How Denmark Accidently Tried to Kill Electric Cars

An attempt at fairness by Denmark’s government nearly killed electric car sales in that nation.

Sales of electric vehicles in the Kingdom dropped by 60.5% during the first quarter of 2017, Bloomberg Markets reported. The reason, Denmark’s new government tried to be fair to all car owners by eliminating an exemption to the nation’s 180% vehicle tariff for electrics.

The government backed down after pressure from Elon Musk and others. Instead it will implement a gradual tax increase with a 40% tax in 2019, a 65% tax in 2020, a 90% tax in 2021 and a 100% in 2022. The hope is that by electric prices will be competitive with fossil-fuel burners by then.

Denmark may not be that important to electric sales anyway. Tesla (NASDAQ: TSLA) sold 2,738 units in the country in 2015 and 176 in 2016 because of talk of ending subsidies. That indicates Musk’s auto company can easily survive without Denmark.

Musk has Dumped Trump

Tesla’s vulnerability to political pressure was shown by another move by the usually brave Musk. Back on June 1, he made good on his promise to drop out of two advisory councils to President Donald J. Trump (R-New York).

Musk used Trump’s decision to pull out of the Paris Climate Accord as a pretext for his action. A more likely explanation is the Elon Dump Trump Campaign organized by investor Doug Derwin. Derwin had promised to spend millions of his own money to punish Musk for backing Trump.

Among other things he put anti-Musk billboards around Tesla and SpaceX facilities, got 18,000 people to sign a signature and convinced an unknown number people to cancel $1,000 contracts for new Teslas. Musk apparently got the message, and bowed to international pressure as well.

A major reason for Musk’s action is not to hurt sales of the Tesla Model 3 overseas and among environmentally conscious younger Americans. My guess is that Elon realized Trump supporters probably would not buy many Teslas, but a lot of Trump critics might. At the end of the day money overcomes political loyalty to people like Musk.

One has to wonder if Trump; or his rabid supporters, will now turn on Musk. A political battle that both Elon and Donald might regret may have been triggered by decent people with the best intentions. Hopefully Musk and his visionary works will survive this political bloodbath.

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