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Transport Ministry looks at electric car tax reduction

A new initiative by a working group at the Ministry of Transport aims to increase the number of electric cars in Finland exponentially. By lowering or eliminating the tax on electric car, the group hopes to entice consumers to choose electric cars, rather than petroleum-powered ones.

Image: Yle Uutisgrafiikka

The popularity of electric cars has grown relatively quickly here. Finland has become known as a good testing ground for the use of electric cars because of the widespread use of the ubiquitous electric car warming units in parking lots across the country - which could in theory become charging points.

But currently, there are only an estimated one thousand electric powered cars on Finnish roads and some 150 actual charging stations.

A tax reform proposed by the new government aims to encourage more people to buy electric cars, arguing that this will help Finland meet EU emissions targets.

However the price difference between petrol, diesel and electric cars remains significant. Today, a petrol-powered Volkswagen Golf costs around 25,000 euros. A Golf running on diesel costs about a thousand euros more, but the electric version of the car costs 41,000 euros.

But, even if the sales tax on electric vehicles would be cut to zero, it would only mean a savings of about 2,000 euros from the cost of the car.

Different fuel, different prices

While the entry price to owning an electric car is high, keeping it going is much more affordable, thanks to lower fuel taxes.

However, Mika Anttonen of the fuel company St1 says the industry would prefer a level playing field in regards to energy taxation.

He argues that forest-based biofuels are a more cost-effective way for Finland to cut emissions than electric cars.

But if the Transport Ministry's proposal goes through, there could be tens of thousands of more electric cars on the roads in the next five years.

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