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Selling Environmentally Friendly Cars - tap into the green economy Mattias Goldmann & Jonas Lööf

Selling Environmetally Friendly Cars...which can only solve individual or family problems, but also those of so - ciety. According to The Swedish Environmental Protection Agency, Road

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    Selling Environmentally Friendly Cars

    - tap into the green economy

    Mattias Goldmann & Jonas Lööf

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    Published by Miljöfordon Syd Editor: Jonas Lööf

    Graphic design: RÖD Reklambyrå AB. www.rodreklambyra.se

    Photo: Saab, Renault, Volvo, Toyota, Volkswagen, Ford, Peugeot, Citroën, Avis, Carstedts Bil, Taxi 020, Michelin, Vägverket, SPI, TomTom, stock.xchng, iStockphoto, Daniel K Johansson, Mats Samuelsson, Martina Ekström, Ronny Östling/RÖD, Malte Sandberg, Hertz, Martin Wickström, David Färdigh and Stefan Nilsson.

    ISBN: 978-91-979155-1-9

    The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Union. The European Commission is not responsible for any use that may be made of the information contained therein.

    http://www.rodreklambyra.se

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    Jonas LööfJonas is the founder member of the re-gional Clean Vehicle Association, ‘Miljöfor-don Syd’, where he also acts as Operations Manager. He is editor for ”Clean Vehicle”, an information paper with the aim to in-crease the knowledge and interest about clean vehicles, biofuels and better use of our cars by the public. He managed the project ‘CO2- Effective Car Dealers in Kal-mar County’, the results of which are the basis for the EU-project, ‘Clean Drive’. This aims to encourage car dealers to sell more energy efficient and climate friendly cars all over Europe.

    Mattias GoldmannMattias Goldmann has a background as a member of the board, municipal inspector and press officer for Green Motorists. He has worked to develop emission-reducing projects in East Africa and has a political background from municipality to national parliament levels. He was previously a freelance journalist for a variety of publica-tions, including “Teknikens Värld” (a tech-nical magazine) and Auto Zeitung. In his youth he practiced in a garage. Mattias has one of the largest collections of car brochures in Sweden.

    The authors

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    The environmenTal movemenT has repeatedly been honored to have played a

    critical role in the green car boom in Sweden. However, the most important players we find

    are at car dealers like; European Motor, Carstedts, Bilia, Hermibil, Holmgrens, and many other showrooms across the coun-try. Without these car dealers, the Clean Vehicle boom would still be a writing-desk product with a few enthusiasts who wanted to combine driv-ing with environmental considerations. Think of car dealers and the probability that you think ”environmental hero” is quite small. It is a big underestimate and misjudgment. This book is based on meetings with hundreds of dealers, with a huge experience of how to sell cars and encourage repeat business. For many dealers, it is a vocation rather than a profession to sell the car, and more and more are interested in selling cars that their grandchildren can also be proud of. A recent major change to the car market has been the impact of the environmental car. Clean cars under the conventional definition have in recent years accounted for about one third of new sales, sometimes more than that. At a time when government benefits are being eroded, there is a falling market share trend, municipalities with their own incentives however, maintain sales figures that are significantly higher than in those without local incentives. The environmental car phenomenon is still a new and different chal-lenge for the industry. Motor vehicle sales are no longer about selling that which can only solve individual or family problems, but also those of so-ciety. According to The Swedish Environmental Protection Agency, Road Transport Administration and the Consumer Agency; a gas car powered by biogas reduces the carbon footprint by 80 percent, and the fuel-effi-cient diesel and petrol cars by 40 percent compared with the conventional car; the ethanol car then halve the climate impact!

    The Clean Vehicle Boom – forgotten heroes

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    Today’s definition of clean vehicles and the current market for these ve-hicles is not yet distinctly defined. Consumers are becoming more aware and making increasing demands. Local authorities, parliament and the government tightens definitions and highlights an increasing number of specifications for what a clean vehicle is. The Swedish Consumer Agency is working to implement an EU-energy label of vehicles much like that in place for our refrigerators. The EU Commission sets tough demands on all new car sales, which on average will be down to 130 grams of carbon dioxide per kilometer by 2012. This requirement separates the wheat from the chaff among dealers, which of them will actively contribute to the goal and who will drag their feet? But it is not only about tightening up what we already know to expect. Now electric cars and hybrids will also be introduced, with new demands on the car salesman – and, not least, new opportunities. The car dealers that pioneer with new technologies and meet new con-sumer and regulatory requirements, will fare much better than those that, at the last moment, to try to convert.

    This handbook gives practical tips for car dealers who want to help move the car forward as a part of the solution, rather than part of the problem. How the motor vehicle is designed, how the cars are advertised, what is true and false in the debate, what accessories are appropriate to highlight and how all the staff are involved are just some of many important ques-tions. This publication examines all of these drawing upon the research into concrete examples from the Swedish motor trade

    Together we make the car greener!

    Mattias Goldmann och Jonas Lööf

    The Clean Vehicle Boom – forgotten heroes

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    ContentEnvironment sell! ...............8

    What car should I sell? ...... 10

    What is a green car? ......... 14

    Government vehicle purchases ....................... 18

    Green car benefits ........... 22Vehicle tax exemption for green cars ..................22Green car super bonus ......25The law of beneficiary tax for company cars ..............26Exemptions from congestion tax..................28Parking benefits................29Partial financing of additional cost ..................32Fuel price ........................33Fuel efficient versions ........34Taxation of different fuels ...36Trade-in Value ..................38Image .............................42

    Electric cars .................... 46Financial incentives ...........48Information......................49Charging stations/stands ...50Customer groups ..............51Sell, lease or a combination? ..................52

    Light duty vehicles ........... 54

    Conversion of existing cars into renewable fuels .. 56

    Affect the general agent ... 58

    Affect the manufacturer ... 60

    The Showroom ................ 62The impact of the showroom .......................62How do the customers find the showroom? ...........66Train the salesmen ............67Involve all employees ........68

    Company Cars ................. 70

    What are your goals? ........ 72

    Environmental Awards ...... 76

    VIP arrangements ............ 78

    Events ........................... 79

    Sponsorship .................... 80

    Environmental information on the Web .... 82

    Environmental information in the showroom .............. 84

    Advertising .................... 85

    Accessories – After Sales Service ........ 88

    Positive equipment ............88Traction control ................. 88Tyres ............................... 89Tyre pressure and tyre pressure monitor (TPMS) .... 92Engine block heater ........... 93Navigation system (or GPS) 94Sunroof (or roof hatch) ....... 94Training ........................... 95

    Inconclusive equipment .....96Automatic ........................ 96Studded tyres ................... 96

    Negative equipment ..........97Four wheel drive................ 97Air conditioning system ...... 98

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    Complementary Activities ..98Retail shop ....................... 98Car Wash ......................... 99

    Offers .......................... 100Climate compensation ..... 101Compensate carbon dioxide emissions with UN-certified development projects ........................ 102Offer compensation in regional wind power ........ 104Membership ................... 104Economical incentives and benefits for green car owners .......................... 105Creating bigger value – sell more than the car! .. 105

    Used cars ..................... 106

    Online shopping ..............107

    Service ........................ 108Materials ....................... 108Sorting (Recycling) .......... 108Collection ...................... 109Replacement vehicle........ 109

    Environmental work in a holistic perspective .......111

    Increased sale of green cars .............................. 112Increased sales of cars with lower carbon emissions ...................... 113Environmental control of the entire business ...... 114Better use of the cars ...... 115

    Frequently asked questions ......................116

    General questions about green-cars ............ 116Questions about fuels ..... 121Questions about electric cars .............................. 127Questions about fuel- efficient petrol and diesel cars .............................. 131

    Good examples ............. 134Clean Drive – environ- mentally interested car dealers in Europe show the way ........................ 135Green car book with tips to save money, fuel and environment ...... 140Eco-driving race – increase interest in green cars and the environment .................. 141Annual review of municipal and county councils fleet-vehicles ......................... 144Green cars like green energy .......................... 147

    Read more .................... 150

    Thanks ..........................151

    Green Motorists are tomorrow’s motor organization .................. 153

    Miljöfordon Syd – cooperation for a better environment ................ 155

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    When The company with a good reputation in social responsibility and quality work are faced with environmental questions about their use of fuel-guzzling vehicles as company cars, a damaging hypocrisy will be re-vealed. Top politicians who do not drive green cars will also be hung out. When business managers are interviewed in magazines and newspapers often their choice of car is presented as a symbol of their green respon-sibility.

    In recent years it has been possible for both individuals and businesses to gain positive recognition for choosing a green car. However as the popu-larity of the green car grows, the green car owner draws less attention by merely having such a vehicle. The green vehicle is becoming a social norm and this means there is a growing general expectation in society that you have one. The pressure is on to meet this expectation and there are negative implications in terms of public image for those who choose models that do not reflect the emerging social standards.

    The dealer helps its customers make the right choice. Otherwise, the cus-tomer will not return, and the customer’s acquaintances will also choose another car dealership. Therefore, car dealers must understand this new logic and act upon it.

    The Swedish car dealership can of course enjoy the fact that it is becom-ing more and more unusual to have to guide the customers towards the green car. It is not so often perceived as weird or less attractive any-more. Many businesses and industries have already decided to phase out non-green vehicles: OKQ8 will just rent out green cars in 2012, Skanska and NCC actively control the choice of company cars to green vehicles, Box Delivery acquire more and more gas cars and taxis, Taxi 020 and Taxi Stockholm have completely stopped buying non-green cars as taxis.

    Environment sell!

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    More and more municipalities will phase out completely the fossil-fuel powered cars and government authorities should in principle just pur-chase and lease clean cars.

    The environmental version is no longer the exception but the rule for several car models. Ford Focus is more common in the ethanol than the petrol version, likewise the Saab 9-3. The Volvo V70, is the best selling car in Sweden, particularly the green car ethanol and diesel versions, with the petrol version rapidly becoming an redundant.Volkswagen Pas-sat is the second-best selling car in Sweden, and it is the gas version that dominates. Two out of three Mercedes B-Class sold have the extension NGT; Natural Gas Technology.

    The green car trend is here to stay - and those who have most to offer in the area attract more customers. As the market de-velops, the bar is also raised for the minimal environmental requirements, and selling argu-ments.

    Environment sell!

    ›› The green car trend is here to stay – and those who have most to offer in the area attracts more customers ››

    What the Swedes “absolute-ly” are willing to do to re-duce their climate impact:

    79 % More fuel-efficient Driving 72 % Buying a greener car 71 % Train instead of the aviation 62 % Driving slower 54 % More car-sharing 53 % Driving less 45 % Using more public transport

    Source: Environmental Protection Agencyt

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    TradiTionally, The environmenTalisTs have asked the car dealer businesses to sell vehicles that are so small, less heavy and with as weak engines as possible. It is no longer generally true. An ethanol-powered Ford Focus Flexifuel has much lower environmental impact than a die-sel-powered Ford Fiesta; a biogas-powered Opel Zafira has significantly lower environmental impact than a gasoline-powered Opel Corsa. This is good news for the car-dealer business, because it means that it is not necessarily worse to sell a larger and more expensive car than one that

    What car should I sell?

    2010 Swedish Car Sale Statistics

    Facts about the 289 684 new cars sold in Sweden in 2010 (figures for 2009 in parentheses).

    • 153 (164) grams of carbon dioxide per kilometer on average emissions

    • 6.2 (6.7) l/100 km in the average fuel consumption (based on carbon dioxide emissions)

    • 34.5 (37.4) percent run only on gasoline and emit an average of 159 (161) grams of carbon dioxide per kilometer

    • 51.0 (41.0) percent run only on diesel fuel and emit an average of 144 (158) grams of carbon dioxide per kilometer

    • 12.2 (18.7) percent can run on ethanol and has an average emis-sions equivalent to 125 grams of fossil carbon dioxide per kilometer (under the conditions prevailing in the first half of 2010)

    • 2.3 (2.9) percent can be powered by gas and has an average emis-sions equivalent to 79 grams of fossil carbon dioxide per kilometer (under the conditions prevailing in the first half of 2010)

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    What car should I sell?

    is smaller and cheaper. To sell cars with a bigger environmental focus is thus no threat for the car dealer’s economy.

    EU-block exemption means that the national general agent can no longer force the car dealers to sell only their brand, or only a certain combina-tion of different brands. There is still a clear danger to loyalty programs and other similar risks if they move away from the officially sanctioned nomenclature, but the possibility is there. This means that your car dealer should consider what brands you sell and why.

    If your usual car manufacturer currently does not have a brand that of-fers green car rated cars in popular categories, consider supplementing with any of the other brands that are big on green cars. If your car dealer company sells several brands and some of them are not future-proof, giving the range a high proportion of large, heavy and fuel-guzzling cars, consider leaving that brand behind.If your are selling green versions of the models, which also have conven-tional gasoline and diesel versions the example the Ford Dealers (Carstedts Car in Umeå and Örnsköldsvik or Hermibil in Växjö and Karlshamn) is worth consideration. They order the Ford Focus and Ford C-Max in the petrol version only by request, but stock large volumes of Flexifuel ver-

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    sions. It has surely contributed to the fact that Ford Focus Flexifuel was the best selling car across all categories for years in Örnsköldsvik.

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    Increased number of Clean Vehicles

    Number of Clean Vehicles

    Total number of sold cars

    2,7 %

    40,1 %

    Newly sold clean vehicles by type

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    Jan–dec 2010 Jan–dec 2009

    Max 120 g, diesel

    Ethanol, E85

    Max 120 g, petrol

    Gas

    Hybrid/EVHybrid/EV

    Gas

    Max 120 g, petrol

    Ethanol, E85

    Max 120 g, diesel

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    The top 20 most sold clean vehicles in Sweden 2010

    Clean vehicle Type of clean vehicle

    Number 2010

    Number 2009

    1 VOLVO V 50 DRIVE Max 120 g CO2, diesel

    7434 4365

    2 KIA CEE’D ECO Max 120 g CO2, diesel

    6557 3739

    3 VOLVO V70II FLEXIFUEL* E85 6433 99984 VOLVO V70II DRIVE Max 120 g CO2,

    diesel5999

    5 VW PASSAT ECOFUEL Gas 4702 40466 RENAULT CLIO FLEX FUEL Ethanol, E85 4441 15927 VW GOLF MULTIFUEL Ethanol, E85 4044 37648 TOYOTA YARIS Max 120 g CO2,

    petrol3850 3615

    9 SAAB 9-3 BIOPOWER Ethanol, E85 3639 319410 VW GOLF BLUEMOTION Max 120 g CO2,

    diesel3347 270

    11 FORD FOCUS 120G Max 120 g CO2, diesel

    2797 348

    12 TOYOTA AYGO Max 120 g CO2, petrol

    2781 1968

    13 RENAULT MEGANE D Max 120 g CO2, diesel

    2310 433

    14 HYUNDAI I30 CRDI Max 120 g CO2, diesel

    2162 734

    15 TOYOTA PRIUS Hybrid 2135 229416 RENAULT MEGANE FLEX

    FUELEthanol, E85 2130 1750

    17 FORD FOCUS FFV Ethanol, E85 1977 328118 VW PASSAT BLUEMOTION Max 120 g CO2,

    diesel1685 59

    19 HYUNDAI I10 Max 120 g CO2, petrol

    1604 1554

    20 AUDI A3 E-POWER Max 120 g CO2, diesel

    1597 857

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    The confusions abouT what a green car actually is, have been huge. That’s because the green car boom is largely emerged from local initia-tives, a “down-up perspective”. The municipalities themselves have been defining what a green car is, to give these vehicles local benefits such as free parking and by asking for those cars qualifying for local benefits when they are purchasing more environmentally friendly vehicles. That is why the Stockholm, Gothenburg and Malmö for a long time have had their own green car definition.

    The situation was understandable but not acceptable. For consumers, it was hard to know what really defined a green car. Car-dealers found it difficult to advertise their green cars and critics have been easily able to dismiss the phenomenon with, “You do not even know what you’re talk-ing about.”

    Recently, there has been much progress. The government instructed the SRA (Swedish Road Administration) to develop a national clean vehicle definition, which now forms the basis, inter alia, for its own vehicles and purchase, as well as the former “green car bonus” to private persons and for the currently running five-year vehicle tax exemption for all categories of buyers when they purchase a green car.The Alliance (the group of parties in the Government) has indicated that the clean vehicle definition will be tightened in 2013. The opposition par-ties also agree about this, so the question is how much and how soon? We believe the following is likely:

    • more car sizes. A fuel consumption of 4,0 litres petrol/100 km is im-pressive for a mid-size car as Toyota Prius, but not for a mini-car as Smart. It is also impressive with a fuel consumption of 4,5 litres diesel / 100 km for a big car such as Volvo V70 and Volkswagen Passat. There-

    What is a green car?

  • 15

    What is a green car?

    fore it is reasonable to introduce different car-sizes, which was already discussed when the clean vehicle definition was first introduced.

    • safety. The green car should have at least four stars in Euro NCAP, or similar, to get green car benefits, and anti-spin control system (as ESP) should be standard equipment.

    • lower limit on the emissions of fossil carbon dioxide. The current requirement of 120 grams of carbon dioxide per kilometer will reason-ably be reduced, perhaps to 100 grams. It affects mainly the many diesel vehicles emission just below 120 grams per kilometer.

    • Increased efficiency requirements. Vehicles powered by renewable fuels will probably not be allowed to have emissions of carbon dioxide in excess of the average car, which means about 180 grams of carbon dioxide per kilometer. The requirement affects the gas and ethanol ve-hicles with high fuel consumption.

    • Stricter requirements for nitrogen oxides. Today’s demands for particle purification supplemented with reasonable requirements for ni-trogen oxides, which imposes some form of treatment. The requirement affects diesel cars.

    • noise. It is likely that we for the first time get noise requirements of new green cars, around 73 dB for petrol cars and slightly higher for diesel vehicles.

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    However, it is unlikely that Parliament will rule on refueling requirements, ie, that ethanol and gas cars, for the most part have to be fuelled with the “right” fuel, ie ethanol and gas, so that no benefits are awarded to clean vehicles that are in fact powered by gasoline. This requirement does exist in several municipalities, connected to their local green car benefits, but the Green Motorists party pre-election questionnaire showed that politi-cal parties are opposed to the supervision and control that this would mean.

    It is also not likely that the tyres will be required to be easy rolling and / or free from carcinogenic HA oils, as required by the EU a ban on HA-oils and labeling requirement in the tread from 2011, with a labeling of the rolling resistance by 2012.

    Converted cars – such as a one-year-old gasoline-Saab who is converted to ethanol – are also subject to the environmental car definition, provided they meet emissions standards.

    Stockholm, Gothenburg and Malmö have long had their own, separate clean vehicle definitions, but have now shifted to the same definition as used for vehicle tax exemption. However, in Gothenburg, it is supple-mented with a requirement that ethanol- and gas cars, will run on at least 70 percent of the intended (greenest) fuel. Green cars must also have studdfree snow tires.

    Other municipalities adopt the same definition as exists for the national green car incentives, however there are some conflicts due to other na-tional governmental decided rules:

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    • The law of Congestion tax in Stockholm. All cars driven by renew-able fuels, hybrid technology or electricity and registered before 1st of January 2009 are exempted from the congestion tax in Stockholm, no matter how much they consume. But no cars running on only fossil fuels are exempted, no matter how low consumption they have. Cars regis-tered later than 1st of January 2009 are not exempted from tax either.

    • The law of beneficiary tax (for company cars). Tax reduction ben-efits are available for ethanol cars (20 percent reduction), gas, electric and hybrid electric vehicles (40 percent), but there are no benefits for low consuming / energy effective cars running only on fossil fuel. This reduction is valid until the end of 2011 for ethanol and hybrid electric vehicles, and until 2013 for gas cars, plug-in hybrids and electric cars with emissions below 50 gram CO2/km.

    The majority of the green cars on the market meet several of the defi-nitions, for example, most ethanol cars on the market are green cars under all three definitions, but a fuel effective diesel is a clean car only according to the definition for vehicle tax exemptions, while an SUV with hybrid technology is a clean car according to the congestion tax law and beneficiary tax system.

    In 2012 a new “green car super bonus” will be implemented, which is valid for plug-in hybrids and electric cars with emissions below 50 gram CO2/km. As a trader you must keep track of these definitions, so you do not advertise vehicles as green cars even though they are not, or fail to highlight that the vehicle you are marketing meets at least one of the clean vehicle definitions.

    ›› Converted cars… are also subject to the environmental car definition, provided they meet emissions standards ››

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    Government agencies are buying only a few thousand cars a year, so it’s not really a particularly important market for car sales, except in small towns where a relocated government agency can be a dominant buyer. However, the state purchasing and leasing requirements, are a bench-mark for the rest of society, and the demands placed on the state vehicle purchases are likely to become general a few years later. It is therefore important for the car dealers to be aware of the new demands on govern-ment cars.

    The cars must meet clean vehicle definition:The basic requirement for the definition is that the cars must meet EURO IV (cars registered before 01.01.2011) and EURO V (cars registered from 01.01.2011) or alternatively “EURO Electricity Hybrid” or EURO “Electric-ity”. For EURO IV – diesel cars it is also necessary to meet- particulate emissions lower than 5 mg/km. In addition: • Conventional cars (including hybrid cars): Petrol and diesel cars with

    carbon emissions that are not exceeding 120 grams per km. • Alternative fuel-powered cars: Cars that can run on fuels other than

    gasoline, diesel or LPG and which have a fuel consumption not exceed-ing 9,2 litres of gasoline equivalent/100 km or 9,7 Nm3 (with atmos-pheric pressure) of gas/100 km.

    • Electric cars: A car belonging to the class “EURO Electricity” and an electric energy consumption per 100 kilometers which does not exceed 37 kWh (kilowatt-hours).

    In addition, they also must meet a series of stringent security require-ments:• At least five stars and 31.5 points in Euro NCAP tests under the 2009

    criteria (at least 32.5 in tests before 2009)• Seatbelt reminder both for driver’s and front passenger (2 points)

    Government vehicle purchases

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    Government vehicle purchases

    • Protection against whiplash injuries (2 points, or yellow level of the Thatcham tests)

    • Pedestrian protection (14 points)

    The requirements formulated by the Transport Administration, as of September 15, 2010, a number of additional requirements for their own cars:• Maximum noise level of 73 dB for gasoline-, ethanol- and gas cars and

    74 dB for diesel cars• Seatbelt reminder in the back seat also for leased cars (3 points Euro

    NCAP)• CO2 emissions (g / km) maximum calculated according to the following

    formula (where m0 = vehicle curb weight in kg): o Petrol and diesel cars: CO2 = 0.95 * 130 +0.0457 (m0-1372) o Ethanol and gas cars: CO2 = 1.54 * 130 +0.0457 (m0-1372)

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    Transport Administration will from 2012 tighten up the requirements for their own cars:• Maximum noise level 72 dB for all cars• Seatbelt reminder to all locations (3 points)• Protection against whiplash injuries (3 points, or Green level in That-

    cham tests)• Pedestrian protection (21 points, but alternative methods should be

    evaluated, it could for example be about systems that automatically detects and stops in front of obstacles)

    • CO2 emissions (g/km) maximum calculated according to the following formula (where m0 = vehicle curb weight in kg):

    o Petrol and diesel cars: CO2 = 0.95 * 130 +0.0457 (m0-1372) o Ethanol and gas: CO2 = 1.31 * 130 +0.0457 (m0-1372)

    Transport Administration’s CO2 formula allows heavier vehicles to emit more than lighter, with approved emission of up to 147.6 grams for a car with a curb weight of 1900 kg (which is the above limit of weight). These cars are not meeting the general clean vehicle definition and therefore cannot be purchased or leased by any authority. The CO2 formula may thus in practice only be relevant for cars weighing less than 1372 kg and must emit less than 120 grams, and some thirsty ethanol cars, which will be screened out.

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    Greener and safer cars need to be implemented faster on the market to be able to reach a sustainable transport sector in the future.

  • 22 23

    Green car benefits

    Every car dealer with clean vehicles in their range should be highly aware of the green car benefits. It is easier said than done as they change over time, there are different benefits for different customer groups and to supplement the national benefits are a number of local ones. Below is a description of the main current benefits in Sweden. Stay up to date at different national websites for example; miljofordonsyd.se or gronabilister.se.

    Vehicle tax exemption for green carsAll new green cars according to the national definition are exempt from vehicle tax for five years. This benefit was introduced on 1 July 2009 which replaced the previous government’s green car bonus and in contrast to that, is valid for all customer groups. Individuals, corporate, public sector - all covered. The vehicle tax exemption stays with the car and thus also applies to the purchaser of a used green car registered after 1 July 2009. Since 2006 the car tax in Sweden is based on the car’s carbon dioxide emissions, with a basic fee of 360 SEK plus an additional 20 SEK per gram of carbon dioxide emissions above 120 g CO2/ km, or 10 SEK per gram for cars equipped to run on ethanol, gas or electricity.

    For diesel driven passenger cars the tax is multiplied by a fuel factor of 2.55 plus the additional environmental fee. The additional environmental fee is 500 SEK for cars that were elligible for tax (in Sweden) for the first time before the end of 2007, and 250 SEK for cars that were eligible for tax (in Sweden) for the first time after 2007. The fuel factor and the ad-ditional environmental fee for diesel cars depends on the fact that diesel fuel is taxed less than gasoline and emission standards are lower than for petrol cars (higher emissions are allowed).

    http://www.miljofordonsyd.sehttp://www.gronabilister.se

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    Let us illustrate with a number of different versions of Sweden’s best-selling car:• Volvo V70 D3 diesel from 2011(163 hp, 137 g CO2/km): 360 SEK+ 340 SEK (20 SEK/gr CO2/km >120gCO/km, in this case 17) = 700 SEK x 2,55 (fuel factor) + 250 SEK (additional environmental fee) = 2 035 SEK• Volvo V70 T4 petrol (180 hp, 157 g CO2/km): 360 SEK +740 SEK (20 SEK/gr CO2/km >120gCO/km, in this case 37) = 1 100 SEK• Volvo V70 T4 flexifuel (ethanol, 180 hp, 163 g CO2/km): 360 SEK + 430 SEK (10 SEK/gr CO2/km >120gCO/km, in this case 43) = 790 SEK• Volvo V70 Bi-Fuel (biogas, 231 hp, 209 g CO2/km): 360 SEK + 890 SEK (10 SEK/gr CO2/km >120gCO/km, in this case 89) = 1250 SEK

    For new cars, vehicle tax, is therefore usually one or a few thousands SEK per year, which also means that the vast majority of consumers do

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    not care about the amount of tax when they are choosing size of the car. Although the exemption from vehicle tax over five years can be just as big as the former green car bonus, it is still a much less compelling argu-ment than to get 10 000 SEK as a letter in the mail a few months after purchase. This is also the situation for the company car market, where employers pay the vehicle tax and hardly see it as an important param-eter to consider. For second-hand market, the reverse is true: While the green car bonuses were just available for new cars and therefore had no relevance for the second owner who bought a one year old green car, now have for the same car still four more years of tax exemption.

    Since the car tax is based on the CO2- emissions, with an increased tax on diesel cars and reduced taxes for ethanol and gas, the tax exemption favors the diesel cars that by the smallest of margins qualify as green cars. For the many diesels cars that emit 119 grams CO2/km the vehicle tax exemption is a discount of just over 10 000 SEK over five years. For a fuel efficient gas car the tax exemption is, however, only worth about 5 000 SEK over the same period.

    The government estimates that 30.000-50.000 new cars per year re-ceive the exemption, but “This assumes that the requirements gradually tightened so that the proportion of clean vehicles by new car sales will be approximately constant.”

    For over ten years ago stricter exhaust classification, Environment-class 1, was introduced. Initially it was voluntary, and cars that met the level were exempt from vehicle tax for five years. Vehicle taxes were then based on the car’s curb weight, significantly lower than it is today for most vehicles. Hyundai used this in their marketing and it was an important reason that the brand increased at the Swedish market. Similarly, it is

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    of course possible today to use the vehicle tax exemption in the market-ing. We consider it more successfully to stress the “liberation” than the economic output, as it usually is less than what the customer thinks. The exception may be diesels with emissions just lower than 120 g CO2 / km, where the benefit could actually be a purely economic sales pitch.

    Because vehicle tax exemption is so new, there are few examples of how it is used in the sale of used cars, but it is possible, unlike the green car bonus.

    Green car super bonusBefore the 2010 election the Alliance suggested “a new green car super bonus of 40 000 SEK per car for cars that has the lowest carbon dioxide emissions “ spelled in emissions below 50 grams CO2 per kilometer. The super bonus will be introduced in 2012 and the Alliance calculates that 5000 cars are covered under the mandate period (2012: 500 cars, 2013: 2000 cars and 2014: 2500 cars), less than one percent of new car sales during the same time.

    It is unclear how emissions should be calculated - the EU’s method, EPA’s,

    Is the national vehicle tax exemption for green cars valid for car dealers?

    To be able to sell more green cars the car dealers need to take home green cars for demo purposes. The answer is that the demo cars registered on the car dealer get the vehicle tax exemptions same as any other company that buys a green car.

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    BilSweden’s or any other. Thus, it is also unclear to what extent biogas vehicles are covered, but the Alliance highlights the super bonus as an incentive for electric cars. Then the additional cost for these is consider-ably more than 40 000 SEK, it is unclear if the sale actually will increase according to the super bonus or if it becomes a form of encouragement to those who would anyway have acquired the electric car.

    The green car super bonus does not replace vehicle tax exemption, which also means that the cars that get the bonus can also get the tax exemp-tion from vehicle tax for five years. Together with other benefits, it may nevertheless help to overcome the feeling that electric cars are very expensive to buy and can therefore be interesting to use in marketing.

    The law of beneficiary tax for company carsNearly two-thirds of new car sales in Sweden are company cars. The per-centage varies widely among brands, Skoda Fabia was earlier the most sold car in Sweden to private persons, but not at the top-ten top-list overall, since it is not often sold to companies.

    The high proportion of company cars, means that the tax rules for com-pany cars have great significance for which cars are hot in the showroom. He who has an ethanol car is entitled to 20 percent reduction in the ben-efit value, while those who have a gas car, hybrid or EV gets 40 percent reduction in the benefit value.

    The reduction applies to all above mentioned vehicles, without any re-quirement of consumption or energy efficiency. Nor is there any require-ments regarding using the greenest fuel like ethanol for the ethanol car, biogas for the gas car etc. In order not to increase the vehicle prices, the

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    reduction is a maximum of 8 000 SEK for ethanol vehicles and 16 000 SEK for gas and hybrid and electric cars.

    The reduced benefit value is calculated in comparison with the equivalent petrol car, which means that the additional cost of ethanol, gas or hybrid technology does not contribute to an increased benefit value .If a simi-lar car to compare with is missing, for example in the case with Toyota Prius where no equivalent conventional petrol car exist, a clearly less expensive reference model has been found, which also contributes to the favorable tax treatment.

    The reduced benefit value does not apply to the particularly fuel-efficient petrol and diesel cars that meet the government’s green car definition.

    Since 2007, the employer calculates the benefit of the green car, without application to the Tax Office. It is a simplification in the past because you had to apply for reduced tax value, with an application and a decision car by car. The correct value for the reduction of the benefit can be found at the Tax Agency website.

    The reduced benefit values for company cars is a very important ele-ment in the sales of green cars, because it means several thousands SEK directly in the wallet of the person who select a green company car. At a marginal tax rate of 52 percent means around 8000 SEK after taxes for them who choosing a gas car or hybrid car instead of the equivalent petrol car around 8000 SEK every year. Those who choose an ethanol car earn about 4000 per year after taxes. In addition, the employer will save ap-proximately 5000 and 2500 SEK in reduced social costs per car per year.

    ›› The reduction in benefit value is a very important element in the sales of green cars ››

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    The current reduction in the benefit values for ethanol- and electric hy-brid cars applies until 2011. For biogas driven cars, electric vehicles and plug-in-hybrid cars, the reduction will last until 2013. Then, we will very truly see a technical, neutral and climate based beneficiary tax for com-pany cars.

    Exemptions from congestion taxExisting ethanol, gas, hybrid and electric cars, which were first registered before 1 January 2009 are exempt from congestion charges in Stockholm until 2012. Cars registered subsequently, and thus all new cars are sub-ject to the congestion charge in the same way as non-green car vehicles. This rule may seem illogical because the newer green cars often have lower emissions than a few years old. It was drafted to halt the fall in in-comes from the growing percentage of clean cars, while those who have already received the exemption would not experience a betrayal.

    The congestion charge varies between 10 and 20 SEK per crossing, with a limit of 60 SEK per day. The fee is only weekdays, daytime. For those who have an exemption for green cars, this means a saving of up to 15 000 SEK a year (just over a thousand SEK a month), while the one who making a round-trip travel through duty, high fee twice a week saves about 4000 SEK per year. Since the fee is now deductible when it incurred in connec-tion with services, reducing the actual cost significantly for large parts of the vehicle fleet. On the other hand, the profit is generated each year!

    Congestion tax exemption does not apply when the car is transferred/sold and therefore is not any real selling point for the car dealers. It is important to be clear about this so that the customer feels cheated. Congestion charging will be introduced in Gothenburg in 2013, but the green cars are not exempted.

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    Parking benefitsAbout 80 municipalities in the country has parking charges for street parking, the other has, in principle, free parking everywhere. Circa 30 of the municipalities that have parking fees have special benefits for green cars, often in the form of free parking. The autumn 2010 local benefits are available in for example Gothenburg, Malmö, Norrköping, Jönköping, Kristianstad, Kalmar, Linköping, Karlskrona, Växjö, Umeå and Östersund – all together are about half of total new car sales in locations with local parking facilities.

    In recent years, a number of municipalities abolished or made restrictions on the parking benefits, such as in Stockholm, while Malmo is not allow-ing new parking permits for green cars and is gradually phasing out the existing ones. Malmö’s argument is typical: “The reason that the city of

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    Malmö has chosen to abolish the privilege of parking with green car is that it is no longer driving the trend toward cleaner cars and to increase new sales of clean vehicles in Malmo. When the benefit was introduced, 16% of new sales in Malmo were green cars. 2009 that figure had increased up to 39%. Malmö City made the decision to abolish the privilege for that it simply is not as aggressive now as it was when it was launched.”

    That it also has reduced the municipal parking revenue has certainly had an impact, we have not seen any municipality that offset the benefit green car with higher fees for non-green cars.

    The benefits are different, with limitations in time - how long one can park for free in almost all municipalities and in place - where to stand - in quite a few. For example, in Umeå benefits only exist for specific car parks and for few hours. More and more municipalities change condition in the privilege to be mainly driving his green car on the intended fuel such as ethanol. This is usually followed up by spot checks, where the request should be able to show receipts or anything that shows that you have fueled your green car “correct”.

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    Many municipalities are requesting that you should obtain a permit, which in most places are free or nearly free, but in extreme cases can cost up to four hundred SEK. The license is valid in some cases indefinitely, but usually last three to four years and the least generous cases, a single year.

    The value of the parking benefit depends of course on how much it costs to park in general with conventional cars, and how generous the benefit is designed. In cities with high parking charges, such as Gothenburg, the benefit can be worth more than 10 000 SEK per year, while it is only worth around thousand SEK in cities where parking fees are lower.

    The benefit is not just about money. Many still believe that this means inconvenience and trouble to choose a green car - parking privilege dis-prove it. He who has a green car might not be so worried about parking controls, and do not need to change money for parking meters or sus-pend their meetings to put “more money on the car.” This part of the benefit is difficult to evaluate, but is a clear added value to be highlighted!

    Car dealers have in general been bad in the use of local parking benefits in its advertising, including that they differ so widely from one munici-pality, so they cannot get much help from a central source. Every car dealership with clean vehicles in the program should review if there are local environmental car benefits like free parking, and exactly how they are designed. If a form must be filled in and sent to the municipality, that form should be in the car sales as a service and as a help to increase the sale of green cars.

    Uppsala and Solna have politically decided on free parking for green cars, but still not implemented it. If it is similar in your local community, you

    ›› More than 30 of the municipalities that have parking fees have special benefits for green cars ››

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    should be an environmentally driven car dealer and actively influence the council leadership to implement the decision and help ensure that it is implemented properly. In other municipalities where there are parking fees, but no green car benefits, the car dealers can agree about propos-ing this as a way to reduce environmental and climate damage from the motor traffic. Partial financing of additional costFifty municipalities have or have recently had a local co-financing of the additional cost of green cars. It usually means that the purchaser of a gas car with around 30 000 SEK extra cost, can receive up to 30-50 percent of this additional cost from the municipality. Sometimes the incentive is like a fixed amount such as 10 000 SEK, sometimes the municipality re-quire that you have owned the car for a while and / or that you are able to show that it is mainly fueled by the “right” fuel to get compensation. In some municipalities, co-financing is limited to gas cars, which of course has the largest additional cost, but most often the case also for ethanol and hybrid cars. Conventional cars that are fuel efficient and in that case fulfill the green car definition have often not a clear additional cost and are therefore not obliged to these local benefits.

    Meanwhile, the national green car bonus when valid, meant that private persons could not take advantage of co-financing, according to Environ-mental Protection Agency’s assessment. Now when the national bonus is abolished, it is again possible. Hardly any municipality, however, has any such financing budget left today, but in Östersund they do part finance the purchase of electric vehicles with up to 50 000 SEK for all customer groups.

    Part-funding was rarely used as a selling point by the car dealers, which

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    often do not even have proper information on how it works to their clients. Find out if your community or neighboring municipalities have partial funding of additional cost or other similar incentives for clean cars, how it is designed, how long it is valid and how much money remains in the project. Then use this to sell more green cars, including having an avail-able summary of all benefits for each particular vehicle presented for the offers you send out. Fuel priceAs a “rule of thumb” it is two to five SEK cheaper per 10 km to drive on gas than petrol, and about one SEK cheaper per 10 km to run on ethanol than petrol.

    An ethanol driven car that runs on E85, consumes around 35 percent more than a petrol driven car – this is true for most of available models. Multiply the price of ethanol at the nearest station by 1.35 and you will get the equivalent price of petrol. If the ethanol costs eight crowns, it will always be cheaper to run on ethanol as long as petrol is more expensive than 11,70 SEK per litre. One of the most common objections to buying ethanol is that “they drink so much fuel”. It is therefore important to educate existing and potential customers about the calculations above!

    From 1 November to the end of March each year, the share of gasoline in E85 is increased from 15 to 25 percent (in practice, “E75”), which increas-es the cost of fuel by just over 0,50 SEK per litre. The real cost is lower because it takes about 5 percent less fuel. Over several winters this has meant that it was more expensive per mile to run on E85 than gasoline. Taking the total year into account, however, it has always been profitable to run on ethanol. For those who still cannot justify the added wintercost, it is possible to fill up flex-fuel cars with petrol when it is cheaper. How-

    ›› Car dealers have in general been bad in the use of local parking benefits in their marketing ››

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    ever, the environmental benefits will be lost and it would be a shame if car dealers were to use this argument.

    Gas (both natural gas and biogas = methane gas) is measured in standard cubic meters. A Nm3 of biogas is equivalent to about 1.1 litres of petrol, while a Nm3 of natural gas is equivalent to about 1.25 litres of petrol. If, for example, biogas costs 9 SEK per cubic meter, it is equivalent to a pet-rol price of 8.10 SEK per litre. With a real petrol price at 13 SEK per litre this means that you save almost five SEK per 10 km on selected gas cars. Unlike gasoline, diesel and ethanol, the price of gas varies considerably in the country, so it is important for the dealer with gas cars in the program to know about the local gas prices and use it for calculations for potential customers. It is also important to know if the local gas company has any offers - they sometimes give a free gas-check to those who purchase a gas car, or offer free gas for a couple of weeks.

    Fuel efficient versionsDRIVe, Blue Motion, Blue Efficiency, Efficient Dynamics, Greenline ... just about every brand now offers fuel-efficient versions of their basic models.

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    The concept varies, but these models generally consist of a lower chassis and refined aerodynamics, low rolling resistance tyres and higher tyre pressure, and in some cases, Start-Stop technology, modified valve or other engine modifications. The additional cost varies from a few thou-sand SEK to well over ten thousand SEK. Many fuel efficient versions, but far from all, meet the green car definition. Most are diesel cars but there are also efficient versions using other fuels.

    For the car dealer, the efficient versions provide higher profits because the price is higher and margins are usually the same. But sales are also a challenge because in many cases it is difficult to recoup the additional cost in the form of a reduced fuel bill - saving only centilitres, the savings are only around a thousand SEK per year. For those with the fuel efficient versions, which do not meet the green car definition the trump card is the exemption from vehicle tax which is high for diesels. For efficient versions that do not meet the green car definition this is the selling point rather the pleasure of having to fill up very rarely, the feeling of responsibility towards the environment and the assumption of a higher resale value when you come to sell.

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    Many car tests of fuel efficient versions end up with questioning:”Why sell the non-efficient versions at all?” For non-motor journalists, the choice of the efficient version is not that obvious. The cars with hard pumping, low rolling resistance tyres can be perceived as less comfortable, the higher gear ratio can cause the car to feel slow. To be successful in selling the fuel efficient version, it is particularly important that the car dealer ex-plains the technology and gives the customer time to become familiar with it. Taxation of different fuelsThe tax on fuel is divided into three parts; energy tax, carbon dioxide tax and VAT. Together, these three taxes on fuel generate over 50 billion SEK to the Swedish state per year. Alternative fuels (the ethanol part of E85, biogas, natural gas and RME) are subsidized from the energy tax. Biogas, RME and E85 (the ethanol part) do not have carbon dioxide tax because it does not “generate” any carbon dioxide. The latter is therefore no subsidy! Many are worried that the state cannot in the long run afford to give up tax revenue from renewable fuels, especially if their share is increasing rapidly.

    If energy tax similar to that for gasoline were to be introduced for E85 and biogas, they become closer to three and just over four SEK more ex-pensive than today. Thus, they would hardly be competitive with gasoline or diesel. The current energy tax exemption for E85, RME and biogas, however, is running at least until the year 2013, so there is no reason for concern at this time. In addition, it seems very unlikely that a majority in the parliament would approve any such move as renewable fuels in practice would be eliminated. On the contrary, the present government has decided that the share of biofuels in the transport sector will reach 10 percent in 2020, which represents a doubling of today’s share, and

    ›› Green cars are attractive both as new and as used cars ››

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    that the transport sector will be un-dependent of fossil fuels by 2030. The Opposition’s main objection was that these changes are not occuring fast enough.

    Comparison by different fuels, prices and taxes (SEK)

    Biogas 1 Nm3

    Natural gas (CNG) 1 Nm3

    E85 1 litre 2)

    E75 1 litre 2)

    Petrol 1 litre 1)

    Diesel 1 litre

    RME 1 litre

    Produktionskost-nad, vinst mm

    9,36 8,42 6,81 6,62 5,20 6,29 9,90

    Energiskatt 0,00 0,00 0,46 0,77 3,06 1,52 0,00Koldioxidskatt 0,00 1,58 0,37 0,61 2,44 3,02 0,00Moms (25%) 2,34 2,50 1,91 2,00 2,68 2,71 3,30Pris vid pump 11,70 3) 12,50 3) 9,54 9,99 13,38 13,54 13,20Skatt per volyms-enhet

    2,34 4,08 2,73 3,37 8,18 7,25 3,30

    Energiinnehåll motsv. 1 lit. bensin

    0,91 0,80 1,36 1,32 1,00 0,87 0,93

    Pris motsvarande 1 liter bensin

    10,65 10,00 12,97 13,19 13,38 11,78 12,28

    1) Petrol with 5% ethanol (low blended) 2) CO2 tax and energy tax for the petrol in E85 (15 %) and E75 (25 %). E75 is the ethanol fuel for passenger cars during the winter time. 3) The price for biogas (CBG) and natural gas (CNG) vary significantly across Sweden. See this price as an example. Source: SPI, SCB, OKQ8, Fordonsgas Sverige, Skatteverket. Updated: 2011-02-05

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    The Government has announced tax increases on diesel of 0,20 SEK per litre in 2013. The taxation of both petrol and diesel should be adjusted annually in line with the consumer price index, which is not applicable to ethanol and electricity for the simple reason that they are not taxed. In addition, oil prices are expected to rise over time, as the supply decreases and demand increases. The rate of increase is difficult to say, but very few believe we will see a lower oil price in the future. All of this should mean that in the future it will be more profitable to choose a car that can run on renewable fuels than one that can only be driven on petrol and diesel.

    Trade-in ValueWhich cars are worth the most in the future - those that consume more or those that are more fuel efficient? Those that can only run on fossil petrol and diesel, or those that can also run on renewable fuels? The answer is obvious: The green car has on average a higher resale value than the non-green car and sold in greater numbers, leaving the exhibition hall faster than non-green-cars.

    When the leading automobile consumer paper reviewed two directly com-parable models, including a conventional and a green car (Ford Focus petrol and Flexifuel), they found that the green car had a 10 000 SEK higher resale value. Actually, it is obvious that the ethanol-Ford will be worth more, it can of course do all that the petrol-Ford can. It can also be operated using a fuel which on average is just over a SEK cheaper per 10 km, it has free parking in over 30 municipalities and is entitled to a 20 percent reduction in benefit value. For Saab’s ethanol car, the difference should be higher, since they also have more power than equivalent petrol cars. A direct comparison is difficult because the Saab in practice doesn’t have a similar version that can only be driven on petrol. In addition, we purchased a time when many Saab 9-5 Biopower were being used as

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    company cars, which also meant that very many came out into the used market almost simultaneously. Of course this is never good for the resale value, no matter what fuel the car uses.

    In terms of gas cars, the picture is more mixed, with a relatively low resale value of early models, but better for the newer models, and with large regional differences in pricing however, the initial cost of a gas car is usually higher. As the cost for driving 10 km is so much lower for the gas car, the benefit can be quite positive anyway compared to the petrol car - even for the first user, while those looking for a used gas car can benefit significantly.

    To the left we have compiled data (springtime 2011) from the auction company Kvarndammen, showing resale values for car dealers, for some common models that have almost identical petrol, ethanol or gas ver-sions.

    As can be seen, the green car is in all cases worth more than the non-green car. In some cases the differences are clearly larger than the differ-ence in price from new, such as for the gas-powered VW Passat and the taxi driven Saab with high mileage. In other cases, the additional cost is roughly the same as the purchase price, while the old gas-powered Volvo V70 has lost almost all of the additional cost compared to the petrol ver-sion. However, this is also the only example we have found, where it may

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    be perceived as a disadvantage to have a green car version; a green car version where the gas tank encroached heavily on the luggage and the mileage was low in both gas and petrol.

    Car brand Price ethanol/gas (SEK)

    Price petrol (SEK)

    Ford Focus C-Max 1.8 125 hp Style, 2006, 75.000 km

    Ethanol (Flexifuel): 85 700

    82 100

    Mercedes B 170, 116 hp, 2009 30.000 km

    Biogas (NGT): 191 600 180 200

    Peugeot 307 1.6, 5 doors, 110 hp, 2007, 60.000 km

    Ethanol (Bioflex): 96 800

    91 900

    Saab 9-5 2.0 t SportCombi Lin-ear 2007, 150 hp, 60.000 km

    Ethanol (Biopower) 134 400

    120 900

    Saab 9-5 Sports-combi 2.5t (180 hp), 2006, 250.000 km

    Ethanol (Biopower): 65 800

    49 400

    VW Passat Vari-ant Sportline 2010, 15.000 km

    Gas (EcoFuel, 1.4 150 hp): 263 500

    204 100 (1.8 TSI 160 hp)

    Volvo V70 II 2.0 Ki-netic, 2009, 30.000 km

    Ehtanol (Flexifuel): 198 100 (140 hp)

    195 800 (140 hp)

    Volvo V70 Business/Kinetic 2005, 90.000 km

    Gas (Bi-Fuel): 121 900 121 000

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    The hybrid car Toyota Prius, at times the very symbol of green cars, are not available in any non-green car version, but a 2007 model of the last generation that has been driven 75.000 km is still worth 120 800 SEK.

    The petrol and diesel cars that are so fuel efficient that they meet the government’s green car definition, with associated benefits, also have a higher resale value than similar models whose emissions are above the limit (over 120 gram CO2/km). Most of the extra cost of cars such as Volvo’s efficient DRIVe models or similar Volkswagen Blue Motion may be paid back when it is sold, and while you own it, you experience lower fuel costs. The market for these fuel efficient diesel cars is still so new that we have no clear figures. However, we have been able to compare one of the very first green-cars, the Audi A2 in 2001 in the fuel efficient diesel version (1.2 TDI, 61 hp), with the same car, non-green car rated and with a bigger diesel engine (1.4 TDI, 75 hp). After 100.000 km the fuel efficient version with the smaller engine was worth 98 000 SEK compared to 80 500 SEK for the more powerful diesel version. This is also much more than for a newer, bigger and more powerful diesel car and with lower mileage.

    When it comes to used electric cars, there are so few available that it is difficult to assess the resale value yet. The condition of the batteries is the most important issue to check to be able to define the resale values for an electric vehicle: The electric motor and the gearbox (which is usu-ally much simpler than for cars with an internal combustion engine) are even after some time almost as new. Most electric cars are “short mileage cars” because of the short range. When batteries need replacing, it’s a great investment to trade up, so great that many electric cars ten years old or more will be forthcoming even though they are otherwise fresh. If the previous owner replaces the battery, the car may have about the

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    same value as its gasoline counterpart, but this still means that the first owner takes on much of the cost.

    Generally, a high resale value is of course good for the car dealership. Certainly, you pay more for the cars you trade in when the customer buys a new car, but above all you get more when selling them. In addition, it is good to be able to show the above figures to those who are hesitating to buy a new green car, on the basis that it is sometimes suggested that green cars would mean lower resale values than other cars.

    ImageIt is more and more common for the media, interest groups and others to comment on which cars companies or prominent politicians use. Thus, it has quickly become a risk factor to choose models that are not perceived as “politically correct” and which do not conform to the environmentally-friendly image you want to convey. To take such a risk is now quite un-necessary because there are eco-friendly cars in each size class available from most major car companies.

    Taxi 020 and Taxi Stockholm received together in 2010 two environmen-tal awards; the transport industry’s Pegasus Prize and the Centre Party’s environmental award. The Pegasus Prize’s independent jury stated in its reasoning that the two companies’ “for a long time and in a consistent and structured approach have developed their businesses into sustain-able, inspiring and important leaders in their industry. The improvement work in 2009 reached their highly stated ambitions and the companies are showing significant and concrete commitments for the future. Both companies have improved their environmental performance through a conscious re-structuring of the vehicle fleet.”

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    ›› Companies like Taxi 020 and Diskteknik have actively used theirs high proportion of green cars their marketing ››

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    “When we decided to aim for 80 percent green car taxis by 2010, there were no customers who requested environmental taxis and public pro-curements had few environmental requirements. But we had the drivers with us from day one, and today we see customers passing by other taxis to travel with us, while we are also now winning contracts because of our environmental initiatives, “said Frederick Scholander, CEO for Taxi 020 in Sweden. The taxi company now has almost 80% green cars, is winning government contracts, thanks to its green image, is first choice for many environmentally conscious customers and has a distinct competitive ad-vantage in areas such as Arlanda airport which have environmental taxi requirements.

    In the same way, Hertz has been awarded, by the Green Motorists, the Environmental Best Car Hire Company three years in a row , thanks to a high proportion of green cars. Among municipalities, there is tough competition to be the best in the area of sustainable transport. Knivsta was beating the drums when the Miljöfordon Syd’s national municipality survey showed that they, together with Lessebo municipality were first to reach 100 percent green passenger cars, while the Stockholm Environ-ment Vice Mayor shone in front of television cameras after been appoint-ed the best green car municipality in a survey by the Green Motorists.

    Those who do not do the right thing will, however, risk public criticism. The County Governor of Örebro was portrayed negatively in the news-paper Expressen as he did not drive a green car, and both DHL and SJ received criticism from the Swedish newspaper Svenska Dagbladet as they have company cars but do not choose green cars. DHL’s investment in gas-powered vans, by contrast, received positive attention.

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    Lessebo was in 2009 awarded to the best clean vehicle municipality of the year in Sweden. The municipality has 100 percent clean vehicles. The committee of the board around its energy effective Skoda-cars and celebrates the victory. From left: Inga-Britt Andersson (municipal director), Göran Borg (S), Anders Jonsäng (C), Monica Widnemark (S, municipal commissioner), Evert Nilsson (S), and to the right Jan-Olof Franzén, (M).

    For the car dealer who wants to help its customers to achieve a positive image and avoid criticism, it is worthwhile to highlight such examples. It also strengthens the ties to the customer and increases the chance that she or he will return. Miljöfordon Syd and Green Motorists are happy to assist with more examples!

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    Electric cars

    2011 is The firsT year when major brands will start selling electric cars in the regular car market - until now, electric cars were either sold by the odd brand or only delivered in the form of test fleets.

    To sell an electric car will be quite different from selling other types of cars, including other types of green cars. The electric car will not be able to compete on selling price during the first few years, because most elec-tric cars are more than 10 000 Euros more expensive than the equivalent petrol or diesel car, and thus remain over 5 000 Euros more expensive even after a possible “super-green car incentive”. For the dealer it is in-stead important to present a long-term vision where the car’s low operat-ing costs are discussed. However, even with these low operating costs it

    Model Selling price new car

    Fuel cost 10.000 km/year in 5 years

    Other costs

    Renault Fluence ZE

    226 750 SEK (with super-green car incentive, 40 000 SEK)

    10 000 SEK (2 SEK/ 10 km)

    Cost for battery 48 000 SEK (799 SEK/month). Service cheap, Trade-in value uncertain

    Renault Megane diesel (clean vehicle)

    190 500 SEK 35 000 kr (7 kr/mil)

    Service cheap, free from vehi-cle tax for five years, good Trade-in value.

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    is still difficult to show any considerable saving, see example to the left (based on a period of five years and 10.000 km per year).

    In the example above, the batteries are let separately from the car, in order to reduce the perception of high new-car prices, and play down the issue of battery life and the cost of replacing them. It is understood, however, that the electric car has a significant additional cost that other cars do not have. Price comparisons with the conventional car are not completely fair because it is slightly smaller. On the other hand, it has better performance and greater luggage space.

    In the example, the electric car in conjunction with a green car classified car, makes sense because those who are thinking about electric cars are not likely to be considering purchasing a fuel-guzzling petrol car. Thus, the advantage of electric cars in the form of cheaper fuel remains rather small. The profit of course increases the more you drive, but electric cars have a limited range per charge. Combine that with the fact that in the coming years there will be few fast charge outlets, and it becomes un-reasonable to expect much more than 10 000 – 15 000 km per year for an electric vehicle (there is also a limit on the rent for the car battery in this example).

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    Green car definition means that both cars are exempt from vehicle tax for five years. It is often cited that the electric car will have lower oper-ating costs, because the electric motor has fewer moving parts, but at least initially, the service costs are expected to be higher for the electric car. Long term, however, the electric car will have lower maintenance costs and longer service intervals, because it has fewer moving parts and hence less wear.

    Even if one believes that the resale value of the electric car is high - and it can be guaranteed by the producer - it is still difficult to financially re-coup the initial cost of the electric car, compared with the green car with renewable fuel. Therefore, the announced super car incentive, which is indicated to be introduced in 2012 will have an important role to play. For anyone who wants to sell electric cars sooner than that, it is important to have a good knowledge of what benefits there are for the prospective purchaser to take advantage of.

    Financial incentivesThere are a number of initiatives designed to encourage the introduction of the electric car, both national and local. The most important is, Vatten-fall’s and Stockholm’s joint national procurement of electric car and plug-in hybrids, with a test fleet, established in late autumn 2010 and early spring 2011. Here, companies and organizations - but not individuals – can receive 25 percent of the additional cost when purchasing an electric car, in return for participating in assessments, fact finding and informa-tion dissemination. The additional cost per car was in the first round of 27 electric vehicles an average of 196 500 SEK including VAT. A further call was carried out until 1 December 2010, for cars ordered in the period 12 April to 1 December 2010, delivered before the end of March 2011. Both parts of the contract provided a total of 50-100 including electric cars.

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    In a second step, Vattenfall and Stockholm City alongside SKL Kommentus coordinated a procurement of electric cars and plug-in hybrids, with an aim to gather at least 6000 vehicles. The first 1000 delivered electric vehicles may have an incentive to cover the additional cost with up to 50 000 SEK.

    There is also local and regional electric vehicle support, such as Öster-sund Municipality and Jämtkraft’s “Green Highway - electric vehicles in winter climates,” in which businesses, organizations and individuals can receive a grant of 50 000 SEK when they buy or lease an electric car.

    Furher local and regional initiatives will be added at a rapid pace- not least in 2011-2012, as many politicians before the election promised to switch to electric cars locally. Stay updated what is going on locally or contact Electric Cars in Sweden, Miljöfordon Syd or Green Motorists.

    informationLevels of knowledge about electric vehicles remain low and this is a unique opportunity for the car dealerships to work together with municipalities, energy companies and the environmental movement. It gives greater credibility to the municipality or energy-company who may account for part of the bill. It is not likely for you to achieve this at the launch of the next fuel guzzling SUV!

    Electric vehicle demonstrations are still so new that they generate posi-tive press articles (except in the very largest cities), and - perhaps there is a connection here - local politicians and local celebrities participate gladly in a test drive of electric cars. To date, the availability of electric cars is so small that hardly any municipality has been seen to be favour-ing a particular brand; see, for example, the wide publicity the national Electric Vehicle Record received in 2011.

    ›› Levels of knowledge about electric vehicles remain low and this is a unique opportunity for the car dealerships to work together with municipalities ››

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    Brands of electric cars on the program - now or just around the corner - have also, in many cases chosen to very publicly sign memoranda of understanding with municipalities and energy companies. In most cases these are not particularly binding on either party, but is mostly about getting the message out that you want to stimulate the development of a local electric car market - a fairly general approach would receive lit-tle attention for other types of cars, and municipalities would not sign up with car companies if it were not for the technology being so new. In some cases the agreements, however are far-reaching, as when Peugeot decided to test 40 of their new electric cars in the Östersund winter cli-mate. It is of course very good for Bilbörsen, the local Peugeot dealer, more so than Bilinvest selling Peugeot in Umeå. Engaged car dealers and for runners try to steer up such arrangements, a more passive read in the newspaper that the operation ended up somewhere else.

    Charging stations/standsOn www.uppladdning.nu, a map of Charging stands for electric cars is available. The map is misleading, because the electric cars advantage is of course, that it can be charged in every single power outlet - there are about 3,500 places to fill up their petrol cars, 1,700 to fill up with ethanol, 130 to fill up with gas and millions to “fill up” the electric car.

    For car dealerships this is a difficult balancing act. On the one hand, it is important to emphasize that the electric car can be “refueled” wherever there is a charging contact. On the other hand, many people have “range anxiety,” they worry that the range will be too short and need to be re-as-sured by seeing the charging stations at shopping malls, the large parking lots and similar. Moreover, it is popular to set up charging stations; it costs no more than ten thousands SEK and can give back much more than that in media space and goodwill. This should of course be a process the car

    http://www.uppladdning.nu

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    dealerships use – first themselves through implementing and publicising one or two charging points, and then encouraging the municipality and other actors to do the same, outside shopping malls etc.

    Customer groupsSo far, those who have bought electric cars have been a narrow, well-defined group of customers who basically decided to run an electric car, despite the cost. High additional costs, inadequate security and poor range have not been an obstacle. This client group is very narrow, includ-ing energy companies and wealthy environmentalists. Electric car sales have not even reached one hundred cars a year.For the next step, and for the electric car market to be of interest to the normal car dealers, the customer group needs to be widened substan-tially, which should become possible with the new generation of electric cars that are about to become available, where you do not have to com-promise with the security, where the pricing is more reasonable and the range is perceived as adequate for everyday use. Among the potential customers that car sales should turn to early are:

    • Municipalities. Municipalities dominate the electric car purchases to date. They see the symbolic value of having a number of electric cars

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    in operation, and are relatively price insensitive if they have decided to buy electric cars.

    • Energy companies. Both the major electricity companies of the small-er municipalities have been out of the starting blocks early in the tran-sition to electric cars. They see of course a new market for electricity which they want to realise.

    • Inner City dwellers in the upper middle class. The inner urbanite has often relatively short journeys, which fits well for the electric car. More affluent households have more than one car, and can complement the electric car with a car for long trips. In larger cities it is also easier to imagine supplementing the electric car through occasionally renting a car, or joining a carpool.

    • Housing in rural areas. No electric car marketing has hitherto mar-keted electric cars in rural areas, but here is an interesting group of customers because whilst it could be long distances to the closest fuel station they have power outlets on the corner of the house.

    • Taxis. With taxis long distances may seem impossible to reconcile with electric cars’ short range, but Taxi 020 was early in the electric car mar-ket and they state that if there are fast charging stations it will clearly be possible for them to replace a large portion of their vehicles to electric cars.

    sell, lease or a combination? The electric car is a new phenomenon and the automotive industry has not quite decided how the offer to the customer should look. Three main lines can be distinguished:• lease the car. Citroën and Peugeot seem to want to stick to primarily

    leasing cars with a guaranteed trade-in value, which gives a fixed and affordable monthly rate and security for the customer who does not need to worry about battery life or its trade-in value.

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    • sell the car, lease the batteries. Renault has at least initially opted for this approach, which makes the car’s purchase price comparable to petrol or diesel cars, while the cost of batteries can be compared with the monthly cost of fuel. Thus, the customer no longer needs to worry about battery life, while car dealers can continue with a focus on selling cars.

    • Sell the car, including batteries. Nissan, Tesla, Think, and many oth-ers have chosen this path - which is the same way that car dealers in general are operating. The car dealer business will not assume respon-sibility for such maintenance of the batteries. In order to reduce cus-tomer concerns included batteries and power trains are often covered by a long warranty, which in some cases can be extended at additional cost.

    Depending on which direction has been chosen, the strategy for market-ing will be different. Sell the car with battery - the similarities of buying any other kind of car will be stressed. Sell the car with batteries excluded - stress that the only thing that really can feel new and untested for many (electric motors we already are familiarly with all day long) is taken care of for the customer. If the car is leased with a guaranteed trade-in value, it underlines how much safer it is for the customer, compared to other brands where those who want an electric car have to take a major responsibility for both batteries and trade-in value.

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    Light duty vehicles

    many dealers also sell light duty vehicles, although it is usually divid-ed physically in the showroom, and with different sales men for each. In the light duty vehicle side, the environmental evolution is less advanced, but next year, a rapid shift is likely to occur. It depends on several factors:

    • EU’s future emissions standards for light duty vehicles, vans and pick-ups

    • Rising fuel prices that are steering the transport industry towards more economical vehicles

    • More stringent environmental requirements from purchasers

    The EU is expected to decide that light duty vehicles, per brand on aver-age, shall emit a maximum of 175 grams CO2 per kilometer by 2014-16, complemented by a long-term target of 95 grams per kilometer in 2020. The actual average was just over 200 grams in 2007. The EU’s proposal offers a “super credit” for light commercial vehicles with emissions below 50 g CO2/km: they will be count as 2.5 light-duty vehicles in 2014, 1.5 light-duty vehicles in 2015 and a light commercial vehicle from 2016. This gives new incentives to the motor trade to sell light commercial vehicles with low emissions, and will particularly enhance the market for light duty vehicles with electric or plug-in hybrid technology.

    Gothenburg City requests that light commercial vehicles that they pur-chase and lease must meet the national clean vehicle definition, although it is not formally implemented for light commercial vehicles at the nation-al level. For the largest light duty, however, emissions of 225 g CO2 / km are allowed, with a recommendation not to select vehicles that emit over 180 g CO2/km. This is just one of many examples of municipalities and other buyers who no longer accept that light duty vehicles are allowed to have much higher emissions than other cars.

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    Diskteknik (a Swedish company) has for a long time consistently used its high proportion of clean vehicles in their marketing. The environmental initiative is the main reason why their CEO had been invited to speak on numerous conferences and the reason that they are far better known than their competitors. DHL has used the purchase of gas-powered vans from Mercedes as part of their marketing, as well as competitor Bring with their gas-powered Iveco. Many smaller companies with a clear en-vironmental profile, eg those who deliver vegetable boxes directly to customers houses, have seen it as a natural step to choose gas-powered vans.

    The car dealers have, over the last ten years, sold continuously more powerful motor vehicles, which have eaten into the technical emissions reductions that would otherwise have occurred. In recent years there has been a series of smaller diesel-powered light duty vehicles, whose fuel consumption is so low that they meet the clean vehicle requirements for passenger cars. It has also seen a series of gas-powered vehicles, mainly vans, and some electric cars from niche manufacturers being classified as light duty vehicles.

    The car dealers have not progressed as far in the environmental market-ing of light duty vehicles as for passenger cars, largely because there have not been the same clear incentives such as green-car bonus, and now vehicle tax exemption. But when the transport vehicle’s annual mile-age is several times longer than passenger cars, the argument about low fuel costs is much more relevant and should be used more by those who sell vehicles with emissions down to the 120 gram CO2/km level, which is the border for clean passenger cars. Those who sell gas powered vehicles have as yet few competitors and are thus more likely to win the deal if the customer can be convinced that it is a gas vehicle they want.

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    Conversion of existing cars into renewable fuelsfrom 1 July 2008, it is permissible to convert existing petrol cars to ethanol. For cars that are so new that they are the subject of meaningful emissions regulations, the requirements for conversion are such that it can only be done by approved converting companies - not by individual garage enthusiasts. So far, the market has not taken off, partly because the regulations are so strict that the investment is too high, both to indi-viduals who want to convert and for the workshop which will offer conver-sion. This provides an opportunity for car sales, which can create enough volume to do the conversion profitably.Conversion of existing cars into renewable fuels is of interest to car deal-ers from three perspectives:

    • Expanded model range. Brands which today do not have ethanol cars at all, or want ethanol cars in more ranges, can offer ethanol cars due to the legislative amendment. They are formally converted cars but in practice new cars with zero kilometers on the meter.

    • possible additional income. The market for conversion of existing cars is in its infancy and more of the converters are looking for vendors or local representatives. A link to the car dealers with the major brands and with their own shop can offer conversion in collaboration with one of the major conversion firms.

    • Upgrading of used cars. Many car dealers have a large amount of 3-4 years old used cars, which can be hard to sell, for example company cars, such as the Saab 9-5 or Volvo V70. By converting them to ethanol, they become more appealing in the secondary market and will be sold more quickly - in addition to the obvious environmental benefits

    Currently there are only a few such firms in Sweden; BSR in Växjö and

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    Nordic Performance in Norrköping offer ethanol conversion. AFV in Goth-enburg convert Volvo V70s to run on gas and Konvegas in Växjö convert Ford, Volvo, Peugeot and Citroën-cars to be run on gas. Since the con-verting company takes over the responsibility for warranty and other engine parts directly involved in the conversion process, they have now chosen to only offer conversion kits for some common models, including Saab, Volkswagen and Volvo. The transfer of warranty responsibility to the conversion firms means that the car dealers can convert their cars in the show-room without any risk.

    ›› The transfer of warranty responsibility to the conversion firms means that the car dealers can convert their cars in the show-room with out any risk ››

    Konvegas converting for example Ford-cars into Trippelfuel, which can be run on petrol, ethanol and biogas.

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    Affect the general agent

    The dedicaTed dealer reads many different automotive magazines. Here they may see models from dealer’s “own” brand, but that does not exist in Sweden. Maybe there are even some brands that are not sold in Sweden at all, but that could fill a demand in the market - such as an electric car from China, which is already sold in Germany.

    For car dealers who want models that are not sold in Sweden, it is time to move up a gear in lobbying your agent. Your car dealership of course meets the general agent or the importer on a regular basis, but how often is it on your initiative, or with concrete proposals from your side?

    If you want to sell clean cars that are in the car manufacturer’s program, but not sold in Sweden, you should talk to your general agent. Sometimes there are good reasons why the cars are not sold here, such as the Toyota Corolla in the ethanol version is not suitable for the Nordic climate, while the other cars should actually have a clear market here. This includes the Peugeot and Citroën gas cars, which are sold by the independent importer Miljöbil Center, but not by the general agent. In this case you should contact the general agent, if possible, with clearly demonstrable additional sales as an argument.

    In addition to the regular models, it is also good to be able to produce special models with a clear environmental profile. BMW was named the “Lobbyist of the year” when in 2007 they demonstrated their hydrogen-powered 7-series at the annual political week in Almedalen. The car is not available commercially, but to show up and get famous people to test drive it was an important part of brand marketing. The same thing is happening now with a number of electric cars that are on tour in Swe-den a year or more before they are on general sale. It has not only given extensive positive publicity, but also was important in establishing early

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    pre-orders for the cars from, inter alia, municipalities. In addition, the demonstration of electric cars has been important for municipalities to invest early in charging stations and other measures that makes the rest of the market ready when electric cars become available commercially. It is therefore important that you as a car dealership are participating in such exhibitions and activities.

    Electric car shows are a double-edged sword; on one hand a short-term risk for the regular sale of cars – some customers maybe waiting for the electric cars. It is therefore important to highlight electric cars as a part of the car company’s overall environmental initiative, next to the other green cars which can already be purchased. “Dream of the electric car tomorrow, buy a green car today” should be the aim.

    Maybe there are vehicles that you determine that the general agent should not sell? Swedish Toyota has decided to no longer take in some particu-larly fuel-guzzling vehicles, where the manufacturer has environmentally friendly alternatives, and others should follow the same example. Are there cars that risk damaging the green image of the brand? If so suggest that you no longer import them. You can of course also take such a deci-sion locally - no one can force the local car dealership to sell all available models, and the car dealers choose which ones should be highlighted and which should not.

    The head office should of course also be an environmental front-runner from other perspectives, not least because this is where your brand is judged by most motor journalists and other key lobbying groups. Toyota Sweden AB is certified according to ISO 14 001. If they can achieve this, then your general agent can also do so. If they have not started the en-vironmental work already, propose that they do so.

    ›› If you want to sell green cars that are in the car manufacture