No, Tesla isn’t coming to Westeros, oh, Game of Thrones fans. Instead, a real-life land with a history of violent tales of blood feuds, traditions, family, and character is the newest site for Tesla onsite purchases. Iceland, a land of fire and ice with a primary focus on information technology and environmentally friendly energy industries, is now is open for Tesla vehicle orders.
Tesla’s first branch in Iceland opened September 9, 2019, in Reykjavik. Tesla Model S, Model X, and Model 3 orders can now be purchased via the site.
Iceland is a small country by measures like population and population density. But such indicators do not always tell the entire story. Policymakers, researchers, and everyone interested in the future of clean transportation — all are keeping their eyes on Iceland’s vehicle market, because the small island nation is in a leading position on electric mobility.
Iceland’s Leap into the EV Market
Iceland quietly became one of the leading EV markets worldwide in the past 5 years, but the foundation for low-carbon transportation was paved there decades ago. Renewable power, low electricity prices paired with high fossil fuel prices, and a high urbanization rate have made Iceland an ideal market for EVs. In Europe, only Norway has the same ability to provide electric vehicles with 100% renewable electricity.
Low-carbon electricity is available to Iceland’s consumers at comparatively low cost — 20% lower than the average electricity price in the EU — while prices of conventional automotive fuels in Iceland are among the highest worldwide. Consumers in Iceland can significantly reduce fuel costs by switching from conventional vehicles to EVs. In fact, Iceland exempts vehicles emitting up to 80 g CO2/km from import excise duties, which can reach 65% of the vehicle’s customs value if emissions exceed 250 g CO2/km.
Consumers in the northern island country can significantly reduce fuel costs by switching from conventional vehicles to EVs. Right now, EVs comprise 15% of Iceland’s total population of motor vehicles. With Tesla’s entry into the Icelandic auto marketplace, that percentage is certain to climb exponentially.
Iceland & Renewable Energy: A Good Match for Tesla
Iceland’s development from one of the poorest nations in Europe at the beginning of the 20th century to enjoying one of the highest standards of living in the world is intrinsically linked to the development of sustainable energy. Iceland is a highly volcanic island with 26 high temperature geothermal fields and over 250 low temperature areas. In total, over 600 natural hot springs have been found in Iceland.
Today, Iceland is the only country in Europe that derives nearly all of its energy from renewable sources. On a per capita basis, Iceland is ahead of any other nation in geothermal generating capacity and is a world leader in sustainable energy development.
87% of Iceland’s electricity comes from hydropower and the remaining 13% is derived from geothermal power. Almost 100% of Iceland’s space heating and water heating is obtained from geothermal sources. Iceland only uses a fraction of its economically and environmentally viable potential for electrical production from renewable resources. Oil-powered fossil fuel power stations are only used as backups to the renewable sources.
That makes Iceland and Tesla a good match, as many current and potential Icelandic Tesla aficionados attest.
Aurora Borealis ✅
Blue Lagoon ✅
Sustainable energy ✅
Reykjavík service center ✅
Tesla vehicle orders open for Iceland NOW 🙌
— Tesla (@Tesla) September 9, 2019
The Way We Were: Tesla & Iceland
The first Tesla Model S arrived in Reykjavik in late 2013 and was delivered to Gisli Gislason of Northern Lights Energy — an entrepreneur whose personal quest has been to install charging stations around Iceland, open an EV dealership network, and more. To inspire curiosity about EVs, Gislason gave 60 test rides before the year was out. The result? Icelanders started buying Teslas sight unseen.
Icelanders had inquired frequently about whether the day that Tesla would open a sales venue would ever come.
“The supply of electric cars is not satisfying demand at the moment,” Johann Olafsson, who heads Iceland’s Electric Vehicle Association, told Fortune in a 2018 interview which took place in Reykjavik. If it did catch up with demand, he forecast, Tesla sales would probably “more than double each year for the next few years,” he declared.
Johann Olafsson, from Iceland’s #ElectricVehicle Association, says he's “thrilled” to receive @elonmusk's positive response to his request via Twitter for @Tesla service center to open in #Iceland. “I hope it will happen before the release of the Model 3” https://t.co/WlO3uj81gz
— Anthropology of Iceland (@Mannfraedi) May 9, 2018
Icelanders tweeted Elon Musk over the next 2 years, asking, in what the Reykjavík Grapevine calls “direct Icelandic fashion,” what the problem was with setting up a Service Center. Already, there were more electric vehicles sold in Iceland than in Denmark and Finland during the previous year, where Tesla had already set up operations. Icelandic buyers interested in electric vehicles (EVs) had to face waiting times of up to 9 months.
Tesla vehicles at that time were imported by citizens in Iceland. This is, of course, the case in markets where Tesla does not sell vehicles directly. The only recourse for individuals in non-Tesla supported countries is to buy and import the car from another country. In addition, while Tesla began to send mobile technicians to Iceland on occasion, this was far from the ideal solution.
Fast forward 18 months and the local Icelanders are quite excited.
For a country that starts with "Ice" we had a very warm welcome. Geothermal-powered cars! #Tesla #Iceland pic.twitter.com/PIiy5zA71s
— Jorge Milburn (@jorgemilburn) September 9, 2019
Tesla’s arrival in Iceland will undoubtedly help accelerate the adoption of high-potential electric vehicles in Iceland. Tesla’s next likely steps in Iceland seem to be to open a service center in Reykjavík along with a few Supercharger stations that will enable Tesla owners to travel around their small island, savoring the quiet high-tech Tesla ride that Icelanders savor.
Looking to Charging for Teslas & All EVs on Iceland
The fast rollout of public charging infrastructure, including fast charging stations, is a top priority for the Icelandic government, according to the International Council of Clean Transportation. National grants amounting to about 200 million Icelandic krónur (about €1.63 million or $1.61 million) over a three-year period (2016–2018) could more than triple the number of fast-charging stations on the island.
Iceland’s size is ideal for electric vehicles: 500 km from west to east, and about 350 km from north to south. This means that most trips are well within EV range: Icelandic car owners, on average, drive approximately 38 km per day.
Electric vehicles are for the most part exempt from VAT in Iceland (an exemption that will end when more than 10,000 EVs are sold) and are free of import duty. The government, headed by environmentalist Prime Minister Katrin Jakobsdottir of the Left-Green Movement, says improving the network of charging stations plays a key role in supporting the transition away from dirty fossil fuels.
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