EV tax benefits & incentives

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Taxes are a fact of life but we know that keeping up with taxation regulations isn't a hobby for everyone. On this page we breakdown how vehicles are taxed, the differences in taxes depending on the fuel type and the incentives on offer for low and zero CO2 emission vehicles.

Vehicle tax brackets

*country specific information, see this example from Denmark (it need’s localisation)*

The vehicle’s taxable value will be calculated based on the vehicle’s steel price including VAT and potentially the battery exemption. Other deductions and supplements have been removed. Steel price is the vehicle’s price before VAT and taxes.

The taxable value is calculated using three steps:

25 % taxation up to 65.000 DKK incl. VAT
85 % taxation from 65.000 - 202.200 DKK incl. VAT
150 % taxation over 202.200 DKK incl. VAT

Registration tax and CO2 surcharge

The new taxes are designed to have more people choose cars with low CO₂ emissions. All cars, except electric cars, are subject to a CO₂ surcharge based on CO₂ consumption while driving. For petrol and diesel cars with high CO₂ emissions, CO₂ surcharge will make the car more expensive.

For plug-in hybrid cars, it can go both ways. The key figure is 50 grams of CO₂ per kilometer. If your plug-in hybrid car is placed below this limit, it will be cheaper. Above this limit, the 50,000 DKK exemption no longer applies making the car more expensive.

Basic deduction

All cars are assigned a basic deduction of 21.700 DKK. This is indexed accordingly to the personal income tax act §20.

For low emission cars (plug-in hybrids) For low emission cars, there is a basic deduction of an additional 50.000 DKK. This amount decreases by 1.250 DKK per year until 2025 and by 2.000 DKK per year until 2030. Hence, the extra basic deduction for low emission cars is 45.000 DKK in 2025 and 35.000 DKK in 2030.

For zero emission cars (100 % electric) For zero emission cars, there is a basic deduction of an additional 144,188 DKK. This deduction have a maximum of 170,000 DKK. The amount decreases by 2.500 DKK per year until 2025 and by 4.600 DKK per year until 2030. Hence, the extra basic deduction for zero emission cars is 160.000 DKK in 2025 and 137.000 DKK in 2030.