Once considered one of the world-leaders in the take-up of electric vehicles, Denmark’s sales of electric vehicles have slumped dramatically in the first quarter of 2017 as the government scales back EV incentives.
Despite being considered a ‘green’ populace, and with one of the highest rates of bicycle usage in Europe, the government’s decision to apply the same tariff to electric vehicles as already exists for internal combustion cars has proved disastrous to EV sales.
Yet while Denmark's EV sales have dwindled alarmingly, the rest of Europe has seen a 30 percent boost in EV and PHEV sales, with neighbouring Sweden seeing an encouraging 80 percent increase in the sale of electric and plug in hybrid vehicles.
The reason comes down to cost. Until recently electric cars were spared the 180 percent import levy that affects petrol and diesel cars in Denmark, with the Government citing budgetary constraints as the reason for scaling back EV incentives.
In a report by Bloomberg it appears the Danish government will now revisit its policy on electric vehicles incentives to try to stem the sales slide.
"It’s no secret electrical vehicle sales have been below what we expected a year and a half ago," Danish Tax Minister Karsten Lauritzen revealed in a statement. "The agreed phase-in has turned out to be hard and that likely halted sales."
But overall the government will still look to reduce or remove incentives over the longer term with vehicle registration charges to be slowly ramped up from a 40 percent tax rate in 2019 up to a 65 percent tax rate by 2021.
The latest figures from the European Automobile Manufacturers Association reveal that petrol engines till make up the majority of the market across the European Union, accounting for 54.1 percent of sales, with diesel not far behind on 40.9 percent and alternative fuel accounting for just 4.94 percent of the total market.
The dramatic Danish EV sales turnaround comes just as after Renault Nissan Alliance Chairman, Carlos Ghosn, encouraged the Australian government to look at introducing an EV-supporting incentive to encourage EV adoption locally.