Sales of electric vehicles have plummeted in Denmark, previously one of the world’s leaders in the adoption of EVs.
In the first quarter of this year, local sales of Electrically Chargeable Vehicles (ECV) in the nation fell by 60.5 per cent compared to the same time period in 2016. This comes despite EV sales increasing by an average of 30 per cent across the European Union and almost 80 per cent in Germany and Sweden respectively.
The dramatic shift in EV sales in Denmark comes down to one thing, a government promise to eliminate substantial tax breaks.
During Denmark’s booming EV sales period of 2015, electric vehicles were spared the 180 per cent import tax that the country slaps on ICE vehicles.
The government originally intended on phasing out all EV tax breaks by 2020, but noticing the falling sales, has altered its plans. Under new rules, a post-subsidy era has been postponed until a minimum of 5,000 EVs are sold over the 2016-2018 period. Regardless of sales, the tax breaks will be slowly eliminated from 2019.
In a statement, Tax Minister Karsten Lauritzen said “It’s no secret electrical vehicle sales have been below what we expected a year and a half ago. The agreed phase-in has turned out to be hard and that likely halted sales.”
In 2015, Tesla sold 2,738 Model 3 units in Denmark but following threats to phase out subsidies, sales slipped to just 176 units in 2016, Bloomberg reports.
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