10 Dec 20

Denmark to add 775,000 EVs by 2030

Denmark has decided to support the addition of 775,000 BEVs and PHEVs to its national fleet by 2030. This is projected to reduce CO2 emissions by 1 million tons by 2025 and by 2.1 million tons by 2030. The move is part of Denmark's ambition, announced in September, to reduce CO2 emissions by 70% by 2030 and become entirely carbon-neutral by 2050.

Under the plan, buying a BEV or PHEV will mean paying significantly less registration tax. Denmark is infamous for its high car and road taxes, which bring in around DKK 50 (€6.7) billion each year, representing 2.3% of the country's GDP. Reducing the registration tax for EVs and PHEVs therefore represents a major incentive. 

Buying an EV in 2021 will result in an average reduction of DKK 81,400 (€10,937) in payable registration tax. Over the next few years, that advantage will diminish, increasing the incentive for consumers (and corporates) to switch sooner rather than later.

  • From 2021 to 2025, zero-emission cars will have to pay only 40% of the full registration tax. This share will then increase by 8 percentage points per year (pp/y), to 80% in 2030. As yet unconfirmed is the plan for a further rise by 4 pp/y to 100% by 2035.
  • PHEVs and other cars emitting less than 50 g of CO2 per km will start at 45% registration tax in 2021, which will increase by 5 pp/y to 65% by 2025, and then 3 pp/y to 80% in 2030. The share will then probably increase by 4 pp/y to 100% in 2035. 
  • Additionally, the electricity for charging EVs will be taxed at a lower rate, saving EV owners an average of DKK 2,550 (€343) per year.

The parties involved in the deal will take stock in 2025 to discuss whether further measures are needed to incentivise the shift to electric mobility in order to achieve Denmark's CO2 reduction targets. Earlier, Denmark had proposed banning the sale of new petrol and diesel cars from 2030, but that is not legal under current EU law. 

Pictured: car traffic in downtown Copenhagen (image: Shutterstock)

Authored by: Frank Jacobs