Denmark reveals the lack of competitiveness of the electric car

Ventas de coches eléctricos en Dinamarca

sales of electric cars in Denmark fell by 60.5 per cent in the first quarter of 2017.

Recently, my colleague Sergio has published an interesting article regarding a study that anticipates what the year electric cars will equal in price to the combustion. Currently, there is a barrier almost insurmountable between both types of vehicles. A difference that can be overcome today thanks to the grants and different incentives that governments put in place.

But, what happens in those countries where they are removed in large measure these payments to the purchase of electric cars? As might be expected, that sales will plummet. The electric vehicles of Tesla or other brands are targeted to a particular audience, but are out of reach of the vast majority of middle class families.

situation that we are currently experiencing in Denmark is a perfect example that defines this situation. During the first quarter of this year sales of electric cars (including battery and plug-in hybrids) experienced a fall at 60.5% with respect to the same period last year, according to data provided by ACEA (Association of European Automobile Manufacturers).

Ventas de coches eléctricos en Dinamarca

Denmark began in 2016 to check out the aid and incentives for the purchase of electric cars.

The contrast with other european markets is remarkable. In Sweden, during the period January-march 2017 enrolment of electric went up 30%. Sales of electric cars continue to have a high dependency on aid or incentives are available. Otherwise, they have almost impossible to compete with combustion vehicles (leaving to one side the niche market of luxury). From the autumn of 2015, the government of Denmark led by prime minister Lars Løkke Rasmussen announced the progressive withdrawal of tax exemptions and other subsidies related to electric vehicles.

By that time the sales of this type of vehicle were fired, but in a market where the price does matter, the situation has completely changed. The Danish government wants to equalize tax exemptions for electric cars and combustion of face to the year 2020 to be treated the same way. At least fiscally.

Tesla is one of the brands that are most affected, and in particular its Model S. Many manufacturers are discouraged from betting on the Danish market, and although it will continue to operate as normal, expect that, once again the aid and incentives, sales of electric cars resume their normal pace of growth, “normal”.

Ventas de coches eléctricos en Dinamarca

In this graph we see the evolution of the Danish market since the start of the withdrawal of aid. Chart: Bloomberg.

In the graph that we have just above, we can see clearly the change of trend in the Danish market once it began to withdraw the tax exemptions and other subsidies for the purchase of electric cars. It is unquestionable that, until an equalization of prices real, the sales of these vehicles will continue to rely on governments turn. Manufacturers must continue to invest in the development of new batteries more efficient, durable, cheaper, and with greater capacity to store energy.