
The electric car has dropped out of favor in Denmark - bipson
https://www.bloomberg.com/news/articles/2017-06-02/denmark-is-killing-tesla-and-other-electric-cars
======
mrweasel
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.

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

~~~
LeifCarrotson
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.

~~~
ant6n
> But EVs (and hybrids, to a lesser extent) break this model. They are
> expensive, but environmentally friendly.

Not quite. EVs reduce direct pollution, but there are still a lot of negative
externalities. There are obvious ones relating to the manufacture and also to
then still requiring energy.

But car culture itself has all sorts of issues, no matter the drive train: it
encourages bad urbanism and sprawl (with large environmental impact),
encourages inefficient land use via extensive parking, it taxes the
infrastructure, it encourages bad health, and also some direct accidents.

~~~
eeZah7Ux
Why the downvotes? Building and maintaining big roads, bridges, parking spaces
has a huge social and environmental impact compared to increasing public
transportation.

~~~
WorldMaker
Public transportation is preferable to cars, but let us not paint electric
cars as having any more negative externalities than their internal combustion
brethren.

(The steel/aluminum/plastics of a car's exterior/interior/chassis are shared
by cars regardless of drive train and still the overall impact of those
materials dwarfs the environmental impact of battery technologies.)

~~~
ant6n
> let us not paint electric cars as having any more negative externalities
> than their internal combustion brethren.

I wrote:

> EVs reduce direct pollution, but there are still a lot of negative
> externalities.

~~~
WorldMaker
Sorry, I wasn't specifically directing that comment at you. There are a lot of
people that will read what you wrote and assume you mean there are more
negative externalities than the equivalent internal combustion car. Certainly
you see that sort of talk/mythology a lot lately. I read your comment that way
at first, but realized that was not what you had meant, but I can certainly
see people downvoting it for assuming that is what you meant.

------
misja111
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.

~~~
SOLAR_FIELDS
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.

------
netcan
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.

~~~
_archon_
> 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?

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

~~~
24gttghh
I would think it would be a kWh tax...since actual mileage for an EV would
vary based on local geography/traffic/weather etc in a similar fashion to MPG
for ICE.

------
workerthread
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.

~~~
dmix
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

------
hannob
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.

~~~
dmix
> 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
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.

------
ebbv
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.)

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

~~~
dogma1138
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.

~~~
inopinatus
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.

~~~
dogma1138
That isn't a bus, that is car hire. Busses and other public transport work
well because you have a route which makes it predictable people know when and
where they can get onto a bus, and where they can get off and how long the
ride will take. There is no point of using 50+ people bus as an Uber.

A small car service would be better for that, it's also the reason why taxis
do not use larger vehicles unless you book a special ride upfront.

Even with ride sharing it's often more efficient to have point to point
transport when you are not using a route, or at best have only 1-2 stops on
the way; in such case a bus is unnecessarily wasteful.

But yet again this isn't anything that cannot be done now without a driverless
bus, you have GPS nothing stops public transport companies from implementing
dynamic routes now the driver isn't the problem.

Most bus lines do have "dynamic" dispatching already BTW, peak hours tend to
have more busses on a given route than off-peak hours, what you are suggesting
is to have dynamic routes, which is basically Uber.

~~~
marcosdumay
If you put 20 people on that "car", it's a bus.

Small buses can adjust their route to get you reasonably quick point to point
transport while still being collective transportation. I do agree that is
something that could be done today, if only governments let people do it. No
need for self driving buses.

~~~
dogma1138
There are plenty of places that allow for small (van sized) private
bus/shuttles to operate, they however do not seem want to go that route and
usually either shadow existing bus route or have their own routes where buses
do not usually go (and usually a mix of both).

The problem is that when you turn busses into cars for hire you end up in a
situation where you'll get a lot of people pissed all the time.

Ride sharing with even 5 people that are not bound to the same destination is
a nightmare.

Think about what happen when you have a bus with 18 people that is diverted
because someone called it and then cancels it?

How do you plan stops? Uber can stop nearly anywhere a bus usually needs bus
stop not just to not block traffic but because people need to be able to
safely get on and off the bus which is much harder to do than with a car as a
bus blocks the view much more than a smaller sedan.

Sorry; I'll buy a Tesla that works for Uber while you are at work all day
long, I will not buy ridesharing with on-demand hailing and bespoke routes and
destinations with 20 people on board.

The best thing you can do get working is a fixed route without fixed stops,
and this works today it's called hop-on-hop-off busses and it works in many
places including London.

~~~
inopinatus
This really sounds like a galloping case of "I can't imagine how it can work,
so it can't work".

~~~
dogma1138
No that is we have models that work and models that do not.

~~~
inopinatus
Sure. Neither are bounded sets.

------
awjr
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.

~~~
avar
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.

~~~
notauser
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-...](http://blog.caranddriver.com/feds-watching-fords-run-around-on-
chicken-tax-riles-customs-officials/)

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.

~~~
avar
What would you call it then? Market failures can also be created by
ineffective regulation, as is the case in my example.

Considering the substance of the transaction isn't a viable strategy, it might
be possible at larger scales as in your Ford example, but individuals can and
will find clever ways around tariffs that are impossible for the authorities
to keep up with.

As an example, I lived in a European country where import tolls on bicycles
were much higher than the import fees on spare parts, so if the price of
shipping was low enough you could simply ask the seller to send over a bike in
multiple packages marked as spare parts to evade the import fees.

How are you going to detect cases like that with perfect accuracy? You'd need
some massive tracking system to figure out who bought what, and even then it
could be trivially evaded by me and a friend buying 1/2 of two bikes each as
spare parts and combining them after they've been imported.

------
mcv
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.

~~~
joakleaf
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
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).

~~~
mcv
Sweden is huge and very sparsely populated, though. I can imagine reducing car
use would severely limit people's mobility.

It's also noteworthy that Sweden has two major car brands: Volvo and Saab
(does Saab still exist?). That's quite a lot for a country of 10 million
people.

------
Xoros
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.

------
devy

       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...](https://www.marketplace.org/2016/01/08/world/georgia-ev-sales-
sputter-without-tax-break)

------
socrates1998
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?

------
jasiek
Denmark has the most expensive electricity in Europe.

~~~
olau
Before someone jumps to conclusions: after taxes.

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

------
kagamine
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=](https://www.finn.no/car/used/search.html?filters=)

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

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

------
iso-8859-1
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
Why would it not be environmental?

~~~
lumberjack
Disposing of nuclear waste is not trivial.

------
Grustaf
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.

------
zakk
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.

~~~
adrianN
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.

~~~
CamperBob2
_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.

~~~
doktrin
I'm not an expert on sprawl and QoL, but I'm pretty sure sprawl makes it
harder to design effective public transportation (among other things).
Likewise, the unavailability of effective public transit places a heavy
reliance on personal transportation (i.e. cars), and by and large means long
commutes in said car. Long daily commutes in a car don't sound very desirable,
and probably do negatively impact QoL.

~~~
CamperBob2
_...probably do negatively impact QoL._

With all due respect, there are about 5,999,999,998 people on Earth who didn't
ask you _or_ the grandparent poster.

~~~
mcv
Should people only voice their opinion after the people of the world have had
a vote on whether they're interested in it? Because I don't remember voting on
your opinion either.

~~~
CamperBob2
I'm not seeing opinions being voiced in this thread. I'm seeing them stated as
objective facts.

You're entitled to your opinions, and maybe you're even entitled to your own
facts in this remarkable age in which we find ourselves living. But either
way, when you presume to speak for others, you should expect to be called out
for it. "Quality of life" is a pretty subjective thing

~~~
mcv
> "Quality of life" is a pretty subjective thing

It absolutely is, but that doesn't mean you can't know anything about it. You
can research subjective things by asking people how they feel about their
quality of life. How happy they are. It turns out that in general, people with
long commutes in areas dominated by cars are less happy than people who
bicycle to work.

~~~
CamperBob2
_It turns out that in general, people with long commutes in areas dominated by
cars are less happy than people who bicycle to work._

Hmm. Maybe you're right. That sounds _entirely_ free from the possible
influence of any additional factors.

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

------
elliotec
We need electric busses, not cars.

