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Denmark Is Killing Tesla and Other Electric Cars (bloomberg.com) 172

An anonymous shares an article: The electric car has dropped out of favor in the country that pioneered renewable energy. Sales in Denmark of Electrically Chargeable Vehicles (ECV), which include plug-in hybrids, plunged 60.5 percent in the first quarter of the year, compared with the first three months of 2016, according to latest data from the European Automobile Manufacturers Association (ACEA). That contrasts with an increase of nearly 80 percent in neighboring Sweden and an average rise of 30 percent in the European Union. Denmark, a global leader in wind power whose own attempt at an electric car in the early 1980s famously flopped, used to be enthralled with them. Its bicycle-loving people bought 5,298 of them in 2015, more than double the amount sold that year in Italy, which has a population more than 10 times the size of Denmark's. The figures suggest clean-energy vehicles still aren't attractive enough to compete without some form of subsidy. However, it turns out that those phenomenal sales figures had as much to do with convenience as with environmental concerns: 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.
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Denmark Is Killing Tesla and Other Electric Cars

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  • So... (Score:5, Insightful)

    by DontBeAMoran ( 4843879 ) on Friday June 02, 2017 @01:51PM (#54537161)

    It's all about price and market demand? If everyone who can afford an electric car already has one, of course the demand is going to drop.

    What drug-induced hallucinations do people teach in business schools? Infinite growth is impossible, once the growth phase is over the target should be a nearly flat equilibrium.

    • Re: So... (Score:4, Insightful)

      by Anonymous Coward on Friday June 02, 2017 @01:56PM (#54537219)

      Denmark recently ended no-tax rules on "luxury" e-cars, so they are now also subject to the 180% registration fee (that is on top of 25% VAT, mind). Other than killing much of the original attraction, there's a psychological barrier to buying at 3x the price, what you neighbour got at 1x last year.

      • Re: (Score:3, Interesting)

        by Rei ( 128717 )

        The data in the article is confusing - they talk about a 60,5% drop, yet they show a vastly more than 60,5% drop in their graph. Maybe the graph isn't a complete Q1?

        Adding up the 2015 figures, I get around 4600 EVs sold. In the same year in Denmark, 206998 cars were sold [carsalesbase.com] total in Denmark, so 2,22% of new vehicle sales were EVs. In the US in 2015, 114248 PEVs were sold, versus 17,5m total, so 0,65%. So even if Denmark's EV sales dropped 60,5%, they'd only just be equaling that of the US.

        • Re: (Score:3, Interesting)

          by Gr8Apes ( 679165 )
          There's also the minor issue that cars, especially Teslas, are expensive, and more so in Denmark with that minor tax tacked on. So how many people can really afford a $200K car that didn't already buy one last year? I wonder, about 176?
      • Re: So... (Score:5, Informative)

        by KozmoStevnNaut ( 630146 ) on Friday June 02, 2017 @02:53PM (#54537711)

        180% registration fee

        It's 150%, and only on the car's value above ~$16K. It's 105% below that value.

        • Buy the Tesla in Germany, sell it to yourself (in Denmark) for five bucks. Write off the loss on your taxes.

        • For 150% the price of a Tesla, I'd just drive it without registration and just pay fines for an unlicensed car.

          That is, if they could catch me to give me a ticket... :-)

          For everyday use without getting stopped, just print up a registration place yourself using a 3D print of a plate, paint it, and drive carefully.

          • Re: (Score:3, Informative)

            The fine is to pay the registration fee, plus a fine on top, plus they confiscate the car, plus you may go to jail if you do it more than once.

            Also, number plates are centrally-registered, they would know pretty fucking quickly if a plate was fake.

            • Re: (Score:2, Insightful)

              by SuperKendall ( 25149 )

              Also, number plates are centrally-registered, they would know pretty fucking quickly if a plate was fake.

              Both reasons you list simply mean you should be careful to use someone else's Tesla plate number when you print your fake plate...

              P.S. This is obviously a joke as I would never abuse the sanctity of the Internet to promote anything even mildly illegal.

          • by es330td ( 964170 ) on Friday June 02, 2017 @04:14PM (#54538423)

            That is, if they could catch me to give me a ticket... :-)

            Catching a Tesla would be trival. An S is lightning fast for only a very short distance; a P100D can't even make one lap of the 14 mile Nürburgring at speed. All an officer has to do is chase until it goes into "limp" mode.

          • by Kjella ( 173770 )

            For 150% the price of a Tesla, I'd just drive it without registration and just pay fines for an unlicensed car. That is, if they could catch me to give me a ticket... :-) For everyday use without getting stopped, just print up a registration place yourself using a 3D print of a plate, paint it, and drive carefully.

            Don't think that would work here in Norway. Maybe as long as you don't pass through any automatic license plate scanners as I do twice every workday, and no there's no manual lane. An invalid number would get you flagged pretty quick. And you'd better hope the number you copy pay his road taxes and doesn't check his toll road bill or history and that there's no red flags when you pass through two different places in an unreasonably short time. If you're caught, the car would probably be impounded. They'll d

        • Oh, only a 105% tax. That makes it much more affordable!

        • That's much better.

    • by hackel ( 10452 )

      *No one* is suggesting "infinite growth." The fact is we are nowhere close to "everyone who can afford an electric car already has one." Furthermore, in case you haven't heard, people actually do buy new cars. Consumer EVs have certainly been around long enough for people to be replacing them already, particularly those who have too much money to spend and/or an interest in the latest automotive technology.

    • Where in the article does it suggest that everyone who can afford an electric car already has one? How does that even make sense? Surely there's far more people driving an expensive luxury ICE car than a Tesla.

      Even if every single expensive car in Denmark is an electric car, cars still get older, crash into trees, people buy a second car, etc.

  • by AmiMoJo ( 196126 ) on Friday June 02, 2017 @01:52PM (#54537175) Homepage Journal

    Why were the subsidies removed?

    Cheap, long range EVs are available now (e.g. the Renault Zoe) but I guess there needs to be more choice in the market for them to really sell well on their own. The new Nissan Leaf is due later this year, Tesla Model 3 probably late next year for Europe and a few others.

    • by srmalloy ( 263556 ) on Friday June 02, 2017 @02:26PM (#54537495) Homepage

      No 'subsidy' ever existed on EVs; rather, it was a tax incentive. Denmark has a huge tax on new cars, which can reach 180% of the car's value. EVs were exempted from this tax through the end of 2015; beginning in January of 2016, new EVs were assessed a 20% tax. In December 2015, as people rushed to avoid the looming tax change, 1,588 EVs were sold; the following month, 68 were sold. Last January, the tax on new EVs rose to 40%, and the tax reduction compared to conventional vehicles will be phased out completely by 2020.

      Because of the collapse in EV sales as a result of this (1,300 EVs were sold in Denmark in 2016, while Tesla alone sold 1,300 EVs in Denmark in December of 2015, before the tax exemption expired), Denmark is walking back the changes to an extent; the tax rate will remain 20% until there have been 5,000 EVs sold, or until the start of 2019, whichever comes first. At that point, the tax rate returns to 40%, rising to 65% in 2020, 90% in 2021, and 100% in 2022. In addition, there will be a new tax on the electricity used to charge EVs, both private and commercial.

      More details at electrek.co [electrek.co].

      • by AmiMoJo ( 196126 )

        Thanks, that's some great background info.

      • No 'subsidy' ever existed on EVs; rather, it was a tax incentive. Denmark has a huge tax on new cars, which can reach 180% of the car's value.

        It's 150%, and only on the car's value above ~$16K. The tax is 105% below that value.

        • by jedidiah ( 1196 )

          That's still a huge burden for any car buyer in 2017. So instead of the car only costing an arm and a leg and another food, it just costs and arm and a leg. That's not even getting into international income comparisons.

          • I didn't say it was low, or even appropriate, I simply corrected the numbers.

            Denmark also has really damn good public transport, and certainly for people who live in the cities, there is no real need to own a car. For people in the countryside, housing costs are significantly lower, which does offset the need for a car.

      • Comment removed based on user account deletion
      • No 'subsidy' ever existed on EVs; rather, it was a tax incentive. Denmark has a huge tax on new cars, which can reach 180% of the car's value. EVs were exempted from this tax through the end of 2015;...

        In Newspeak, that's called a "subsidy".

  • 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.

    Well, that's impressive... they've developed cars that burn combustion engines as fuel??

    • Well, that's impressive... they've developed cars that burn combustion engines as fuel??

      That sounds extremely inefficient!

  • There are only so many people that want to put up with the inconvenience of these. Once all those people have one, then of course the market will drop.
    • by Anonymous Coward

      It's more about the fact that consumers using gasoline cars do not have to pay the costs directly. Instead, the costs of their choice are socialized to everybody. If gasoline users had to pay enough gas taxes to cover all the costs associated with their use of gasoline that market would evaporate in a couple of years.

      • It's more about the fact that consumers using gasoline cars do not have to pay the costs directly. Instead, the costs of their choice are socialized to everybody. If gasoline users had to pay enough gas taxes to cover all the costs associated with their use of gasoline that market would evaporate in a couple of years.

        First of all, you forget that most countries charge taxes on gas purchases. In fact, these taxes were supposed to be earmarked for road improvements and to offset other expenses. The problem is that governments then discovered ways of diverting this money to other things like pet projects. Plus, the cost of scrubbers, etc. used in gas refinement are included in the price of gasoline. Gasoline is just one product of many that comes out of the refinery. The same process creates a ton of other things like

      • .. gasoline cars do not have to pay the costs directly. Instead, the costs of their choice are socialized to everybody. If gasoline users had to pay enough gas taxes to cover all the costs associated with their use of gasoline that market would evaporate in a couple of years.

        Tell me how (in the UK at least) the costs of my gasoline choice (as opposed to electric cars) are "socialised to everybody". EVs are practically exempt from running tax in the UK while I am paying about 0.1 GBP per mile in annual excise duty plus about 0.14 GBP per mile tax on the fuel; about 1200 GBP per year for me. How is this spent on "costs associated" with my use of gasoline? I am massively subsidising EVs, which need just the same road mantenance, policing, signage etc.

  • by hackel ( 10452 ) on Friday June 02, 2017 @02:02PM (#54537263) Journal

    Can someone explain *why* a 180% import tax ever existed in the first place? It's not like Denmark has a large domestic auto industry it needs to protect. And I assume the fee is only for cars imported from outside the EU (not Denmark), right? I can't imagine they'd be that interested in artificially propping up the Swedish and German auto industries. I just don't understand this.

    Of course the electric vehicles should be subsidized in the form of reduced taxes, but completely eliminating them isn't the right answer either. Lower the duty to something like 20%, remove it for EVs, but still charge VAT for both.

    • I bet universal healthcare and an amazing social safety net that (nearly) all citizens seem to approve of and enjoy is part of the equation.

    • Re:Explanation (Score:5, Insightful)

      by ottothecow ( 600101 ) on Friday June 02, 2017 @02:12PM (#54537357) Homepage
      No. All cars are taxed that much (except for cars sold below ~$12k which are only taxed at 105%) . It is not an import tax, but rather a registration tax, so it doesn't matter where the car comes from.

      The headline is pretty misleading though. All denmark is doing is applying the same tax to Teslas as it used to apply to other cars. For a while, Teslas in denmark were very "cheap". You could get a fancy Tesla without the tax for roughly the same price as a car with 1/3 of the sticker price.

      Given the tax is an insane 180%, it was never entirely about emissions. It was also about encouraging people not to own cars, cut down on driving (wear and tear == buying new cars), cut down on upgrading perfectly good cars, etc. It is heavy-handed social engineering. Prior to the Tesla, these cars were kind of an "oddball" thing. But with the Tesla, it kind of just let wealthy car buyers get a huge discount on something that is sold as a luxury vehicle in the rest of the world.

      • It is heavy-handed social engineering. Prior to the Tesla, these cars were kind of an "oddball" thing. But with the Tesla, it kind of just let wealthy car buyers get a huge discount on something that is sold as a luxury vehicle in the rest of the world.

        Is it social engineering or does Denmark want only the wealthy to drive? It would help reduce traffic and improve parking if the pesky peons aren't allowed on the roads.

        • by GNious ( 953874 )

          Is it social engineering or does Denmark want only the wealthy to drive? It would help reduce traffic and improve parking if the pesky peons aren't allowed on the roads.

          Outside of inner-Copenhagen, by far most families have a car, and many have 2. The number of cars on the road is rising (or was last I looked at it.)
          But many also choose to take their bike or public transport, which may be the case due to car-ownership being expensive or for the latter because of a semi-decent public transport infrastructur

        • In Denmark everyone is 'wealthy'.

    • Re: (Score:2, Interesting)

      Simple: it exists because people will pay. This is the same in every country, whether it's extreme registration fees, fuel taxes, or road taxes. In many European countries these revenues exceed the cost of road networks and is used to fund other governent programmes. If you raise income taxes or VAT, people will scream bloody murder. However if you increase taxes on cars a little, many people might even agree, especially since they are still under the impression that cars are a major contributor to poll
      • by swb ( 14022 )

        I'm guessing car ownership in Denmark is also lower than most other countries and that most people with cars own smaller and cheaper models (for all kinds of reasons, including the tax on new vehicles, fuel efficiency, etc).

        So expensive new cars are probably seen as a status symbol and it's easy to get behind a tax on what amount to toys for rich people.

        I'd be curious to know what loopholes there are in the law, such as buying a used car in Germany or elsewhere and bringing it into Denmark or importing cars

        • by Altus ( 1034 )

          if its a registration tax it would presumably be applied to used cars as well. The way that works here in the states (well, my state) is that it is based on the book value of the vehicle rather than the sale price to avoid people paying $1 for a car (if the car is in fact a gift from a family member or something I believe you can file for a waver on the tax with a signed affidavit)

      • Simple: it exists because people will pay.

        False. It exists because people won't pay. Taxes are a great handle on consumption. Car ownership rates in Denmark are half that of the USA. In Copenhagen 60% of people commute via bicycle. Car ownership rates in Singapore are also really really low because it's even more expensive there.

        It works on other products too. Cost of a 20 pack of cigarettes in Australia is about to hit $30US. Only 14% of Australian adults smoke, down from about 25% 15 years ago.

    • Simple, to keep the number of cars low in the country, to ease congestion on the street.

      A comparison: Hong Kong has 100 % tax levy on cars. Hong Kong does not build cars.

    • Re:Explanation (Score:4, Informative)

      by thegarbz ( 1787294 ) on Friday June 02, 2017 @04:52PM (#54538695)

      It was a flat tax on cars, nothing to do with propping up an industry. It's all about reducing ownership and driving people towards alternatives.

      That may be hard to grasp for the United States which has the highest car ownership per capita in the world (at least out of countries with more than 100,000 citizens). But it's a very Scandinavian thing to do. Denmark has half the car ownership per capita than USA. Driving makes up less than 60% of traffic on Danish roads. And more than 80% of Danes own a bicycle. 60% of people in Copenhagen commute via bicycle.

      That's the kind of thing this sort of tax aims for. It's also not unique to Demark. Several other countries have taxes to promote either green alternatives or traffic reduction. e.g. I paid 5600 EUR of tax on my small car in the Netherlands (based on emissions). That doesn't sound like much but given that the car was only 16000EUR in the first place, and that I also have 3200 EUR in sales tax as well as 600 EUR per year road taxes (based on petrol car, emissions and weight), cycling is an attractive alternative and when we moved here we reduced from 2 cars to 1. The Netherlands is fractionally above Denmark in car ownership.

      In Singapore you also have serious car taxes. It's a small island so keeping cars to a minimum is in everyone's interest. On top of 180% of the value of the car in just registration fees, there's also 20% sales tax, a carbon tax if you emit more than 185g/km CO2 (which is about to be reduced to 160g/km and have 4 other gasses added to it), oh and a Certificate of Entitlement to own a car will cost you $50,000 USD on top of all that. Net result, they have 1/7th of the car ownership rate of the USA despite being a relatively wealthy country. Cycling rates in Singapore are relatively low, but public transport usage is very high.

      If you have alternate infrastructure in place, a tax is a great way to get people to give up gas guzzlers.

    • Denmark is what you would call a socialist/communist welfare state.
      They have a luxury tax on plenty of things, instead of a super high income tax.
      So what the state considers a luxury good is taxed, regardless if imported or home made.
      And from that they pay their lifestyle :)

    • It was essentially to protect the trade balance, since Denmark has to import all cars, to limit consumption during the oil crisis, and lastly to tax luxury goods, which is common in Denmark. Even if two out of three of those don't apply anymore, it's hard for politicians to cut tax revenue, and lowering the tax would cause massive losses for current car owners, both private and corporate, which is not popular.

      And the tax hasn't been 180 % for a few years now but 105/150 % depending on value. When it was low

  • jaw-dropping import tax of 180 percent that Denmark applies on vehicles fueled by a traditional combustion engine

    When someone makes the mistake of suggesting the US apply any sort of import tariff/tax the establishment and their muppets bleat OMG TRADE WAR WTF IS WRONG WITH YOU!!11!.

    Meanwhile sovereign countries in Europe have truly confiscatory import taxes (180%?) protecting economies that are celebrated around the world as models of good governance.

    Hmm.

    • Re: (Score:3, Informative)

      It's not an import tax but a registration tax. Applied to all cars, not just imported ones.

    • OMG TRADE WAR WTF IS WRONG WITH YOU!!11!.

      So here's the thing.

      Your country can produce cars for $40k. The next country can produce and import equivalent cars for $30k. Let's assume that you have wage-equivalence (not US vs China), so the next country over just has a better infrastructure (e.g. they have water, ore, and other resources close enough to expend less effort getting the same result; given the same technology, you're always going to spend 1/3 more to make the same cars).

      People in your country buy those cars for $30k. You have like

    • Not that any of this matters because the 180% is not an import tax, it's a registration tax and Denmark doesn't have a car industry they are protecting, but those are the same people making those comments for a reason:

      USA person: Look at them Europeans protecting their jobs with tariffs and taxes. We need that.
      USA person: You want me to pay how much more for my stuff? Why are you taxing the things I like. Screw you government!

      Meanwhile as neutral third parties we say all free trade agreements with any natio

  • Something rotten is going on in Denmark.
  • I'm amazed electric cars sell as well as they have done thus far. They are incredibly expensive, generally have a double digit range between multiple hour chargings and every single time you charge that battery you know your maximum range is only going to go down. That's not even mentioning the cable which, unless you park in a garage or inside a gated driveway, is likely to be out in public for any retard to unplug/cut/trip over.

    They are a fad and people are beginning to realise that. The people that want

    • I don't think EVs are a fad. The batteries are still kind of expensive but the prices are coming down. You don't need a 400 mile range. There's like no one who regularly drives that distance. It would only add extra battery weight, expense, and decrease efficiency for no good reason. I could see a battery rental business becoming available for such users but other than that it makes no sense for most users.

      200 miles range is quite enough. The advantages? Much lower fuel cost per mile driven, higher accelera

    • PHEVs have a double-digit range (e.g. the Volt has 58 miles, 420-ish total). All-electric cars have multi-hunded-mile ranges. Tesla's early vehicles were 180-ish miles; Chevrolet has the 238-mile Bolt.

      Charge times on a home charger (220V) at 30A put on about 20-25 range-miles per hour (3-4 miles per kWh; I get 3.3 in the winter and as high as 4.2 in the summer). 220V at 40A gets you 25-35 miles; the popular 9.6kW all-electric on-board for 240V at 40A is 29-36 range-miles per hour. The Bolt can take a

  • The graph explains what happened. [assets.bwbx.io]
    and for the blind:

    In the fall of 2015, the Liberal-led government of Prime Minister Lars Lokke Rasmussen announced the progressive phasing out of tax breaks on electric cars, citing budget constraints and the desire to level the playing field.
    [...]
    The new tax regime "completely killed the market," Laerke Flader, head of the Danish Electric Car Alliance, said in a recent interview. "Price really matters."

  • by KozmoStevnNaut ( 630146 ) on Friday June 02, 2017 @02:51PM (#54537699)

    the jaw-dropping import tax of 180 percent that Denmark applies on vehicles fueled by a traditional combustion engine.

    No, goddammit.

    The tax is 105% on the value up to ~$16K, and 150% (used to be 180% until about a year ago) on the value above that. There are also adjustments to reward good fuel economy.

    Yes, the tax is high. But please get the numbers right.

    • I think the even bigger "no goddammit" is that it's NOT an import tax. It's a tax applied to all cars.

      • by djinn6 ( 1868030 )
        Given that Denmark doesn't build their own cars, it's the exact same thing as an import tax. You can call it whatever you want, but I'm going to call it an import tax.
        • And calling it whatever you want is exactly what lead to republicans frothing at the mouth all over this post. Calling it whatever you want is what is causing people to compare it with tariffs. Calling it whatever you want causes wide spread confusion to those people who don't realise that Denmark doesn't build cars.

          You CAN call it whatever you want. But really if you want to have a sensible discussion you shouldn't.

        • No. It's a registration tax, which would be applied to locally-produced cars as well. So it is very much NOT an import tax.

  • However, it turns out that those phenomenal sales figures had as much to do with convenience as with environmental concerns: 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.

    That's not convenience, that's price.

  • Tesla's are normally very expensive cars so yes it was surprising they sold so well. Still I wouldn't exactly call this a subsidy, seems to be more a tax break because it seems regular gas powered vehicles have a massive tax on them. I own a Volt, and in Ontario-Canada thanks to an actual subsidy of about $7,000 which is similar to the hybrid subsidy that existed for years before it, it became affordable for me. I have absolutely no regrets over it, compared to my Corolla which I also bought new at the t

  • 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.

    Wow, so electric cars get their government approved advantage (a MASSIVE one at that), and their sales drop? What did you think was going to happen? Why do you think the subsidies exist in the first place?

    • why do subsidies exist indeed? if a technology can't make it in the market on its own merits it is not ready for prime time. Subsidies are a curse on the taxpayer that benefit a privileged few

  • by Krakadoom ( 1407635 ) on Friday June 02, 2017 @05:52PM (#54539191)

    Hardly anything in that summary is accurate.

    Firstly, the nominal tax rate for vehicles is 150 % and that's only for the higher parts of the value of more expensive vehicles. Second, starting in 2016 taxes for electric vehicles started being gradually phased in. As such the tax on electric vehicles went from zero to at most 20 % of the tax on non-electric vehicles in 2016, plus there is a deduction on top of that effectively making anything cheaper than a Tesla still tax free (the tax system is progressive and value based, but the deductions are fixed value).

    A lot of vehicles were hoarded towards the end of the zero tax period ending in 2015, making the sales numbers artificially high by displacing sales that might otherwise have come in 2016 to 2015 due to the foreseen tax hike. A lot of those vehicles were bought to subsequently sell for profit once the taxes kicked in, which is evident in that many have since been sold or exported. In 2017 the tax rate rose to 40 %, though through deductions still pretty much only Teslas (and some expensive hybrids) are actually taxed.

    Lastly, since late 2016 and all the way up until mid April 2017 there have been very public political discussions about extending the tax breaks for electric vehicles. This means that during that time, only an idiot would have bought an electric car, knowing that it was highly likely for taxes to be cut on them again shortly. This is in fact what happened, and rates were lowered from 40 % back to 20 % for two more years. This makes sales naturally very weak in Q1 2017.

    So in short, you can't compare 2015 to 2016 or 2017 without taking into account what happened during that time politically and the market forces that drove the 2015 spike. Basically the article is bad, and you should feel bad. ;)

    Source: I drafted the legislation and can read.

  • by Tom ( 822 )

    ...it could just be market saturation. There's only so many electric cars you can sell until everyone who wants one, has one. And then they're good for a couple years and after that there's the used market (e-cars are slowly coming to the used market. When I first had the thought that a Tesla would be cool, there was a supply of zero on the used market. Last time I checked, there were four or five).

  • They make it sound so bad, then tell you it wasn't even 6,000 cars.
    Who cares.

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