k miles/year. Most people don't spend 100% of their miles on open highway at optimal speed, nor do most people drive a new car with max efficiency. And most people don't have $2/gallon gas even in the US (the average is closer to $2.50 currently).

Driving 12-15k/year, getting 25mpg, paying $2.50/gallon, you'd be looking at $1200-$1500/year for gas. That's still not enough to offset the difference in an electric car unless you assume long ownership and no major costs to, say, replace the battery pack at 5 years.

aetherson2• 9 years ago

The Nissan Leaf is a shockingly good deal right now if you can deal with the limited range. We got it as a second car, and the deal was $2,500 down, $200 per month for three years. And California has a $2,500 subsidy that effectively drops the price to $0 down if you income-qualify. And PG&E has a $500 subsidy, and they'll also lower your rates.

If you get all the subsidies, you're looking at less than $2,500 per year. I think that most people will save $500+ on gas and oil changes and PG&E rates, so for the three years, let's say that you pay $6,000 all in.

Essentially any new car will lose $6,000 in value over three years. You could lower your TCO by buying used, for sure, but if you care about worn finishes, little QOL things like bluetooth audio and reasonably good climate control, and lower risk of inconvenient maintenance, then I think the Leaf is pretty amazingly good.

IF you can deal with a 90 mile range. That's the big killer. But as a second car or for some people, it's kind of amazing.

mywittyname3• 9 years ago

what amounts to a nominal gain in mileage.

A Prius is 46 combined, the Civic is only 32 combined (as per fuelly). The base Civic uses 50% more fuel than a Prius, I'd hardly consider that "nominal", that's the difference between a 6.2L V8 powered Corvette (22 combined on fuelly) and a Civic.

Another way to look at it is, $2/gallon gas in a Prius is $3/gallon in a Civic.

secabeen5• 9 years ago

When your concern is cost

Not everyone's concern is solely cost, of course. Some of us are happy to pay a little more for a car that eliminates our families largest contribution to global warming. Yes, new Tesla's and other EVs are not cheaper than ICE vehicles today. The Model S has only been available for 5 years. You can't expect EVs to beat ICE vehicles with over 100 years of engineering from minute 1. Give it some time.

bsder2• 9 years ago

At 5K-10K miles per year, you'd almost be better off with delivery, Lyft and rental cars ...

sh87• 9 years ago

Tesla is the stairway to cheaper fully electric cars. Just needs some time.

alacombe5• 9 years ago

For how long have people been saying this ?

MrBuddyCasino• 9 years ago

But Denmark is special, cars are taxed insanely high [0]. For cheap cars (~11.000 EUR) its double the price, for more expensive cars its 150% now and used to be 180%.

[0] https://www.thelocal.dk/20151120/whats-the-deal-with-denmark...

mvindahl• 9 years ago

Dane here as well. We own a Peugeot iOn which we bought for $15,000 a few years back. At the time it was about two years old but hadn't driven very far. The price and size is about the same that you'd pay for very low-end gasoline driven cars in Denmark. I don't regret buying it as it's very fun to drive. On the flip side, the range isn't that far, only about 60 miles, so it's nice for commuting and short trips, but we need our MPV as a fallback for longer trips.

Anyway, I guess the point I was trying to make was that there are electrical cars in a lot of different price ranges these days. The old car manufacturers are trying to board the train as well, with varying commercial success. It's not all Tesla.

workerthread• 9 years ago

I live in Denmark. I still see a rapidly growing number of electric cars on the streets. It is just smaller, less expensive electrical cars that take over (Renault Zoe, WV e-UP, Nissan Leaf). I would venture to guess that Danes don't want to spend more than X kroner on a new car. And the Tesla price point broke that limit when the tax discount was removed.

Pronouncing the electric car uncompetitive over this is an exaggeration.

dmix3• 9 years ago

The article doesn't say it lacks competition.

The decline in growth is entirely the result of the huge import tax:

electric car dealers were for a long time spared the jaw-dropping import tax of 180 percent that Denmark applies on vehicles fueled by a traditional combustion engine.

This article is only looking at growth rates, not total sales by cost or by market position, so it wouldn't be a useful comparative metric anyway.

If anything, what it indicates is that they'd sell 10x more cars (both electric/gas) if it wasn't for the tax.

- 2600 sold in 2015 w/ 0% import tax

- 200 sold in 2016 w/ 180% import tax

jasiek• 9 years ago

Denmark has the most expensive electricity in Europe.

drsim• 9 years ago

source: http://ec.europa.eu/eurostat/statistics-explained/index.php/...

olau2• 9 years ago

Before someone jumps to conclusions: after taxes.

Tax and VAT is around 70% of the price paid per kWh for ordinary consumers.

ebbv4• 9 years ago

Here in Michigan our Republican government has instituted a regressive increase on EV license plate registration/renewal fees. The excuse is that EV owners don't pay the tax on fuel that petrol car owners do, but we still put wear on the road and therefore must pay the price. It's a load of crap though. Michigan's famously bad roads are not due to the very few EVs driving on them. It's semi trucks which are permitted to weigh far beyond what the road was engineered to handle. (Michigan has effectively no regulation of truck weight so the trucking companies overload their hauls and destroy our roads.)

netcan2• 9 years ago

In one form or another, this is something electric car companies need to build into their expectations.

Petrol taxes (exempt by default), sales taxes, road taxes & such add up to a sizeable tax revenue source. In many places they are linked to road/transport budgets. The tax breaks that electrics have been getting were implemented when the segment was so small that it didn't matter. Once electrics reach double-digit market share, they are probably unsustainable. They will probably need to find a replacement for petrol tax too.

Rebranding these as "externality taxes" is well & good, but it doesn't change the fact that government departments need the revenue, externalites or not. Countries can easily afford to "subsidize" electric to get from 0.4% adoption to 4%, but 40% is almost out of the question.

Then there's the regressive tax problem. Yuppies in Copenhagen will be driving tax free Tesla 3s while single mothers pay thousands to drive a Peugeot 206. Many countries implement new-car promoting policies (eg emission tax) of all sorts which are regressive. I doubt this will kill subsidies in itself, but combined with budget holes...

TLDR - Tax breaks are for infant industries. Tesla is launching a mass market car. This is no longer an infant industry.

RugnirViking• 9 years ago

Tax breaks are for infant industries.

I wish someone could tell that to agriculture or aviation or steel

jdhn• 9 years ago

Agreed, the subsidies that these industries receive distort the market. The question is whether the the electric car industry will follow in their footsteps in successfully defending their subsidies, or whether the subsidies will be rolled back.

r00fus2• 9 years ago

Or big Oil.

_archon_• 9 years ago

Once electrics reach double-digit market share, they are probably unsustainable. They will probably need to find a replacement for petrol tax too.

I agree. What form would such a tax take? You could tax tires, which is stupid because it encourages people to buy less safe long-life tires, or you could roll it into property tax, or a VAT, or grocery tax, etc. Even a part of a sales tax could make sense, since logistics for the supplier is included in the cost of the product anyway. Logistical infrastructure tax makes sense.

What is best practice here?

ams6110• 9 years ago

Registration tax.

kileywm• 9 years ago

That tax could shift to a registration fee. In order for the EV to be licensed for road use, an annual registration fee could be applied, or increased if it already exists. Whether it is a flat fee or some other cost structure, it could be a suitable tax replacement.

netcan2• 9 years ago

Well…. the drop-in replacement for petrol tax would really be a per-km tax. Not the easiest to implement, but not impossible either.

dmix3• 9 years ago

Rebranding these as "externality taxes" is well & good, but it doesn't change the fact that government departments need the revenue, externalites or not.

Well not every country charges 180% import taxes like Denmark but this comes with externalities as well.

Cars are so expensive that many people can't afford them (sales were 13x higher without the import tax that's a significant amount of cars not being purchased):

a) meaning poor people can't commute to work, limiting employment options to what is accessible by public transit or cycling

b) consumers are limited to shopping and domestic tourism accessible by transit/cycling

c) businesses that depend on delivery and shipping, or basic car travel, will have lower margins and less growth/employment

d) lower economic output means more dependency on gov social safety nets

e) Car companies can only sell a few already expensive electric cars, reducing economies of scale and R&D investment, further increasing the cost of electric cars and slowing their tech development

f) A big reduction in the surrounding support industries, fuel/electricity, car wash, gas stations, mechanics, car parts, etc

...but yes gov does need money, but the costs of doing so must be fully considered. Including measuring the ROI of various government agencies which this reduced economic output and greater dependency on social services are traded for.

mcv7• 9 years ago

180% import tax?! I'm not sure how that's possible. Are they sure it's not 18%? Cars are an international market, aren't they? Aren't they bound by rules from the WTO and the EU?

With that kind of import tax, I can imagine people can only afford to buy EU-manufactured cars. I hope Tesla hurries up with that European factory.

fauigerzigerk• 9 years ago

I believe the 180% used to be the highest band of a registration tax (now 150%) that has nothing to do with imports. Apart from that there is a much lower import duty for cars from outside the EU (10%?), which has to be in agreement with WTO rules (and other trade agreements).

ljf• 9 years ago

https://www.thelocal.dk/20151120/whats-the-deal-with-denmark...

joakleaf• 9 years ago

Taxes are high in Denmark, but this isn't _import_ tax, which seems to be something that is getting a lot of attention in the US at the moment. It applies to _all_ cars, but electric used to be exempt.

The tax is for "registration" when you purchase a car, and I think its primary (official) purpose is to limit the use of cars and pollution, as well as being aligned with the Scandinavian socialistic mind set -- If you can afford a luxury item such as an expensive car, you are also likely to be able to contribute more to society.

Obviously, people buy cheaper and smaller cars than in the US, so owning 1-2 cars is still quite common despite the high tax rate if you live outside the city centers and need a car.

Some countries have very high taxes on cars -- I think Singapore's is just as high if not worse.

ptr• 9 years ago

A note regarding the "Scandinavian socialistic mind set"; Sweden doesn't have a tax like that and buying a car there is taxed comparably to Germany (with a car price at ~ -2% compared to the EU average).

Xoros• 9 years ago

So basically if the government of the country doesn't pay a huge part of the car (in cash or in tax deduction, or both depending of the country), the so called electric vehicle boom is not really happening.

It's sad. But expected.

kagamine3• 9 years ago

If any HN users are interested in car prices in Norway this is where you can see prices for new, used and leasing. This is the go-to (essentially only) marketplace for cars here : https://www.finn.no/car/used/search.html?filters=

SOLAR_FIELDS2• 9 years ago

Slightly off-topic, but is the name "finn" for the Norwegian site intentional?

moogly• 9 years ago

It's the same word as "find", but yeah, a bit funny.

devy• 9 years ago

   Price really matters.

EV in generally are still costing consumers a whole lot more than the traditional internal combustion engine vehicles. And we've seen that similar EV sales drop due to subsidy running out last year in Atlanta as well.[1]

[1] https://www.marketplace.org/2016/01/08/world/georgia-ev-sale...

hannob• 9 years ago

One thing that is worth mentioning: Denmark is one of the very few countries (two if I'm not mistaken) that takes cycling seriously. They also have good public transport compared to many other countries.

If your goal is to reduce car traffic overall then not subsidizing EV is more understandable.

lucb1e• 9 years ago

I've lived in Finland for a few months and indeed, the cycling infrastructure wasn't what I'm used to as Dutchman. You're either on the sidewalk or in the middle of traffic, both of which are undesirable. Most of the year it doesn't freeze so a bike is perfectly usable. Not as if people work out of the city anyway, a train goes like twice a day. And within the city where I was, it's perfectly doable from one end to the other twice a day.

zurn• 9 years ago

Bikes work fine in icy weather if you put on studded tires. I like the Nokian Hakkapeliitta W106, coincidentally (?) made in Finland.

dmix3• 9 years ago

Denmark is one of the very few countries (two if I'm not mistaken) that takes cycling seriously

Considering the cars have a 180% import tax, a big percentage of the population couldn't afford a car even if they wanted to. So I'd hope they take it seriously.

They also have good public transport compared to many other countries.

Given that this portion wouldn't have a way to get around without it, this seems like an absolute necessity which isn't necessarily the case in other cities. Poor people need to get to work somehow and reach shopping centers and family/friends outside of walking/biking distance.

That said I'm fully in support buses/trains and biking. I bike everywhere and live in a city but still own a cheap car, which I still get a great amount of value out of and find indispensable. It is also important for my partners work who occasionally needs to drive to surrounding areas.

FullyFunctional• 9 years ago

I'm a dane and I never owned a car while I lived in Denmark. HOWEVER, there is a tendency to forget that not everyone lives in high density cities (where public transport is decent). In more suburban area, public transport is hopeless. You _have_ to have a car. Thus people drive, but they drive old cars. The 180% tax doesn't hurt people equally.

Grustaf3• 9 years ago

We won't really know this for a few years. The phasing out of the tax break was announced well ahead of time, so most people just made sure to buy one before it kicked in.

When Model 3 has been out for a year and people have gotten used to the new price points we can revisit the question.

socrates1998• 9 years ago

The car company that is going to win the most market share in the next 10 years is the one with the best self-driving system.

I don't know a lot of details about the technology, but Tesla seems to understand this, so this article seems to be about a small bump in the electronic car market in one smallish country.

I just can't see how people don't just share cars once the auto-pilot is developed enough to drive itself, right?

elliotec• 9 years ago

We need electric busses, not cars.

Animats• 9 years ago

Well, this tells us the price point electric cars have to hit to be viable.

The electric car has dropped out of favor in Denmark

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