It’s Confirmed: Without Government Subsidies, Tesla Sales Implode

According to the latest data from the European Automobile Manufacturers Association (ACEA), sales of Electrically Chargeable Vehicles (which include plug-in hybrids) in Q1 of 2017 were brisk across much of Europe: they rose by 80% Y/Y in eco-friendly Sweden, 78% in Germany, just over 40% in Belgium and grew by roughly 30% across the European Union… but not in Denmark: here sales cratered by over 60% for one simple reason: the government phased out taxpayer subsidies.

The Denmark case study is emblematic of where the tech/cost curve for clean energy vehicles currently stands, and why for “green” pioneers the continued generosity of governments around the globe is of absolutely critical importance, and also why Trump’s recent withdrawal from the Paris Climate Treaty is nothing short of a business model death threat.

To be sure, Denmark’s infatuation with green cars is well-known: the country’s bicycle-loving people bought 5,298 of them in 2015, more than double the amount sold that year in Italy, which has a population more than 10 times the size of Denmark’s. However, those phenomenal sales figures had as much to do with price and convenience as with environmental concerns: electric car dealers were for a long time spared the jaw-dropping import tax of 180 percent that Denmark applies on vehicles fueled by a traditional combustion engine.

Then, in the fall of 2015, everything changed: that’s when the government of Prime Minister Lars Lokke Rasmussen announced the progressive phasing out of tax breaks on electric cars, citing budget constraints and the desire to level the playing field. In retrospect the “leveling” effectively nuked the market: the chart below shows the total collapse in sales following the elimination of subsidies.

Nobody was hurt more than Tesla: the company, whose sales were skyrocketing at the time, lobbied against the move, with CEO Musk warning during a visit to Copenhagen that sales would be hit. It wasn’t clear if the warning was targeting the government, the people of Denmark, or his own bank account and shareholders, but he was absolutely correct: in 2015 Tesla sold a total of 2,738 cars in Denmark. In 2016 the number dropped by 94% to just 176 units.

https://gab.ai/zeitgeist2012/posts/8754953

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