Denmark Plans Sharp Hike in Taxes on EVs

Denmark, which has been Europe's showcase for pro-electric vehicle policies in recent years, is reversing course and dropping its tax-exempt status for such vehicles, Bloomberg News reports. The news service cites drafts of the country's 2016 budget.

The change will boost the sales tax on EVs from zero to 180% of their sale price. The result, Bloomberg notes, will hike the price of the country's best-selling EV, the Tesla Model S sedan, from 650,000 kronor (€87,100) to about 1.8 million kronor (€241,300). EV sales in the first half of 2015 nearly doubled to 1,200 units, according to industry group ACEA.

Denmark's dramatic shift reflects the philosophy of the country's current government, which regards the policies of the previous administration fiscally irresponsible. Denmark aims to generate nearly 30 billion kronor (€4 billion) in car taxes next year, including an estimated 450 million kronor (€60 million) from formerly exempt EVs.

The draft budget also intends to abandon the previous government's plan to tax nitrogen oxide emissions, Bloomberg says. The Tax Ministry estimates that dropping the goal will save the country's businesses 240 million kronor (€32 million) in 2016.

Earlier this month the government said it was scrapping a national goal of becoming fossil-fuel free by 2050.