Denmark’s government will let the registration tax on electric cars rise from the new year, as planned. The step has been part of the phase-in since the political car agreement of 2020 introduced a tax discount for EVs. It was postponed last year, but this time the government does not intend to delay it again.
In practice, the price level at which an electric car starts paying registration tax falls from DKK 419,300 to DKK 366,200. At the same time, EVs will pay a larger share of the calculated tax: the phase-in rises by eight percentage points, from 40 to 48 percent, lifting the effective rate above the threshold from 60 to 72 percent.
Which cars will cost more?
Cheaper models are not affected. An EV priced around DKK 275,000, such as the Kia EV3, will not pay any registration tax before 2030. The mid-range and premium segments, where many Danes buy their cars, will feel the change. According to calculations from motoring organisation FDM, a VW ID.4 Style rises by DKK 10,300, while a Tesla Model Y Long Range becomes almost DKK 28,000 more expensive.
What about used electric cars?
For most buyers of used EVs, nothing changes. Danish registration tax is paid only once, when a car is first registered in Denmark, so a used EV that is already on Danish plates does not pay again when it changes owner. The new rules do matter for imported used EVs. Here, the rates that apply are those in force when the car’s taxable value is assessed, not those from the year the car was new. A used EV imported and registered in 2027 therefore follows the 2027 rules. However, for the vast majority of used EVs this has no effect, because their value is well below the threshold in both 2026 and 2027. Only expensive, nearly new imports are likely to be hit.
The industry: follow the plan, then reform
For AutoBranchen Danmark, which represents Danish car dealers and workshops, the decision comes as no surprise. Its CEO, Gitte Seeberg, says the industry would naturally prefer no taxes at all, but that if they must come, it is sensible to stick to the plan already adopted.
Seeberg calls the 2020 agreement a resounding success. Denmark is now well ahead of the targets politicians originally set for the switch to electric cars, and with a broad government coalition and many political priorities to fund, she argues, the historic tax breaks that kick-started the transition could hardly last forever.
At the same time, the association sees the increase as only a first step toward taxing a car fleet that will soon be dominated by EVs. When the whole system is rethought, Seeberg says, cars should be taxed on technical characteristics such as weight and energy consumption rather than price. That would reward the most efficient cars and be far easier to administer than today’s price-based model. An expert group is already working on a new model for future car taxation.
A market already dominated by EVs
The figures show how far Denmark has come. From January to August this year, electric cars accounted for more than 96 percent of private new car sales, according to bilstatistik.dk. The Danish car fleet now counts 714,000 EVs, meaning that more than one car in four on Danish roads is electric.
