By on April 19, 2021

Undoubtedly eager to improve the take rate of electric vehicles, automakers have a myriad of solutions at their disposal. But the majority have something to do with getting the government involved to futz around with taxes.

Normally, this has to do with making special exceptions for EVs or subsidizing them via rebate programs. But governments seem happy to do this, as increasingly more legislation is advanced that would place restrictions on when and where people will be able to drive internal combustion vehicles, and automakers appear to be getting with the program. We’ve already seen manufacturers choosing sides in America’s gas war and now the Europeans are getting in on the action by demanding higher taxes be imposed on vehicles reliant on gasoline or diesel.

We’ve long been skeptical that a portion of green initiatives are actually self-serving scams, existing primarily to suit the ambitions of various businesses — plenty of which have direct ties to the automotive industry. Nobody wants the environment to be further tainted, so environmentalism becomes a convenient excuse for enacting whatever policies one desires without receiving much scrutiny from the press. But that’s beginning to change as we inch closer to the utopia (a term coined by Sir Thomas More for his 1516 to satirize the concept of a perfect planned society) that’s being envisioned by government regulators and one of the most powerful industry groups in human history.

It has not appeared to slow its advance, however.

In a recent interview with The Wall Street Journal, Audi CEO Markus Duesmann said he would like to see internal combustion vehicles subjected to new fees. But he’s just one of several top executives from various automotive manufacturers that are asking the EU to impose more fuel taxes on vehicles that burn them — that way EVs can become more competitive without the industry needing to make them better in any technical sense.

“We need to tax carbon at the pump,” Duesmann stated.

From WSJ:

Traditional auto makers face a dilemma. The bulk of their business is still building and selling cars with internal-combustion engines—including family cars, big sport-utility vehicles and sports cars. Raising fuel taxes could hurt sales of those vehicles. But unless EVs can compete on price with conventional cars, it will be hard for auto makers to lure customers to them and recoup the vast investments manufacturers have made in the technology.

One avenue for the tax hikes is through carbon pricing — a dollar price on carbon emissions that sets a base for levies and taxes on emissions — which is one of the tools governments have deployed to fight greenhouse-gas emissions. Higher carbon pricing ultimately leads to higher prices for fossil fuels.

Herbert Diess, chief executive of Volkswagen AG, which owns Audi, has been calling for higher carbon-dioxide emissions for some time. He says the €25 price (about $29) Germany sets per ton of carbon emissions is too low and suggests Germany should price carbon more in line with Sweden, which sets the price at €100.

Truck manufacturers are also interested, with the CEOs of DAF, Daimler Truck, MAN, Scania, Volvo, and Ford’s European truck division jointly called for the EU to end support of diesel fuels late in 2020. While it sounds kind of insane, the industry has dumped billions into developing battery or hydrogen driven delivery trucks (something engineers from several of the world’s largest vehicle manufacturers have told me was both brilliant and totally insane/impossible) and envision a future where most cargo haulers are powered by electricity. But it’s not so cut and dried as just building new vehicles, European truck companies also wanted the government to base all future road tolls and fuel taxes on CO2 emissions and to tax energy based on its carbon content at the tailpipe — which would be great news for any fleets burning all of their measurable pollutants as the plant that’s providing the electricity.

“We need cost parity between hydrogen and diesel trucks,” Daimler Truck head Martin Daum was quoted as saying. “You have to switch to [charging for] CO2 and then you can play around with the rate.”

Germany’s biggest auto lobbying group, the VDA, has similarly suggested that the European Union make additional tax exemptions for vehicles that run on electricity or biofuels as a way to discourage customers from buying gasoline/diesel reliant cars. While it seems like a big ask, the government has actually been pretty receptive. The EU already has a plan to introduce new environmental rules over the summer and the presumed scenario involves a strong, organized push for tightening emissions regulations even further.

While we understand that it’s an effective strategy, it doesn’t seem to be one that’s actually catering to customers anymore. Regulations are definitely encouraging more people to buy electric but it’s coming from this twisted marriage between the state and industry that has increasingly less to do with saving the environment. Consumers are not blind to this and there may soon come a day where the backlash is far worse for the industry than any advantages provided by regulation. EVs do indeed seem to be the future. But they need to be gradually improved until they become the kind of vehicles that work for the customer, not treated as square pegs the industry has to hammer into a round hole by some arbitrary deadline determined by government officials and auto executives.

[Image: Nrqemi/Shutterstock]

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40 Comments on “European Automakers Think Fuel Taxes Will Increase EV Sales...”


  • avatar
    Art Vandelay

    Well, their gasoline taxes steered people to diesels for decades so yeah, if they tax all fuels that heavily they will probably move towards EV’s.

    • 0 avatar
      ThomasSchiffer

      It is actually more expensive to own a Diesel car in Europe. Diesel fuel is slightly cheaper than gasoline (subsidized), but the yearly car taxes, maintenance and insurance is more expensive on a Diesel car ensuring that these vehicles are only bought by people who truly need the fuel economy and can thus save some money at the fuel pumps.

  • avatar
    dal20402

    News at 11: the green eyeshades can do math!

    Anyone who’s been paying attention knows that you will need a $150-$200/ton carbon tax to put a transition away from fossil fuels into high gear. The challenge is how you impose that without bankrupting ordinary commuters in the short term. It will be easier in Europe where there are more non-car options for transport.

    • 0 avatar
      ajla

      A carbon tax might have legs in Washington, Oregon, and certain cities but I don’t think it will get broad support anywhere else in the US.

      FWIW, a $200/ton carbon tax would be about $1000 per year on an ’18 Camry 2.5L driven 15K of mixed miles. That’s quite a stick to implement on some people.

      I personally think that if governments want to take this route then expanding the “gas guzzler” tax makes more sense than an increased fuel tax. That would tend to have an outsized impact on people buying new vehicles, lower MPG vehicles, and those with higher incomes.

      • 0 avatar
        dal20402

        When EVs are available at price parity to current ICE cars—in both the new and used markets—the carbon tax would become relatively painless for the majority of commuters. (Yes, this is TTAC and every single one of you megacommutes 400 miles daily from your wood-heated hut in the middle of a national park.Y ou’re still outliers.)

        But that won’t be true for at least another 8-10 years, assuming the best-case scenarios for EV production capacity and battery prices. That’s a long time to wait. The challenge for policymakers is how to make the transition faster without all the burden falling on the ordinary commuter. The right answer would be some combination of EV subsidies (higher in areas with the greenest power), carrots to metro areas for allowing more infill housing so people can live closer to work if they want, and rewards to OEMs for increasing battery production and driving down battery costs. You’re right that all of it is a heavy political lift.

        • 0 avatar
          ajla

          “When EVs are available at price parity to current ICE cars—in both the new and used markets—the carbon tax would become relatively painless for the majority of commuters.”

          At that point there isn’t much reason to implement a carbon tax any more than there would be to pass a horseshoe tax in 1922.

          • 0 avatar
            dal20402

            Sure there is. Transitions are hard. EV price parity by itself is not enough to cause everyone to learn a new routine. ICE cars being much more expensive to operate will do that.

          • 0 avatar
            ajla

            I disagree.
            If there is major momentum on EV market share then things will take care of itself and I think the government has enough levers to pull in support of the change without resorting to any carbon taxes. At the point BEVs make up the majority of the fleet a carbon tax is largely just a “sin tax” that punishes people for not being able to switch. And again, that conclusion might play fine in Seattle or Boston, but I don’t think you’ll ever see broad national support for charging 4-cylinder Camry drivers $1000+ a year.

          • 0 avatar
            28-Cars-Later

            “ICE cars being much more expensive to operate will do that.”

            Perhaps, but the most serious issue here is it is artificial. They forced the creation of EVs which until Tesla were utter financial failures on a per unit basis, so instead of the EV being the better product in X cases, they will simply eliminate the competition through artificial means? Tyranny much?

            …or maybe the Fed and Biden cronies have 2023 TSLA calls…

      • 0 avatar
        tomLU86

        Gas guzzler tax–tax thirstier vehicles. Sounds good, right?

        Well, people may shun the ‘gas guzzlers’–but what’s to stop them from building homes far, far away (as indeed they do). They just drive more miles in a ‘more efficient’ car.

        I know, I’m a killjoy.

        If you want people to use less fuel, you tax it more. Those who want and can afford Suburbans and F-250s, party on. Those who want and can afford to drive 160 miles a day, go ahead. Also, it’s much simpler than another intrusive tax. And it’s fair–the more you use, the more wear and tear on the roads, and the more CO2 you spew, the more you pay. Simple. Govt have been collecting fuel taxes for a hundred years.

        My peeve is high gas taxes AND crumbling roads. Or high gas taxes and stupid spending. That’s hard to accept, for me, though that is also reality.

        In Europe, fuel taxes are already high. Going from $7 per gallon to $8 won’t change as many minds as going from $3 to $4.

        • 0 avatar
          ajla

          A fuel tax is a regressive tax so it will have an outsized impact on lower income people and people that can’t afford to live closer to their workplace.

          “They just drive more miles in a ‘more efficient’ car.”
          So what’s the problem? The goal here isn’t to restrict travel it is to lower resource use and emissions. It can vary depending on how your power is generated, but I would need to drive about 40k per year in a Bolt to match the greenhouse gas impact of my current Kia going 10k per year and the oil usage takes over 100k miles in the Bolt to gain equivalency. Even staying among ICE vehicles someone going from a 4WD Suburban 5.3L to an Avalon Hybrid would need to triple their miles driven for there to be CO2 equivalency.

    • 0 avatar
      Lorenzo

      Actually, no, they can’t do math, or economics. The effect of taxes is not determined by governments, but by markets. These are the same idiots who try to tax the “big, bad corporations”, who don’t pay taxes, they shift them to their customers, wholesale or retail, through price increases the little guy ultimately pays.

      If they can’t raise prices enough, they shut down some facilities, laying off those employees and harming the host communities, or reduce employment overall and make surviving workers work harder for the same money, or both. It’s always the workers at the bottom who pay the taxes, but if the workers are overburdened, the effects trickle UP through the economy, hitting companies and industries unrelated to the targets of the tax.

      This has happened many times in many places in many ways, in history, but there’s always another idiot in charge who never learned the lesson, and his/her/its country relearns the lesson the hard way.

  • avatar
    Jeff S

    Agree with you on expanding the gas guzzler tax. Start with the large suvs and pickups.

  • avatar
    ThomasSchiffer

    Typical European Union and German idiocy.

    Millions of people depend on their cars to get to work, including me. There are millions of people who work in the low income sector who have multiple jobs, and they depend on their cars to bring them from job A to B to C. Higher fuel costs will ruin them. Current fuel prices are already terrifying, with some blends of gasoline approaching almost 2 Euros per liter! And the public transportation sector, at least in Germany, is overrated. The reality is that the Deutsche Bahn has been privatized and is expensive, unreliable, slow and unsafe since 2015. Even if Diesel is priced at 2-3 Euros per liter, I would rather take my car than risk my life and waste my time in a slow, unreliable public transportation vehicle such as a bus, train, tram and so forth.

    The electric car is simply not competitive (at this point). Unstable ranges, long charging times, questionable battery durability and expensive. I do not care about reaching 100 kph in under four seconds. What I want and need is a stable range and quick refueling while being able to drive at sustained high speeds on the Autobahn, and this is why I drive a Diesel car. Those fancy Tesla Model 3 Performance are completely worthless on the highway and I see them creeping behind trucks at a slow 80 kph in order to preserve battery power while I blast past them at 210 kph in my trustworthy and efficiency 2007 GL320 CDI 4Matic.

    Furthermore, we have the most expensive electricity prices in Merkel’s chaotic Germany. Some public chargers in Munich are already charging a 1 Euro+ per kilowatt hour – meaning it is still cheaper to drive a gasoline/Diesel car. And this brings up another problem – we do not have enough public chargers, and most car owners do not have a garage where they could charge their cars. There was a recent article on Welt.de which projected that if the European Union were to guarantee Europe-wide charging for EVs, they would need to build about 3,000 public chargers PER DAY. And of course this is not the case, and Eastern Europe is not going to switch over to EVs anytime soon.

    The European Union has made no secret of its desire to force its citizens into public transportation. Artificially pricing gasoline and Diesel cars to death is just the beginning. They know that EVs will never work for the masses and this helps their ultimate goal of having less cars on the road. Already, we have some eco crazies in Germany who want to ban EVs because the heavy weight of EVs means more tire wear which means more fine dust particulates…

    • 0 avatar
      dal20402

      You are driving at 210 kph on the Autobahn, and then complaining that you are “risking your life” on public transport? One of those things is statistically far more dangerous than the other, and it’s not the train.

      • 0 avatar
        ThomasSchiffer

        When you have been driving on the Autobahn for over three decades, you become used to those speeds. In fact I now consider 210 kph to be slow, but that is the top speed of my 2007 Mercedes GL320 CDI 4Matic, and even at this speed it is stable and easy to control.

        Please look on Youtube how unsafe train stations and public transportation has become in Merkel Germany since that witch opened our borders in 2015 to allow in so-called ‘refugees’ (consisting of nearly 70% young men of a certain religion). This is a car site, so I try to keep deep politics out of this. Jut be aware that there are many incidents of people being randomly pushed down stairs/escalators, knifed, spat at and verbally berated. This is why I avoid public transportation (it is also expensive, unreliable and slow).

        • 0 avatar
          dal20402

          I have not done the analysis in Germany, but some time ago there was a panic about attacks at the Oakland stations of BART (the Bay Area metro system). At the time, some UC Berkeley researcher did an analysis that proved that riding BART out of Oakland was still 100x safer than commuting by car between Oakland and SF. The analysis was overstated because it did not take into account the much higher risk of being hit by a car while walking to or from the stations, but it was revealing.

          You have gotten used to 210 kph on the Autobahn. That doesn’t mean the risk is gone. If a double-trailer truck blows a tire immediately before you pass and swerves into your lane, you’re going to crash very hard indeed. And that is a lot more likely than being robbed at the train station.

          • 0 avatar
            ajla

            Risk of death is a metric but I can understand people not wanting to experience this sort of thing:

            youtube.com/watch?v=rbj_iu_8Lso

            I can’t imagine that nonfatal but still very unpleasant (and possibly psychologically damaging) encounters aren’t more common on transit vs commuting.

          • 0 avatar
            Art Vandelay

            So driving in Oakland and driving on the Autobahn, especially the areas where there are no speed limit are two different things. I fully believe you are safer at 210 kph with a bunch of German drivers around you than the average road in the US. The Germans you see tend to take driving seriously and penalize stupidity.

            Additionally, they have safety inspections there…like real ones. You are far less likely to have such a scenario there because you can’t drive a crapbox with body panels hanging off and more warning lights on the dash than the Apollo 13 Capsule like you see running around most US cities. They require basic things…like tread on the tires. This is not a given in the US.

          • 0 avatar
            ThomasSchiffer

            Dal,

            There are risks to everything in life.

            Also, I do not drive at full speed all the time. Generally I will cruise at 150-160 kph where possible. And if you have been driving here for decades, you will learn to read and predict the behavior of others motorists, particularly those in the slow lane who might suddenly pull out in front of you to overtake a slower vehicle in front of them (a generalization is that these tend to be drivers in cheaper and run-down style cars). Without sounding arrogant, I have reached a point in my long driving career where I have a sixth sense for this type of behavior, thus I will take my foot off the accelerator and prepare myself for eventual hard braking.

        • 0 avatar

          You haven’t been in NY subway yet. It will redefine your notion of “no safe”.

          • 0 avatar
            dal20402

            Good grief. Before COVID I had been commuting by public transit in various cities for most of my life. I’ve spent my share of time on the New York subway. It’s unpleasant, because of bad design decisions, but much safer than a car.

          • 0 avatar
            ThomasSchiffer

            @Inside Out,

            Public transportation has never been attractive to me, before COVID and before 2015. I live on the outskirts of Munich and there is no public transportation that would bring directly into the city center where I work. For this purpose I have a beater Renault Twingo from the early 1990s (my city car).

            Two to three times a week I will work in Würzburg and will speed up there in my Diesel Mercedes GL320 CDI 4Matic. Could I take the train? Well, yes. But I would need to reach the main Munich train station for this. Driving directly from the outskirts of Munich to Würzburg is in my opinion first off more fun (I enjoy driving) and gives me control of my own mobility (I can drive where I want and when I want).

          • 0 avatar

            @dal20402 – de Blasio successfully destroyed New York. Today it is not safe to be in center of New York or in Subway. But you are an American, you got used to dirty, destroyed, high crime urban areas.

  • avatar

    Easy solution: if you cannot afford EV buy electric scooter. It will be affordable and easy to charge.

  • avatar
    28-Cars-Later

    “that way EVs can become more competitive without the industry needing to make them better in any technical sense.”

    Sick.

    SUBTEXT: Our product sucks so instead of improving it (because we probably can’t) we want the EU dictatorship to eliminate our competition.

  • avatar
    Jeff S

    I have been taking mass transit for most of my working life. I have saved thousands of dollars over parking fees, wear and tear on vehicles, and fuel costs. Since COVID-19 I have been teleworking which even saves me more money in meals and clothing in addition to the time it takes to commute. For me its less about being a greenie and more about conserving the green in my wallet. My employer has been paying my mass transit cost for several years which even makes it better. If you work in a place where it is feasible to take mass transit then it is a good option especially if you want to prolong the life of your vehicle and save money unless you have so much money that you don’t need to save and then you don’t need to work.

    • 0 avatar

      Yeah, but what if you get harassed by crazy people every time you ride BART? And I am not joking – I mean every time. That’s the reason I avoid BART if I can. It is not like I am driving to San Francisco in my car either. Probability is high that it will be broken-in by criminals or drug addicts while parked.

  • avatar
    SCE to AUX

    This is where even I will remind the Eurocrats that CO2 comes from power generation plants, too, so they’ll need a way to tax everyone on the portion of stack exhaust that their EV contributes.

    • 0 avatar
      NigelShiftright

      Wait till everyone’s driving an EV and the next big round of rolling blackouts shows up in those locations where electrical generation is weather-dependent.

      You know the joke about what socialists used to light their houses before they had candles.

  • avatar
    IH_Fever

    Here’s a novel idea: If you want an EV, buy an EV and quit trying to force everyone else to do the same. Manufacturers: Make an EV as convenient and useful as an ICE, they’ll sell. No need to have daddy government force people to act a certain way through taxes.

  • avatar
    NigelShiftright

    Would this work in the USA?

    Joe or Jane American drives, say, 15K miles per year in a 20 mpg vehicle (some Corollas, some Suburbans). That’s 62.5 gallons a month.

    Suppose a gas tax of $2/gal. That’s $125 a month. Are Joe or Jane going to run out and spend $400+ a month to buy a new EV? I hope they are not that financially illiterate.

    What they are likely to do instead is keep buying gas but cut back on $125 a month of other things, hurting the “other things” sector of the economy but giving the fedgov another $1500 a year to p-ss away.

    Sounds like a win-win for the fedgov.

    • 0 avatar
      tomLU86

      The feds always spend way more than they should–and that was before the pandemic, and before Biden and the Democrats took overs. Now it will be much, much worse. They need the money–for the programs (most of which are bogus, IMO) that they claim the people want.

      Once they trash the money system, our society is finished, and TTAC will be replaced by free blogs, as it will not be viable. That’s where we are headed with all this massive debt.

      15k per year–how much of that is commuting? Chances are, Joe or Jane will continue the same commute miles.

      @Nigelshiftright, how far is their commute? 40 miles a day = 200 miles a week = 10000 miles. Can’t touch that. That’s $80 per month that I don’t have to spend on other things (or to save for the future).

      That leaves $45 per month

      If gas jumped $2 per gallon, one thing I could do better is plan my errands shopping runs. I’d combine them. That would save a few miles, and increase my mpg too.

      I might drive 70-75 instead of 75-80. That will reduce my fuel use. Maybe even my commute, using 5-10% less fuel

      So my real fuel hit will be less than $125. Maybe $110. Or $100. Or $120. For me, it will NOT be $125. For anyone reading this, it will not be. People will pay more, yes, but they will save some fuel and not pay the full tab.

      Then, when my vehicle needs to replaced for whatever reason, I’ll factor in the price of fuel into my next one. I’ll try to find one that works for me that uses less fuel. Maybe I’m leasing a car for $300-400 now. Plus $100 gas hit. So my next one, maybe I’ll look for more efficient AND less expensive.

      Maybe I’ll write my congressperson, and make a big deal locally and start a state/local LOWER FUEL TAXES movement. If they listen, then either my roads will decline, or they will tax me somewhere else.

      Ain’t no such thing as a free lunch.

  • avatar
    Jeff S

    That’s what I would do is cutting back on other expenses.

  • avatar
    conundrum

    Our neoliberal yet on-the-surface politically correct eco-friendly masters have decided, an EV it shall be for you, dear serf, and a current vaccine passport in your wallet. A new industry is being formed to pillage yet another sector of Earth’s dwindling resources, to make even more moolah for the Mr Bigs. Oh, to feel so free to roam and be Green and sip on wheatgrass smoothies and gorge on gluten-free bagels! Confirm your agreement to the societal norm established by your betters, or you shall be sent to the online Manners of Thought Reform School until morale improves and you see the light.

  • avatar
    stuki

    As usual in Dystopia: Those who can’t, instead busy their incompetent, imbecile, pathetic little selves crassly screeching, for the totalitarian junta to ban those who can, from competing with them.

    Of course noone, if given a choice, wants the subpar junk which is the only thing the incompetent idiots’ lack of aptitude, talent nor competence at anything whatsoever, enable them to produce. So, as with similarly ran, funded and protected Lada in similarly ran Soviet Union, the only solution available to ensure the garbage can still preen around pretending to somehow be useful for anything whatsoever, besides serving as firewood, is to have a totalitarian state composed of nothing but equally incompetent ladder climbing trash, ban, harass and rob their in-all-ways-but-junta-closeness superiors into serving as nothing but their de facto, at-the-jackboots’-gunpoint, plantation labor. From those who are competent and productive, to utterly useless, in every possible way, garbage. That’s the once-were West by now. Good thing the Afghans are, once again, back to their usual, more competent act. Of taking idiots’ name and kicking idiots’ butts…

  • avatar
    fazalmajid

    Anyone who’s paid attention knows German automakers have been resisting EU fleet fuel efficiency standards and the like because they dominate the gas-guzzling luxury car segment. The reason why we need CO2 taxes is because global warming is a huge externality and it’s all CO2 emitters, including the gas and coal-fired electric plants that Merkel is prolonging the life of due to her knee-jerk decision to shut down Germany’s extremely efficient and safe nuclear power plants. Unfortunately the EU grandfathered too many legacy polluters in its emission permit trading scheme so the actual prices were too low to change behaviors, and for instance by granting Germany 2.5x the credits of France, it actually rewards inefficiency and pollution.

  • avatar
    Jeff S

    I don’t get harassed because most fellow riders are asleep coming and going. If you have plenty of money and you want to drive that is your choice but then if you complain about the price of fuel or the rising cost of vehicles then you don’t get any sympathy. I can afford to drive but it is a waste of money since the parking alone costs more than the round trip fare and it only takes 30 minutes each way even if I had to pay the $4 a day round trip costs. I would much rather save and invest what I don’t spend. Much less about being green as having more green in my wallet.

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