The Netherlands has long been an important market for Tesla. It’s one of its biggest markets for sales per capita and it’s where the automaker has established its European headquarters and built its first final assembly factory in Europe.
Now Tesla’s sales are surging in the country ahead of the end of an EV incentive.
Based on registration data, Tesla has already delivered over 3,000 vehicles in the country this year.
That’s more than twice the number of vehicles Tesla delivered during the same period in the Netherlands last year.
Sales of the Model S, in particular, have been growing rapidly in the country in 2018.
The sedan represents about two-thirds of Tesla’s sales in the Netherlands: 1,927 Model S vehicles out of the total 3,046 Model S and Model X vehicles combined.
Sales of the Model S have grown so much in the past few months that the Netherlands is now a bigger market than Norway for Tesla’s sedan.
The Netherlands is a popular market for electric vehicles with some generous incentives, but the Model S is particularly popular and this year, it is even beating significantly less expensive EVs like the Nissan Leaf and the VW e-Golf.
What could partly explain the surge in demand for the Model S is that it is a popular company car due to the significant tax break on the Benefit-in-kind (or BIK) ending for vehicles that cost more than €50,000, which is the case for Model S and Model X.
The BIK tax break was reportedly worth up to €19,000 for corporate electric vehicle owners over five years.
The government incentive reduced the tax to 4%, but it will go up to 22% for any amount over €50,000 starting next year.
It could create a rush for buyers who can take advantage of the significant tax break to try to get Tesla vehicles by the end of the year and we could be seeing the start of that rush with the significant surge in deliveries during the first half of the year.
We have seen similar situations happen with the end of EV incentives before. The best examples being Denmark and Hong Kong which used to be two of Tesla’s best markets. But now they dropped down to be some of the worst markets in terms of sales since they killed their incentives.
It’s sad that incentives still have such a strong impact on electric vehicle sales, but it’s a trend that is expected to slowly change over the next few years.
We expect a similar albeit not as drastic situation in the US with the likely end of the federal tax credit, which never had as big an impact as the more generous incentive in those previously mentioned markets.