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Peter Schmidt | Editor

Published: Fri, 20th July 2018 18:06:15 GMT

Sweden Bonus-Malus Tax Editorial

"There are no two ways about it. Left to the free market BEVs are going nowhere fast until prices are halved, real world driving range climbs to say 400 plus kilometres and the crucial recharging system is a great deal more dense than today. One further element needed for success is legislation to help the course without an undue burden on the public purse. So much for the theory. 

And yet, with a large helping hand, as today’s Norwegian car market illustrates only too well, BEVs will capture a substantial chunk of today’s car market. 

This first-half BEVs alone captured a quarter of Norway’s new car market. 

Moreover, plug-ins (BEV & PHEVs) alone took almost half of Norway’s half-year car sales. 

In consequence, with the right carrot & stick and within a comparatively short period of time BEVs can not only flourish, but actually dominate a country’s new car buying. 

Norway illustrates that change is possible, but whether the price paid for it is both just and affordable is an altogether different question. 

Norway is the one stand-alone exception. 

On the other end of the spectrum, effectively representing the rest of Western Europe is today’s German market. 

Despite on-going financial incentives of €4,000 and more than half a year of tempting diesel scrappage incentives, at this year’s halfway point BEVs were responsible for just 1 per cent of Germany’s new car market. 

The rest of Western Europe performed little better and some still did a great deal worse. 

The UK is a case in point. 

Halfway through the year and the UK’s BEV car sales penetration has reached an unchanged 0.6 per cent. 

Looking at latest real-world market developments suggests that the only real way to get a meaningful BEV share is to follow the Norwegian example on the one hand, or China’s dictate for an obligatory BEV sales share. 

Norway’s subsidy scheme and the sky-high cost of creating the right BEV ownership conditions are unaffordable and politically unacceptable in the rest of Europe. 

Nevertheless, Norway still illustrates that new car buyers, given the right conditions will make the switch. 

The change-over to plug-in vehicles can be accomplished comparatively quickly. 

If the evidently working Norwegian model shows the way forward, the questions to be resolved are the ethics of funding such a generous BEV subsidy scheme. 

Norway’s Swedish neighbours, looking enviously over the fence, are probably equally keen to move en-masse to ultra-low CO2 motoring. 

But Sweden’s government is now trying to get a similar big switch as Norway, but with an altogether different tack. 

Credit to some of Sweden’s visionaries. 

Their decision to finance the switch, say during the next three years by way of a huge hike in annual vehicle taxes from conventionally powered cars registered after July 1 this year, could conceivably lead to a notable and fast Norway-type switch to ultra-low emission cars. 

All those driving cars already registered before July 1 this year will not be paying these higher new vehicle taxes. 

It looks positive and could work. 

Significantly, nobody could accuse Sweden’s government of employing the working man’s tax to subsidise today’s trendy and status-rich Teslas parked chiefly in the drives of Sweden’s most affluent conurbations. 

Nothing is perfect. 

But in our imperfect world, where talk often speaks louder than deeds, the Swedish experiment starting July 1 deserves to succeed. 

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