Denmark is currently grappling with a regulation that leads to the unnecessary scrapping of thousands of electric vehicles (EVs) annually. This issue stems from a “repair limit” rule unique to Denmark, which prematurely deems EVs as total losses due to repair costs exceeding 75% of the car’s pre-damage trade value.

The repair limit was initially introduced to accelerate the replacement of older cars with newer, more environmentally friendly models, and to generate revenue through registration taxes. However, this rule disproportionately affects EVs due to higher spare parts costs, often making repairs economically unviable even for superficial damage. This practice undermines the environmental benefits associated with electric car ownership, as the initial climate impact of production is not offset by years of electric driving.

Autobranchen Danmark, the Danish automotive industry organization, estimates that approximately 7,000 of the 30,000 cars declared totaled each year could be salvaged and put back on the road if the repair limit were removed or adjusted. The organization emphasizes that superficial damage, such as bodywork or airbag replacement, can easily push repair costs over the 75% threshold, even if the car is still drivable.

Gitte Seeberg, CEO of Autobranchen Danmark, argues that discarding relatively new EVs with minor damage before they reach their full climate potential directly contradicts the goals of a green transition. She describes the situation as a significant waste of resources and a setback for the circular economy.

The Ministry of Taxation acknowledges the concerns raised by Autobranchen Danmark and is currently investigating potential solutions. The issue is being considered in conjunction with a broader restructuring of Danish car taxes, including registration taxes.