Denmark has a new tax on electric cars and Tesla isn't happy

By dkpope
Oct 12, 2015
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  1. On Friday, politicians in Denmark made an agreement to get rid of tax breaks on electric cars by 2020. The Local reports the government says this ban on tax breaks will make things fairer for car owners, but a lot of car manufacturers aren’t happy. Tesla is one of the most outspoken about the issue -- and one of the most highly impacted.

    The Tesla S P85D would go from 875,000 kroner ($133,370.96 USD) which it was at last week, to 1,807,100 kroner ($275,445.32 USD) in 2020. That’s more than double the price and sure to discourage some people from purchasing it.

    According to Tesla, there’s nothing fair about this arrangement. They say it’s anti-competitive and could severely hamper their industry.

    Denmark’s new one-party government argued that because of the tax breaks electric cars have been receiving, the Tax Ministry missed out on 650 million kroner ($99,084,615.50 USD) each year. This new development was supported by The Social Democrats, Danish People’s Party and Social Liberals.

    During the announcement of the political agreement, Tax Minister Karsten Lauritzen said the new plan “balances the needs for the continued expansion of electric cars in Denmark, the public purse and fairness within the automobile market.”

    Lauritzen also said that people were confused about why they had to pay the full registration tax for a regular car and people who bought the pricier electric cars didn’t have a registration tax at all.

    Tesla’s Danish spokesperson, Esben Pedersen, had some strong words in response: “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.”

    The most popular electric car in Denmark right now is the Tesla Model S, so the car company has a lot of interest in fighting the tax break phase-out. Tesla says they're singled out with this new agreement and plans to file a complaint with the EU.

    Permalink to story.

  2. Theinsanegamer

    Theinsanegamer TS Guru Posts: 320   +253

    "The Local reports the government says this ban on tax breaks will make things fairer for car owners"

    Whenever a company or government is trying to make things fairer for customers/consumers/ece, you can rest assured it is most certainly NOT done in the consumer/populations interest, but rather at the interest of someone high up in industry. This hike helps nobody but the government and oil-based car makers.

    "Denmark’s new one-party government argued that because of the tax breaks electric cars have been receiving, the Tax Ministry missed out on 650 million kroner ($99,084,615.50 USD) each year" see? benefits the government.
    Evernessince likes this.
  3. Tanstar

    Tanstar TS Guru Posts: 395   +81

    Taxes that equal more than the price of the car??? And we thought our government in the US was bloated and wasteful :p
    dms96960 likes this.
  4. Evernessince

    Evernessince TS Evangelist Posts: 1,104   +533

    I don't get the thinking here. You don't increase expenses of an emerging technology because you're missing out on tax dollars. Electric cars are more expensive to produce and this isn't going to help. It costs money to be on the bleeding edge, which later trickles down to lower end cars.
  5. Hexic

    Hexic TS Addict Posts: 272   +127

    "This new development was supported by The Social Democrats, Danish People’s Party and Social Liberals."

    There's the issue right there. One could stop reading after that sentence, and automatically know how detrimental said policy is. History never learns from past mistakes.
    dms96960 likes this.
  6. Jeff Re

    Jeff Re TS Member Posts: 18

    It's wrong for the headline to say it's a new tax when it's clearly not.
    ikesmasher likes this.
  7. Skidmarksdeluxe

    Skidmarksdeluxe TS Evangelist Posts: 6,347   +1,943

    Why do this? Is the bribery, corruption, lying, swindling and cheating business, not to mention highly overpaid posts not profitable enough anymore?
  8. davislane1

    davislane1 TS Evangelist Posts: 3,384   +2,169

    They never should have had the breaks to begin with. Same with thing in the US.

    Tesla exists in its current state because it takes advantage of the system in the same opportunistic manner as the rest of the car companies. That edge is finite and if they can't figure out how to make the product cheaper, they won't be around for the long haul.
    Burty117 and hahahanoobs like this.
  9. Why should electric cars have tax breaks in the 1st place?
  10. davislane1

    davislane1 TS Evangelist Posts: 3,384   +2,169

    Because some players with skin in that game had access to the appropriate political figures and appointees.

    Because if we don't support EV through government action oil companies will destroy the planet.

    Why do you hate polar bears?
    RebelFlag and agb81 like this.
  11. VitalyT

    VitalyT Russ-Puss Posts: 3,114   +1,379

    I for one agree. You cannot call a product competitive without a fair competition.

    They are calling electrical cars accessible by cheating through special price agreements? That's not accessible, that's a financial problem waiting to happen.

    The electric cars must be in the same tax bracket as non-electric ones. They are supposed to be able to create a genuine incentive for buying them: a) cleaner environment b) cheaper to run.

    And if they fail on any of the expectations, they are not viable on the market. Simple.
  12. VitalyT

    VitalyT Russ-Puss Posts: 3,114   +1,379

    Your democrats are wasteful in that regard, but republicans do not let them get bloated.
  13. VitalyT

    VitalyT Russ-Puss Posts: 3,114   +1,379

    I believe it was a great thing to give boost to the new industry, but now it is time to close the loophole and let it swim on its own.
  14. wastedkill

    wastedkill TS Evangelist Posts: 1,373   +310

    Its funny you lot are fine with buying something that has a "Tax" almost double of what its original cost was, lets take your shopping into account ok? so instead of tax of 20% lets make it hmm the same "Tax" of the new electric cars which is what? 210%? looks like your OK with paying that much extra for your shopping :) glad your part of the super rich it must be nice :)
  15. davislane1

    davislane1 TS Evangelist Posts: 3,384   +2,169

    It isn't a 210% tax. Tesla enjoys special tax treatments that result in them being able to sell a $300,000 car for a mere $133,000. Furthermore, nobody is going to pay $300,000 for a Tesla. That's the point: they are able to sell a product that is economically unviable exclusively because the government has granted them special favor over other companies.

    Denmark is merely ending Tesla's status as privileged organization within its borders.
    Burty117 and BMfan like this.
  16. Evernessince

    Evernessince TS Evangelist Posts: 1,104   +533

    Because electric cars cost significantly more to develop than gas cars. As we can see by the jumps electric cars have been making over the last few years, the investment is well worth it.
  17. mctommy

    mctommy TS Booster Posts: 189   +30

    You are dead wrong, it is a 100% tax. It's not a $300k car, it's a $130k car with a $140k car tax on it. Some countries have taxes that are equal to sales taxes, others have 100-150% or more taxes (e.g. Vietnam has the following tax on vehicles: 60% sst, 20% registration, 70% import).

    I am in favor to get rid of this tax break though because it gives so great of an advantage.
  18. mackintire

    mackintire TS Rookie

    The part they are leaving out is that car's have an effective 180% Sales Tax on them once you include the VAT tax and all the other taxes. So a 2.0 liter diesel Honda Accord runs $86,000 USD in Denmark. So $275,445.32 USD for a tesla might not be unreasonable.

    If we flip the crazy tax scaling downwards and use the US market prices the equivalent would be the Telsa selling for $60k due to tax breaks and being raised to $150k US.

    So if they kept some of the tax breaks and allowed Tesla's to be sold for $200k in Denmark that might be more palpable.
  19. thewind

    thewind TS Enthusiast Posts: 75

    This is total BS thats like saying there should be tax on food! You need food to survive!!! In MN there's no tax on clothes either! Cuz it's a need! And having an electric car that saves our environment is a 100% need! like one of the comments said "Why do you hate polar bears?"! The need for electric vehicles is great there so much you can do with electric like: get power from stopping, get power from the sun, get power from wind when the car is stopped? IDK the point is there are way more possibilities with electric vehicles than with gas.
  20. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 8,430   +2,822

    Don't mistake a luxury for a need.
    davislane1 and Burty117 like this.
  21. Burty117

    Burty117 TechSpot Chancellor Posts: 2,890   +645

    You live in a place where they don't tax you on Food and clothes?

    You lucky sod, here in the UK you're taxed on basically everything, Food & Clothes included...
  22. davislane1

    davislane1 TS Evangelist Posts: 3,384   +2,169

    Sounds to me like your keyboard could use some regenerative braking.

    No, I'm not. Denmark levies high taxes on motor vehicles. Until now, they have granted Tesla a special exception to the rules other manufacturers must abide. Ergo, they have been able to sell a $275,000* (MSRP + applicable taxes and fees) car for a fraction of the price (~$133,000).

    The price of the car is what you pay to drive it off the lot, not the MSRP printed on the window sticker.

    *I rounded this number up for convenience in the previous response.
  23. Zenodroid

    Zenodroid TS Booster Posts: 131   +27

    Another thing, how many teslas is there in denmark ?
  24. SirGCal

    SirGCal TS Maniac Posts: 365   +136

    The truth here is that is driven by municipality. Most of them in the US do not tax food in grocery stores, or meds, stuff of that nature, but not all. But if you go to a restaurant, there is tax for food consumed on premises.

    Then I see people from Denmark not being able to get a Tesla anymore and Tesla pulling out of the area. They won't be able to keep a business there. Those taxes are insane. And I thought US taxes were bad.
  25. davislane1

    davislane1 TS Evangelist Posts: 3,384   +2,169

    There are a number of countries with extremely high taxes on motor vehicles. They do it to suppress the number of vehicles on the road.

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