Netherlands Will Become Less Friendly To Expensive BEVs In 2019

JUL 28 2018 BY MARK KANE 65

Netherlands is experiencing a boom in all-electric car sales, but changes on the horizon will bring another rollercoaster.

The market more than doubled so far this year and as it turns out, Tesla is the market leader with Model S on top (1,763 YTD) and Model X in 4th (1,045).

The appetite for Teslas, or in general expensive all-electric cars, is explained by upcoming changes of the BiK tax from 4% to 22% for BEVs that costs more than €50,000 from January 1, 2019 (the 22% applies only to amount above amount of €50,000).

As the overall cost will then be significantly higher than it is right now, the second half of the year should see an explosion in purchases of more expensive all-electric cars. On the other hand, following changes, there will be a collapse of sales of BEVs above €50,000 early next year.

We saw similar behavior for the plug-in hybrid market a few years ago (see peaks on the graph when PHEVs were very attractive from a tax point of view).

IEVs reader Seth provided us with some example calculations that shows how the 22% BiK tax affects BEVs (above the amount of €50,000):

Plug-in electric car sales in the Netherlands – June 2018

“Regarding the Tesla sales in the Netherlands: There is currently a rush for Tesla as well as Jaguar with the I-Pace to get their product shipped before 1-1-2019 when the new BEV tax limit of 4% upto 50k euro becomes effective. This also makes the Jaguar I-Pace (starts at 83k) a difficult proposition.

You add 4% over 50k (2000) and 22% over the remaining 33k (7260) to your income. This means a net cost of about (9260/2) 4630 euro a year, or 385 euro’s a month. For comparison, that is cheaper then a VW Passat (diesel, with 150hp).

So yeah, the market share won’t be nill, but it will definitely take a hit. If the current premium Tesla Model 3 at 59k euro would enter the market it would still be cheap at ((2000 + 4400)/12)/2 = 265 euro/month. For basically a 300hp sedan.”

Hat tip to Seth!!!

Categories: General, Tesla

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65 Comments on "Netherlands Will Become Less Friendly To Expensive BEVs In 2019"

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Mark.ca

First we complain about evs looking like ecoboxes hence not buying them. When manufacturers finally make cars worth buying we kill off the market by taxing them to death. Questions?

Mark.ca

Very few arguments left against Trump’s push on tariffs…

Bla blubb

Really? Should the Netherlands be obliged indefinitely to incentivize an American car (and other electric cars) for the upper class? Sorry, you just don’t get it.

Mark.ca

I feel the same in regards to anything they sell in US, no matter if the rich or poor are the targets. Let’s tax them at the same level and level the play field.

REXisKing

Would love to do that, the oil and coal industry have the BIGGEST Subsidies in the World. Cut them to zero and you need no electric subsidy. We’re talking about more than 10 times bigger subsidy.

Don’t forget the US Navy Fleet in the Med keeping safe oil shipping lanes. Can you imagine the savings if we didn’t have to keep oil lanes safe?

Mark.ca

Will never happen. Our country is for corporations by the corporations. Tax money needs to be spent. It’s the big corp motto….”you gotta spend (tax) money to make money!”

Derek

It’s about a whole lot more then oil lanes, commerce in general, is vital for any modern country. Besides, the US has plenty of oil & nat gas.

Will

Nope. Don’t agree. Upper income families the flat tax is nothing to them. It’s been proven as well The with lower and middle class incomes a flat tax are regressive to to families and take out more money out of thier pockets. 20% Upper, 15% middle class. Lower class 10%. No loopholes and deductions are eliminated

Mark.ca

I say we tax the rich at 50% so the poor don’t have to work because they are already in a difficult position. Middle class Ohio is lower class in CA so how do you address that?

Mark.ca

And with 21 trillion in the red your 20, 15,10 plan would do wonders for future generations.

menorman

With state tax rates.

Mark.ca

Fix a tax problem by taxing it…i like it!

Robb Stark

The “American” car is assembled in The Netherlands. Where Tesla’s European headquarters are located and where its only European assembly facility is located.

The Dutch government is, in effect, helping dirty German Diesel cars at the expense of Dutch-American clean EVs.

Very stupid. At least it is not a Danish rate of 120%.

Vegan001

It is no battle of with the american cars. That is just in your head. I think that you can see more Tesla’s per square mile in the Netherlands than in many places in the USA. They are pretty much everywhere.
Diesels have much higher taxes. You have also an engine tax here. And for a diesel equivalent of a gasoline Jetta you would have to pay about 600€ more per year in taxes.
The tax system is different here and you can’t judge what you don’t know. If you have a higher income you pay a higher tax%, if you buy a more expensive house or car, it is the same.
The richer pays more, the poorer pays less. Simple as that.

Will

It’s the same tax structure

REXisKing

If you calculate the health benefit of taking off big high-horsepower gas vehicles and replacing them with Tesla, then the answer is ABSOLUTELY Yes. Especially as these EV will us LOCAL Electric Power, meaning a growing power Local Economy and the “velocity of money” effects on the local economy, than again: Absolutely.

You right now breath the pollution of high-horsepower gas engines for free. Your health is a subsidy to gas.

Benedictus

This has nothing to do with tariffs or Trump or the US. This is actually very good for the US, because a lot of Tesla sales will probably be pushed forward to 2018 to take max tax cuts. And in 2019 Tesla will be able to sell the Model 3 like hot cakes.

But yeah there will be competition. Hyundai/Kia will probaly have a good year with the Kona / Niro EV offerings. Those are not European cars, again nothing to do with tariffs.

Sad to see that the Trump style has such a polarising effect on some people.

REXisKing

Well the level of incompetence is extreme. The yearly US budget deficit will soon hit 1 TRILLION DOLLARS a year. Aside from Trump starting a global trade war, with all other countries at the same time. If you vote for someone who talks like a 5th grader don’t be surprised by 5th grader comprehension of issues.

Bla blubb

You do understand that a sales incentive is being cut? All other cars are taxed the same.

Mark.ca

At 20+%…yes, i know. Compare that to what we have in the states and see the problem.

Benedictus

What do you mean compare to the states? You only have that 7500 credit to support EV uptake. How is that better? Please don’t get things mixed up. This has nothing to do with import tariffs Trump is talking about.

It is true that we have a CO2 tax in the Netherlands. If a car is a gas guzzler. It will be taxed to death. That is the real threat to any new car wherever it comes from. That is also the reason we have a lot of <2L and even a lot of 1 Liter engines on the road.

REXisKing

And they got around the engine size issue, with high rpm’s and turbo chargers.

Benedictus

Nothing to do with taxing EV to deatch. All cars above 0 grams co2 emission are taxed 22% over full price. So EV is always less tax over the first 50k sales price. Also fuel cell vehicles do not have this limit yet.

NOTE: This is purely an income tax issue for business drivers that drive a company car. But business drivers do take a large part of car sales.

The initial sales price for ev is also taxed lower than ICE, because there is an added tax based on CO2 emissions. BEV is zero emission, so no added CO2 tax.

EV is still stimulated, but now there is a cap on it. Seems very reasonable to me. The budget is not unlimited and the business lease public is very sensitive to these tax breaks. So with many cars coming to the market this is the right thing to do.

Mark.ca

Sure, i heard the reasoning before, the rich have too much money anyway and they don’t need to be rewarded for driving evs. Very logical argument.

Benedictus

Nothing to do with rich vs poor. It’s based on purchase price. It has everything to do with budget. Incentives are always changing with changing market conditions. Incentives are used to get the market going. When the market matures, the incentives fade.

Mark.ca

Nothing to do with poor vs rich? Then why did you edit what you originally said?

antrik

While I agree with the sentiment, it should be noted that a constant reduced tax rate means more expensive EVs effectively get a much larger incentive than cheaper EVs, which is arguably not really fair.

Mark.ca

So? Is our US system better? A Smart gets 35% off due to the fed credit while a Bolt gets 20%. Which will be driven more? How is this getting more bang for your buck?

antrik

The point is that EVs aren’t more expensive than combustion cars by some specific percentage. A tiny entry-level EV costs as much as 50% more than a similar entry-level combustion car; while the percentage difference is much much smaller for premium cars.

It can be argued that the incentive should be scaled somewhat by battery size, since that’s the main cost driver. (The US system does so in theory — it’ s just the thresholds are poorly chosen…)

menorman

The rich are free to buy cheaper options if they want to take full advantage of this incentive in the future.

REXisKing

The rich create pollution everyone has to breath and they create 5 to 25 times more pollution.

menorman

Certainly, and if they want to get a big discount, they know what they need to do. As it stands, the vehicles impacted are still going to be cheaper than their comparable competition, just not as cheap.

Will

No, they can afford the vehicle due to thier work ethic and great credit rating that they don’t need a tax subsidy from the government to buy a car. And most of them will vote republican anyway just to kill the tax credit

Mark.ca

It was never about providing affordability, it’s always been about providing cars to masses that are competitive in PRICE with the ice versions. The poor are not the ones buying them anyway that is the only reason why CA is even discussing point of sale credits. I dare you to fing a low income person that bought a $30k car. So what if the rich don’t need it, that is not the point and scope for the credit. Rewarding good behavior should not be discriminatory.

menorman

Surely you’re aware that California has probably the only incentive program that is tailored to the not-so-rich? Those above a certain threshold aren’t eligible for the State rebate and the reason for making it a point-of-sale incentive is precisely so that those lower on the income scale can afford them too.

Mark.ca

True, i forgot they capped at $150k per individual for the state rebate. I think you missed part of the message i was trying to relay…the poor should not buy $30k cars. Spending most of your income on a depreciating asset is not how you get out of a hole. I have been there.

Gazz

What about the Leaf, Zoe and all of the reasonable looking and affordable non premium EVs? The Kona EV and e-Golf are normal cars.

I think a fanboy is in the room.

Mark.ca

I drive a eGolf, duche. And i must say, what an impressive selection you listed! A car for everyone.
We are simply not in position to discourage any evs at this point in time.

Will

It’s not discouraging. It’s fiscal policies

Mark.ca

It’s fing bs! On a lower scale of what Germany is doing but they will get there eventually.

Will

They should be a extra road fee on registration and renewals for EVs and Phev since we are not paying into it and since we are not using gas for the roads. As for the tax credit, it should be done away with and let the states deal with incentives and subsidies and let out of state buyers take advantage of the incentives

Mark.ca

What are you talking about? CA is the biggest market and they have added the fee to the DMV registration. What’s the rush anyway, we are only at 1%!

menorman

What are you talking about? Plug-ins were over 5% of sales in California in 2017 and will be coasting to around 8% for 2018, which will be the last year of single-digit market share.

Mark.ca

Nationwide. He is not from CA.

Benz

The Dutch Government seems to be very keen on a push towards a Hydrogen Economy. More details will be made public as soon as the Dutch Government makes decisions on the key steps to realize a Hydrogen Economy.

Too bad

REXisKing

Hydrogen is a carbon solution. Aside from a rolling bomb for terrorists. The oil industry would love to make hydrogen from natural gas and charge you double or triple.

EVShopper

I’m a little confused. The Bik Tax seems to be related to private use of a company car and is at 26% for ICE cars. This change doesn’t seem like a big deal for most people?.

Also, they have a BPM tax based on CO2 emissions, which EVs are exempt for.

Benedictus

It’s only a big deal for people that lease or buy a luxury EV that costs way over 50K. They have had very low taxation for a long time now and some can’t get a new Model S or Model X or I Pace or Mission E of E Tron in the future because a few hundred euros a month extra does not fit in their budget.

For those people it’s get a new contract now, or shop for a cheaper car in the coming years.
I get the depression these people get. They don’t want do go from a Model S to a Kona or Model 3.

But if we want to keep incentives in a growing market on the same budget, we need lower incentives. That’s how it has always been. Incentives go away of get smaller when the market becomes self sustaining. That is the goal.

REXisKing

You shouldn’t remove the incentives until you have 51% market penetration of EV’s. Then you would see huge health benefit savings. Even today the health savings might be covering the incentive in real time, especially in cities.

And apparently no one has looked at the growth of use of Local Electric Power and the economic benefit? There should be significant “velocity of money” benefit. Where local utilities are making more money, which you probably tax, and adding more jobs to the company staff. And those additional people, buy food, pay rent, go to movies, and buy stuff from other business in the local economy.

Whereas, if you remove that, you get more benefit going to an oil company, and lower economic growth.

EVShopper

But it is not for anyone that buys or leases. It’s if they get a company car that they drive for personal reasons.

SteveSeattle

The article suggests the tax will remain the same on the first 50k, so it looks like BEVs will still be taxed lower than ICE vehicles.

Golgoth2020

The only people upset are Tesla bulls.

People who make affordable EVs are fine.

Chris O

You mean Tesla which will be extremely fine with a Model 3 that fits the Dutch new tax structure like a glove with no serious competition even remotely in sight.

menorman

The under €50k space is exploding and most of the options in it are already facing long waiting lists.

Chris O

Many sub $50K gas cars too, doesn’t mean they are all BMW 3 Series competitors. The point is: no direct Model 3 competitors in sight, only inferior products that aren’t even all that if at all cheaper than entry model Model 3 will be.

Name

VW Neo will start end of 2019, probably same time Model 3 arrives in Europe. So competition for Tesla will be huge. This VW thing will sell like candy in Europe.

notting

When the German EV incentitive started (“Umweltprämie”, when buying one), Tesla fans complained about the “anti-Tesla limit” of 60kEUR without VAT = 71,400EUR with VAT (19%). The limit in the article is lower…

notting

REXisKing

Tesla bulls use local electric power creating local jobs.

Vegan001

It is a normal thing to do. There is no logic in offering deductions on super expensive cars. People who have that kind of cash can pay their taxes.
You (will) have enough alternatives with the Renault Zoe, Model 3, Nissan Leaf, VW ID Neo and others to come.
It is good to try pushing the prices down a bit.

REXisKing

“There is no logic in offering deductions on super expensive cars”
— F in Economics —

JoeInTheUK

This is a somewhat misleading article unfortunately.
It gives the impression the tax is oniy about BEVs (it isn’t, it’s all cars irrespective fuel source, above the price limit) , and the tax is on all BEVs purchased/leased (it isn’t, it’s only on cars bought/ leased via an employer)

Name

We Teslafanboys must perform exorcism on the Netherland government.

EDude

The Model 3 will come out in Europe in 2019 and won’t be affected. EVs are gonna be mainstream soon and it makes sense for them to not necessarily spend all their Tax earnings on rich people buying luxury cars.

vdiv

Well, there is always the used car market.

Derek

Tesla’s going to have a tough road in a year or 2. They currently dominate the EV world, in large part because they are the only big player in town (outside of China). But that’s gonna change rapidly. Hope they survive, but it won’t be as easy going forward.