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Sweden is a global leader in renewable energy and alternative fuels use. The Swedish government has pledged to cut CO2 emissions caused by domestic road transportation with 70%, relative to 2010 levels, by 2030, which is a mid-goal of totally cutting greenhouse gas emissions by the year 2045 . In order to influence private individuals and companies to choose buying the environmentally friendly vehicles, the government has been providing exemption from vehicle tax (“supermiljöbilspremie”) to those who bought electric vehicles from 2013 to June 30, 2018. From July 1, 2018 this was replaced with a bonus-malus system regarding new registrations of passenger cars, light trucks and light busses. As the former premium covered subsidies for passenger cars with no greater than 50grams of CO2 /km the new model gives a bonus for new registration of vehicles with CO2 /km up to 60grams. However, a malus i.e. an increased vehicle tax was also implemented and affects new registrations of petrol and diesel cars. In summary, the new bonus-malus model replaced the tax exemptions with a bonus when buying new environmental cars. This bonus is at the highest 25% of the retail price . The malus is and additional tax on petrol & diesel vehicles the first three years of when the vehicle is in traffic and starts being obligated with tax. Specifically, new diesel vehicles will be affected with a fuel surcharge, measured by its grams of CO2 /km multiplied with the value 13,52.
New registers of environmentally friendly cars have more than doubled the last five years from approximately 29,600 in 2013 to 67,850 in 2017, resulting in a market share of 17.28%. Meanwhile, the share of newly registered gasoline cars has dropped by 30 percentage points over the last ten years, from roughly 70 percent in 2006 to roughly 40 percent in 2016 & 2017. Gasoline cars still have the largest market share with 46,9% and dominates together with diesel cars that have a 38,1% (of the new registered cars measured Jan-Nov 2018) . Although electric cars are rising, the absolute numbers are still quite low, with only 4359 electric cars and 34,627 electric/plug-in hybrids registered in 2017. Nevertheless, sales of electric and electric hybrid/plug in vehicles have increased steadily from under 1% in 2006 to 10% in 2017. This trend is thus likely to continue for the foreseeable future; Sweden’s government agency for transport analysis, estimates that the share of newly registered electric/hybrid vehicles will continue to grow up to approximately 30 percent by 2020 . Therefore, good prospects exist for products in this segment.
Another trend is autonomous vehicles, where Sweden is at the forefront of driverless technology. The Swedish government established initiative Drive Sweden in 2015, which is a new approach to mobility between companies, government agencies, and universities working with a strategic innovation program of self-driving vehicles and shared vehicles .There are plans to launch self-driving cars by Volvo to the market in Sweden by 2021 .
A trend seen on all the private registered cars is the amount of private leasing that has been seen rising again. The strong demand for cars are met as most car models are available for leasing and all car brands nowadays have good routines for private leasing and the marketing of it. Private leasing is estimated to keep a high market share and rising to 30% by the end of 2018. In Jan-June of 2018 the share of private leased cars (of all private registered cars) was already 29%. Corresponding percentage was 26% in 2017 and 24% in 2016. The high share of private leasing is due to the fact that consumers increasingly prefer a monthly payment while they value the easiness of not having to sell their car after a few years. Many customers value the security of the car costs as the residual value is guaranteed by someone else, and at the same time having access to a safe, modern and more environmentally friendly car.
Market Trends & Demand
market trends