Tesla’s electric cars are in high demand across the world. However, with increased demand comes a high price tag in some countries, and governments are combating the astronomical cost of electric vehicles due to taxes in an attempt to increase the number of EVs on the road.
On Monday, a panel presented numerous recommendations to the Danish government on how the prices of electric cars could be lowered. Some suggestions included lowering mandatory taxes like registration on EVs, higher fuel prices for combustion engines, and higher road taxes for vehicles that use gas as a source of fuel.
Electric vehicle taxes in Denmark have undoubtedly stopped some citizens from purchasing eco-friendly cars, as prices soar through the roof when these fees are applied. The mandatory taxes are among the highest in the world for electric cars, even though Denmark has long fought for the title of one of the world’s most environmentally friendly countries.
The Model 3 Long Range All-Wheel Drive, for example, will cost Danish citizens nearly $100,000. More than 20% of that cost comes from taxes, according to Berlingske, a Danish media outlet.
Denmark collects about $8 billion in taxes annually from the sale of cars. However, a majority of parliament members state they would be willing to accept less revenue from taxes on electric cars if it meant they would be more affordable for citizens to drive.
The head of the panel who presented the argument is Anders Eldrup, a former CEO at Orsted, an energy utility company.
“We need to change the way we think about car prices,” Eldrup said, according to Automotive News Europe. “Electric cars might be more expensive, but can be cheaper in terms of overall costs.”
Tesla is working to make its electric vehicles, which lead the industry in range and performance, cheaper for consumers. The company can do this through increased battery cell manufacturing, which has been a central focus for several years.
Denmark, on the other hand, has worked to cut carbon emissions by 70% by 2030. In June, the country’s government came to an agreement that emissions needed to be sliced to combat climate change. Other countries around the world have their own goals for cutting carbon emissions down by a specific date.
Electric cars could play a substantial factor in lowering emissions levels from the environment. But before that can be done, the vehicles need to be affordable for citizens to buy. Removing the taxes will increase the likelihood that consumers will buy the cars. In turn, emissions levels will decrease substantially with more electric vehicles on the road.
Denmark’s parliament will hold a discussion about the possibility of revising current tax laws in the country that apply to electric vehicles soon.