Denmark: P90D sticker price to increase 180% on Jan 1 2016

[Haddock]

Workarounds

I wonder if Tesla could still do something about that, for example. Let people buy the P90D but software limit the ludicrous mode. You would then pay 10k afterwards to get it unlocked. (Though Tesla might need to make it 12k or something like that to hedge against people deciding against it after delivery)

These rules have been here for a long time for ICE cars and every workaround has been thought of and most of them have been blocked.

What works is:
* Lease the car instead of buying it. You come out ahead for expensive cars, though there's still a lot of tax. I'm sure Tesla will be doing this.
* For exotics: buy 1-day numberplates on the days you use it. This is often done for Ferraris etc.

What doesn't work:
* Drive a German or Swedish registered car in Denmark (illegal if you are resident in DK)
* Get a chauffeur from Germany or Sweden to drive you around in a foreign registered car (illegal)
* Buy a cheaper model, then upgrade it to a more expensive model (you pay the tax due on both models!)
* Buy a car then upgrade the engine by more than 20% horsepower (you pay the tax twice)

What's unclear:
* How to tax the car if the car is bought, but the battery is leased. I have a Renault Zoe with this model (bought when electric cars were exempt). There's no equivalent for ICE cars so it's unclear how this is taxed.
* Does increasing the battery capacity 20% equate to increasing the engine power by 20% or is it like fitting a larger tank, which would normally be OK in Denmark unless it caused the car to become essentially equivalent to a more expensive model.
* How exactly the mpg-equivalent will be calculated. The press release says "based on the energy content of a kWh, which is pretty dumb, since it's 1kWh by definition.
* Might the BMWi3 with ReX motor (2-cylinder petrol engine for charging on the go) be cheaper than the pure electric?

A lot of cars used to be sold in Denmark with no car radio, because nobody wants to pay a 200% tax on a radio. You would get a radio fitted the next day at the dealership. They changed the rules to exempt radios from taxation, but that actually went away last week too. Things like that might happen again with electrics.

 

[Just a Reader]

....One thing to note is that the parties behind then law have agreed to reconsider the tax if EV sales collaps ..

Reconsider a tax? Seriously? I hope that Danish politicians are different than German ones. In Germany we are still paying the tax on sparkling wine that was introduced to pay for Kaiser Wilhelm's High Seas Fleet in 1902. The fleet has been history for almost a century but the tax is still going strong...

 

[Lannister]

This changes my opinion on the Danish government's motivation for their vehicle taxes. Their original setup was: really good public transportation, great infrastructure for bicycling, punitive taxes on cars, and an exemption for EV's. In my mind this added up to a country with a really strong environmental priority. This may be a little quixotic for a country as small as Denmark, but it's understandable and I think generally admirable.

Pulling the EV exemption makes me think that the priority is simply to discourage private transportation, for reasons of... what? It's immorally self-indulgent? I'm genuinely not sure. Wind power resources are great in Scandinavia, so their grid is pretty clean. It strains credulity to think that EV's are still too much of an environmental drain.

This leaves me really baffled. Anybody from Denmark able to clarify the government's motivation?

Hi. First post here. I'm from Denmark and I ordered my Tesla in late September. Last day of September was the absolute deadline where Tesla Denmark could guarantee delivery and registration within the current EV registration fee exempt before January 1st.

To clarify our government's motivation: The Danish car registration fee is a very old system dated back to 1924. Back then, our government decided that the import of luxury goods - cars among other things - had too large an impact on the trading balance and so the fee was invented. Today, the fee is car base price + 25% VAT + 180% registration fee. It's a huge part of the Danish economics, having a great impact on the foundation of our welfare system. When EV was introduced, our government decided it would be good to add a benefit for those "driving green" so they made EV totally exempt of registration fee - at least until the end of 2015.

Our government then discovered that too many were switching cars too fast, now people with a common income could afford a luxury Tesla for the same amount that an Audio A6 Limousine 1,8 TFSI costs here (which has the 180% fee + 25% VAT on top of base price) including myself! Some clever finance people made a calculation, that the current EV fee exempt was a money sink and so they decided to close the gap, not extending the beyond January 1st.

View attachment 97450

 

[kejsermad]

You are so wrong. In fact in Denmark we have tax on air in ice cream. This surely tells how badly and crazy things are taxed in DK. I guess nothing beats this!

 

[RobStark]

In America, our phone bill has a tax to pay for the Spanish-American War because only rich people and rich corporations had phones in those days.

Special taxes are relatively easy to introduce almost impossible to kill.

 

[Yggdrasill]

Actually smaller EV's come even cheaper after the change. Norway will also implement taxes on EV 's within a few years but they really don't have to because Norway is probably one of the worlds richest countries with a fortune above 6.000 bilions and counting so they can afford anything in this direction no matter the costs

Actually our economy isn't doing great. It's tied to the price of oil, and as the oil price is dropping, activity in the north sea is dropping off and thousands of engineers have been fired. There's also some worry as to the consequences of the Syria refugees. The expectation is 30k refugees this year and maybe as many as 100k next year. That's a 2.5% bump in the population, all of whom will need housing and all sorts of support.

Still, the plan for the most imprtant EV incentives is to start the ramp down in 2018, and maybe 5 years later they will be gone. EVs should still be affordable, though. Beyond the 25% VAT, the plan is to base the purchase tax on emissions only, NOx and CO2. (Currently also non-electric hp and curb weight also factor in, but the plan is to remove these factors from the equation.)

Isn't Norway one of the biggest markets for Tesla after the U.S.?

second biggest with something like 15.000 I think

We have been bigger. We were the second biggest but China passed us and I'm sure others will pass us next year.

Our problem is the economy, which has caused the NOK/USD exchange rate to slip from 6-ish to 8-ish over the last year. That has increased prices by almost 30%, and has pushed the Model S beyond the reach of a significant segment of the population. Luckily, Tesla launched the 70D, so Tesla should still manage to maintain a good amount of sales.

- - - Updated - - -

One thing to note is that the parties behind then law have agreed to reconsider the tax if EV sales collaps Considering that believe that current Tesla sales levels will continue with the taxes, they are likely to be very very disappointed.

Wow, going forward, do they really think they'll get meaningful revenues from the sale of Teslas?

I assumed they understood the planned tax would eliminate the Tesla sales, but that the increase in sales of other models that are more taxed than the Teslas today would add some revenue.

 

[Yggdrasill]

These rules have been here for a long time for ICE cars and every workaround has been thought of and most of them have been blocked.

What works is:
* Lease the car instead of buying it. You come out ahead for expensive cars, though there's still a lot of tax. I'm sure Tesla will be doing this.
* For exotics: buy 1-day numberplates on the days you use it. This is often done for Ferraris etc.

What doesn't work:
* Drive a German or Swedish registered car in Denmark (illegal if you are resident in DK)
* Get a chauffeur from Germany or Sweden to drive you around in a foreign registered car (illegal)
* Buy a cheaper model, then upgrade it to a more expensive model (you pay the tax due on both models!)
* Buy a car then upgrade the engine by more than 20% horsepower (you pay the tax twice)

What's unclear:
* How to tax the car if the car is bought, but the battery is leased. I have a Renault Zoe with this model (bought when electric cars were exempt). There's no equivalent for ICE cars so it's unclear how this is taxed.
* Does increasing the battery capacity 20% equate to increasing the engine power by 20% or is it like fitting a larger tank, which would normally be OK in Denmark unless it caused the car to become essentially equivalent to a more expensive model.
* How exactly the mpg-equivalent will be calculated. The press release says "based on the energy content of a kWh, which is pretty dumb, since it's 1kWh by definition.
* Might the BMWi3 with ReX motor (2-cylinder petrol engine for charging on the go) be cheaper than the pure electric?

A lot of cars used to be sold in Denmark with no car radio, because nobody wants to pay a 200% tax on a radio. You would get a radio fitted the next day at the dealership. They changed the rules to exempt radios from taxation, but that actually went away last week too. Things like that might happen again with electrics.

Interesting stuff. I wonder how this affects enabling supercharger access on 60 kWh Model S, adding Ludicrous, or upgrading the battery, as well as enabling autopilot on a delivered car... If you enable the autopilot - do you first you pay a 180% tax on an 80k USD Model S and then you pay 180% tax on the same car, only now with a basis in a 83k USD Model S?? (The reasonable thing would be to calculate the applicable tax for the more expensive model, then subtract the taxes already paid.)

- - - Updated - - -

* How exactly the mpg-equivalent will be calculated. The press release says "based on the energy content of a kWh, which is pretty dumb, since it's 1kWh by definition.

If that's how they phrased it, I assume they will calculate the gasoline equivalent.

A liter of gasoline contains around 9 kWh, so a Model S with around 20 kWh/100 km will use the equivalent of 2.2 liters of gasoline per 100 km.

 

[Lauz]

This changes my opinion on the Danish government's motivation for their vehicle taxes. Their original setup was: really good public transportation, great infrastructure for bicycling, punitive taxes on cars, and an exemption for EV's. In my mind this added up to a country with a really strong environmental priority. This may be a little quixotic for a country as small as Denmark, but it's understandable and I think generally admirable.

Pulling the EV exemption makes me think that the priority is simply to discourage private transportation, for reasons of... what? It's immorally self-indulgent? I'm genuinely not sure. Wind power resources are great in Scandinavia, so their grid is pretty clean. It strains credulity to think that EV's are still too much of an environmental drain.

This leaves me really baffled. Anybody from Denmark able to clarify the government's motivation?

It is quite simple (and sad). The following Quote is from the danish minister of taxation:

"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.

We invented the law of Jante.

https://en.m.wikipedia.org/wiki/Law_of_Jante

and now it shows it's ugly face once again...




- - - Updated - - -

To clarify our government's motivation: The Danish car registration fee is a very old system dated back to 1924. Back then, our government decided that the import of luxury goods - cars among other things - had too large an impact on the trading balance and so the fee was invented. Today, the fee is car base price + 25% VAT + 180% registration fee. It's a huge part of the Danish economics, having a great impact on the foundation of our welfare system. When EV was introduced, our government decided it would be good to add a benefit for those "driving green" so they made EV totally exempt of registration fee - at least until the end of 2015.

It does not have a big impact on our welfare system. The total yearly revenue from the 180% + 25% tax on all cars (ICE + EV) is 16 billion kr out of a total government budget of 1.100 billion kr.

In other words, 1,5% of the total budget. Not exactly a huge amount...

 

[Yggdrasill]

One issue occured to me:

Is it even legal according to EU regulation to perpetuate the FCEV incentives while the EV incentives are phased out? I thought these rules had to be technology-neutral, or it would by definition be a discriminating tax system. I don't see any legitimate reason to perpetuate the FCEV incentives while the EV incentives are phased out. The only reason why the EV incentives in Norway are allowed by the EFTA Surveillance Authority is because this is zero-emission technology. But FCEVs use 2-3 times as much energy per km, and are no better in the production phase, so this can't be used as an argument. You can't incentivize *less* evironmentally friendly alternatives while punishing *more* environmentally friendly alternatives. That's my understanding, at least.

 

[mwulff]

As a dane with a Model S I am sad to see this tax go into effect. But there was only one contributing factor that caused this new tax and that was the Model S.

Let me try to explain my point of view. Before the Model S then only electrics available where short-range and generally small junk-cars converted by manufacturers who didn't really want to build them. That market was too small and uninteresting to tax.

Now along comes the Model S and we suddenly have a car that the middle-class can afford (barely) and they start flying off the shelves because most danes really want to do right by the environment. So now our politicians see that we can buy luxury, comfort and style without paying the tax-man, and in a country where everybody is jealous of everybody else this is can't be allowed to continue.

So now they launch the debate where the Model S is presented as a tax-break for the ultra-rich. Never mind that studies show that mostly middle-class people own a Model S and that they stretched themselves to get it. The Model S becomes the symbol of elitism and wealth, both which are frowned upon, if not despised actively. They don't succeed except in the press, but that is enough for them to cancel all ev-tax breaks.

So they sit down and design a system that punishes expensive evs (regardless of environmental impact) and the specifically target the price point of the Tesla. They argue that all Model S buyers who bought a $125k Tesla would have bought a $365k S-class instead thus costing the government a about $1 million a year in lost revenue. Never mind the fact that many people who could afford a $125k car can't pay $365k for it.

So now we have a tax-system that rewards small junk ev's like the Leaf, because they are mostly bought by the government for local work and the only practical "primary car" ev available will be taxed to death.

Expect to see all sales in Denmark stop 31.12.2015. We will have to wait 10-20 years for ev technology to become cheap enough for our tax-system. Maybe with the luck the Model 3 can be made cheap enough to fall below the "tesla-punishment point" in the new tax-code, but I believe they will lower the point if that happens. Danes can't have untaxed luxury.

Personally I'm sad because I want everybody in this country to have access to cheap long-range electric vehicles over time. But these decision have turned back the clock on our local ev revolution by about 20 years I think.

 

[1208]

So you people are just going to allow this immorality to happen? And yet they call your Viking ancestors barbaric.

 

[AndersH]

So you people are just going to allow this immorality to happen? And yet they call your Viking ancestors barbaric.

There is a saying about the Danes that the revolution was cancelled because it was raining. Our acceptance of absurd taxes all stem from a very strong sense of community. We're all benefiting from the system, including myself as a parent and someone whose father had a long battle with cancer, which would likely have bankrupted the family, had it not been for free healthcare.

However, there is a change of public opinion when it comes to car taxes, so hopefully a reform will become voter bait at some point.

 

[schonelucht]

* Get a chauffeur from Germany or Sweden to drive you around in a foreign registered car (illegal)

This is very much against EU rules on free flow of goods and services. I am curious how the Danish government is able to make this illegal.

 

[Seesaw]

There is a saying about the Danes that the revolution was cancelled because it was raining. Our acceptance of absurd taxes all stem from a very strong sense of community. We're all benefiting from the system, including myself as a parent and someone whose father had a long battle with cancer, which would likely have bankrupted the family, had it not been for free healthcare.

However, there is a change of public opinion when it comes to car taxes, so hopefully a reform will become voter bait at some point.

You can still have free healthcare and not pay 205% tax on cars. Where I live we pay 10% and have excellent free health care. When goods and services taxes become so punitive revenue can actually decrease as consumers stop buying (or they buy cheaper items to minimise tax).

i must admit you can't compare across countries as they all have different priorities and I know the Danish have a generous welfare system that would certainly be expensive to fund.

 

[PBP]

In Denmark we dismissed the King absolutism in the mid 18.th Century, one reason being that the tax burden was too heavy. At that time we on average paid 10%. Today we have the honor of having full democracy and paying 58% in tax and additional 25% vat. AND NOBODY's COMPLAINING! We forgot to add in our constitution at that time that the state could not tax more than 10%!

 

[AndersH]

You can still have free healthcare and not pay 205% tax on cars. Where I live we pay 10% and have excellent free health care. When goods and services taxes become so punitive revenue can actually decrease as consumers stop buying (or they buy cheaper items to minimise tax).

I fully agree. Just look at Sweden, for example. I'm just trying to explain why Danes generally accept the high taxes. Me personally, I used to be against any sort of tax, but as I have grown older, I have no issue with the income taxes that I pay. Unfair taxes on goods like the car registration tax and pointless taxes on businesses, that I am absolutely against. But generally, I am happy with our system. As are most other Danes.

 

[dhanson865]

I fully agree. Just look at Sweden, for example. I'm just trying to explain why Danes generally accept the high taxes. Me personally, I used to be against any sort of tax, but as I have grown older, I have no issue with the income taxes that I pay. Unfair taxes on goods like the car registration tax and pointless taxes on businesses, that I am absolutely against. But generally, I am happy with our system. As are most other Danes.

Maybe it's because the way they think about numbers? Just a Number - Scandinavia and the World

Some Americans might consider that site close to NSFW but it's tame by comparison to most of the internet.

 

[ozweepay]

Expect to see all sales in Denmark stop 31.12.2015.

I think another poster (a Dane) said you had to order by 30.09.2015 to guarantee delivery in time to avoid the new registration tax. So Tesla is already unaffordable now in DK, unless you are ultra-rich.

If the Tesla wasn't a symbol of extreme wealth before, it surely is now.

This makes no sense: the Model S does not feel like a luxury car to me. If feels futuristic, and it feels fast and responsive, but my friend's with their high-end BMWs, Mercedes, Range Rovers have a much more luxurious interior than my Model S has.

So Denmark has now put the Model S into the same category with these luxury cars. Tragic. Because really they should be giving rebates on Model S purchases (like the US currently does). The Danish government could make these cars very affordable for the middle class, and thereby make them commonplace (to soften the Jenke's Law effect). Instead they have done the reverse and made them symbols of extreme wealth, exacerbating the problem instead of ameliorating it.

No long distance EVs are available at an affordable price in DK now. Wow.

We will have to wait 10-20 years for ev technology to become cheap enough for our tax-system. Maybe with the luck the Model 3 can be made cheap enough to fall below the "tesla-punishment point" in the new tax-code, but I believe they will lower the point if that happens. Danes can't have untaxed luxury.

I would argue that Tesla is not a luxury brand. Especially if the Model 3 delivers at $35,000 US.

Personally I'm sad because I want everybody in this country to have access to cheap long-range electric vehicles over time. But these decision have turned back the clock on our local ev revolution by about 20 years I think.

I'm sad too... I have long looked to Scandinavia as a model for how smart people run their countries... not on this point, however.

 

[jdbob]

From the Local.dk

Not sure if this adds anything, but ran across this article:

http://www.thelocal.dk/20151012/tesla-to-fight-denmarks-tax-on-electric-cars

 

[RobStark]

In Denmark we dismissed the King absolutism in the mid 18.th Century, one reason being that the tax burden was too heavy. At that time we on average paid 10%. Today we have the honor of having full democracy and paying 58% in tax and additional 25% vat. AND NOBODY's COMPLAINING! We forgot to add in our constitution at that time that the state could not tax more than 10%!

Colonial Americans launched a Revolution over a 2% tax on Tea.

Now the top marginal income tax rate is 39.6% plus State and Local taxes that can be as high as 10%.