Volcano powered Teslas! No Import Duties, no VAT: No wonder Iceland is being called Tesla Island! - The Financial Express

Volcano powered Teslas! No Import Duties, no VAT: No wonder Iceland is being called Tesla Island!

thanks to their proximity to so many active volcanoes, nearly 350,000 inhabitants of the island get their electricity for free. This means that an electric car ecosystem is not only immediately implementable but can be offered without any cost to charge!

By: | Published: May 10, 2018 3:03 PM

What started with a tweet to Elon Musk, questioning why despite Iceland’s unique value proposition for electric cars a service centre was yet to be made available in Iceland, ended with Johann Olafsson who heads Iceland’s Electric Vehicle Association predicting an exponential growth in the sales of electric cars. The reason? Well, thanks to their proximity to so many active volcanoes, nearly 350,000 inhabitants of the island get their electricity for free. Some cities even have so much electricity, that they use the surplus to heat their sidewalks. This means that an electric car ecosystem is not only immediately implementable but can be offered sans any cost to charge - or in Tesla’s case, supercharge.“The supply of electric cars is not satisfying demand at the moment,” Johann Olafsson said in an interview in Reykjavik. If it did catch up with demand, sales would probably “more than double each year for the next few years,” he said. Olafsson says he was “thrilled” to receive Musk’s positive response to his request via Twitter for a Tesla service centre to open in Iceland. “I hope it will happen before the release of the Model 3.” Earlier this month, Musk tweeted to Olafsson:“Thanks for letting me know. Will expedite. Sorry for the delay.”

At present, despite having a ready to implement eco-system in place, Icelandic buyers interested in electric vehicles (EVs) currently face waiting times of up to nine months, Olafsson said. According to data provided by ON Power Company, Iceland’s biggest electricity utility, the island had less than 100 electrically-powered vehicles (including hybrids) at the start of 2014. That figure had risen to 6,145 by April 2018. And that’s understandable, considering that in Iceland it is cheaper to run an electric vehicle than anywhere else on earth. There is even a conducive tax-structure in place, Electric vehicles are for the most exempt from VAT in Iceland (an exemption that will end when more than 10,000 EVs are sold) and are totally free of import duty.

Even Iceland’s Prime Minister Katrin Jakobsdottir of the Left-Green Movement is pro-electric vehicles. Saying that their government will work towards the transition away from fossil dependence, by further improving the ecosystem for EVs with more charging stations, that will help do away with range anxiety once in for all.

With Inputs from Bloomberg.

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