Car manufacturer demands clarity from the Danish government on electric car registration tax exemption

Denmark is tipped to be one of the first countries in the world to establish an electric car grid infrastructure, but French car manufacturer Renault is threatening to withdraw from a deal in which it would provide the vehicles.

Renault is supposed to provide electric cars to Better Place, the company overseeing the installation of the infrastructure for an electric car grid, but will pull out if the government can’t reach agreement on viable car tax exemptions.

Japan-based companies, IT service provider NEC and car manufacturer Nissan, are also involved in the plan, having created the lithium-ion battery pack to be used in the cars. DONG Energy is creating a national network of charging stations.

Better Place aims to have 500,000 electric cars on the roads by 2020, but the issue of vehicle registration tax remains.

As part of the government’s green energy initiative, it was decided that electric vehicles would not be subject to the normal vehicle registration tax of 180 percent until 2012.

Previous Climate and Energy Minister Connie Hedegaard hinted last year that an exemption, or at least a significant tax reduction, would be extended until 2015. But nothing’s clear yet.

‘If we don’t get a clarification, then we at Renault want to focus on other countries for the first electric cars,’ Henrik Bang CEO of Renault Denmark told Berlingske Tidende newspaper.

Renault wanted the issue resolved within six months, Bang said.

Jørgen Hostmann, an expert in electric car technology at the Technical University of Denmark, is urging the government to take the threat seriously.

‘If Denmark wants to be a testing ground for electric cars, it will have to create a base for new companies and open up greater opportunities for existing companies. Without clarification on the tax issue, there is doubt,’ he said.

Current Climate and Energy Minister Lykke Friis said the issue was ‘complicated’ and that the government was working with the many stakeholders involved to resolve the problem quickly.