Dutch market no longer enthusiastic for electric cars

Sales of electric cars are slumping as buyers are in doubt because road tax will soon also be applicable to these vehicles, AD reported on Friday.

Starting in 2025, electric car owners will begin paying road tax, initially at a quarter of the standard rate, and then the full rate in 2026. This tax is considerable, as electric cars are typically 300 to 600 kilos heavier than fuel cars.

The annual road tax for a small electric vehicle like the Fiat 500 will be around 720 euros, while a Tesla Model X will face a higher tax of approximately 1,800 euros. The current average monthly road tax ranges from 20 to 60 euros.

Car dealers have noted a recent decline in electric car sales. “Buyers are unsure,” said Paul de Waal of Bovag to AD, stressing the importance of adjusting the road tax for weight to keep buyer interest. “Otherwise, we will not achieve our climate goals,” he added.

The government aims for all new cars to be electric by 2030. However, the Netherlands has lost its leading position in European electric car sales, now trailing behind Sweden, Norway, Denmark, and Finland.

Buyers are also hesitant to buy electric cars due to the price war initiated by Tesla. The basic model of the Tesla Model Y was recently reduced to just below the subsidy threshold of 45,000 euros, with a potential subsidy of 2,950 euros, down from its original price of 65,000 euros two years ago. Autotelex noted that consumers are waiting for further price reductions.

Despite the drop in electric car prices, Bert van Wee from TU Delft told AD he believes it is too early to remove tax benefits for these vehicles. He advocates for a specific road tax rate for electric cars that considers their extra weight.

Another issue is that people still perceive electric cars as more expensive, while it is often not the case in the long-term. KPMG's research suggested that electric vehicles are more economical than fuel cars when factoring in purchase price, insurance, and maintenance, offering monthly savings of up to 200 euros.

However, two-thirds of buyers find the initial cost of electric cars too high, despite the long-term savings. KPMG warned that the introduction of road tax for electric cars could make fuel cars more appealing again.