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Winners and losers from an announced durable tax hike: Tesla in Denmark

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  • Marcus Asplund
  • David Jinkins
  • Chandler Lutz
  • Gyorgy Paizs

Abstract

We study the consumer response and tax revenue implications of the early announcement of a durable good tax. In 2015, the Danish government announced a tax hike on electric vehicles several months before its implementation. There was a dramatic surge in sales of Tesla Model S vehicles just before the tax came into effect, and a dramatic ebb in the months following. We find that the government lost 169 million DKK (23 million Euro) in tax revenue on luxury vehicles by announcing the tax change before its implementation. We further find that speculation played at most a limited role in the Tesla sales surge. In total, final consumers of Teslas gained from the roll-out of the law change by avoiding the new tax.

Suggested Citation

  • Marcus Asplund & David Jinkins & Chandler Lutz & Gyorgy Paizs, 2019. "Winners and losers from an announced durable tax hike: Tesla in Denmark," Applied Economics, Taylor & Francis Journals, vol. 51(7), pages 722-730, February.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:7:p:722-730
    DOI: 10.1080/00036846.2018.1520963
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    Cited by:

    1. Fu, Yifan & Zhong, Shiquan & Ling, Shuai & He, Zhengbing, 2024. "Closing the loophole of vehicle ownership restriction: The impact of non-local vehicle restriction on new vehicle registrations and air pollution," Transportation Research Part A: Policy and Practice, Elsevier, vol. 185(C).

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