Insane Dane car give-away?

According to “The official Website of Denmark” the Danish government is intending to forgive the 180% registration tax, knock 40% off of the automotive insurance premium, and proposing free parking – in downtown Copenhagen, no less – for buyers of electric cars, according to a Streetsblog post by Charles Komanoff.

This is a stunning give-away. The 180% registration tax, alone is worth about $40,000. And after a few years free-parking would be worth even more.

Perhaps they can provide a driver, too.

This can’t be happening as alarmingly reported. The Danes are just not that stupid. This has to be time limited and meant to incentivize early adopters. Just like the US quadrabizzillion dollar CARS give-away was a temporary bail-out for Detroit's (now the American taxpayer's) internal combustion industry.

Somebody, please tell me I've got this part right.

~~~~

Looking a bit further, according to this article, it appears that electric cars have been registration tax-free in Denmark for 25 years. And according to the same article, in spite of this $40,000 tax-relief there are only 500 electric cars registered in Denmark. Out of 2.7M vehicles, that is 0.02% of the fleet, I suspect similar to the stats in most western countries. The unsurprising reason given is that consumers experience “…a psychological barrier … when their car is dependent on a battery station”. Makes sense.

But the government and some partners, notably Shai Agassi’s “Better Place” are outfitting the country with charging and battery-swap stations, at $100M. Hence, the tax-parking-insurance breaks are only half of the picture.

So, given that large investment, the Danes need a rapid uptake of the new cars and the new infrastructure. They need people to switch from ic-cars to e-cars, NOT from transit or bikes to e-cars.

I think they need to incentivize people to switch. But better if they mimicked the unfortunate US cash for clunkers program with an e-car for ic-car swap, but leave the parking and insurance bits out of the deal. If they want a rapid rise to 1% of the fleet, they could do this for 27,000 swaps at a cost (ignoring the inferred tax loss) of some 800M, or less if they took some money in the trade. If they did the swap with only vehicles of a certain size or age, they could optimize the impact.

I venture to guess that with the worst 1% of the fleet switched AND with reports of clear workability, fuel-tax savings, few operational problems, and no safety-of-life mishaps because of dead batteries, a 30% switch would follow in the next 5-7 years, without the extreme incentives.

Bribing people to switch is fine – but the parking thing? – that really has to be temporary. There is no possible logic to make it permanent.

The problem with us criticizing a green idea (e-car-bribery) as a congestion inducer (free-parking), without knowing and weighing the full extent of the free-parking program is to lend credence to climategate by quarreling amongst ourselves.

I do not like the reports of free-parking. They seem to indicate some lazy thinking. But I like Agassi’s ideas and people need to be bribed (or threatened) to switch to them. And climategate may be reducing the only threat our democracies allow.