Currently, Danes who buy a new car must pay a 180% registration tax to the government, unless that shiny new car is electric. In that case, the tax is zero, a policy designed to promote emissions-free driving within the country. Not surprisingly, the best-selling electric car in Denmark is that Tesla Model S. A P85D today costs $137,500, but once the proposed new Danish tax plan is fully phased in 5 years from now, the 180% tax will apply to ALL new cars, and that Tesla Model S’ price will soar to more than $270,000!
Tax Minister Karsten Lauritzen says the new plan “balances the needs for the continued expansion of electric cars in Denmark, the public purse and fairness within the automobile market.” He says the new plan will add $100,000,000 annually to the nation’s coffers. “Electric cars have for a long time been better positioned than other cars by being completely exempt from the registration tax. Many regular Danes have a hard time understanding why they should pay the full registration tax for their regular cars while those who can afford an electric car have gotten off completely free,” Lauritzen said in a press release.
Tesla, whose Model S is Denmark’s best-selling electric car, expressed its immediate disappointment in the deal. “All things being equal, this is not a phasing-in of levies on electric cars but rather a phasing out of electric cars in Denmark,” said the company’s Danish spokesman, Esben Pedersen, according to Danish press outlet The Local. Pedersen says the plan is unfair because it penalizes luxury models much more then smaller, cheaper cars. The company plans to file a complaint with the European Union. “We will contact the EU because we believe that the electric car agreement is anti-competitive and singles out Tesla. The deal will hit the entire electric car model and will eliminate it instead of developing it,” Pedersen told Denmark’s TV2.
Denmark’s rethinking of its emissions policies comes at a bad time for the world community, as delegates from around the globe prepare for the next global climate conference in Paris this December. It may also give a preview of the debate facing the United States when the current federal tax credit for electric and plug-in hybrid cars expires on December 31, 2016.