At least four people were killed and 13 injured when the vehicle drove into the crowd gathered in the town of Apeldoorn, southeast of the capital Amsterdam.
An Associated Press photographer at the scene of the crash said the car appeared to be driving at a deliberately high speed.
Witnesses said the black Suzuki Swift crashed through crowd control barriers, hitting people and dragging several along the road with it.
It missed an open-top bus carrying Queen Beatrix and the royal family by four or five meters, before finally crashing into a stone monument.
The car killed four spectators and injured 13 moreMotives unclear
The driver of the car, a 38-year old Dutchman, survived the crash but sustained serious injuries.
Fire-fighters removed him from the wreckage of the car. Police then took him to hospital for medical treatment and questioning
Public prosecutor Ludo Goossens told journalists in Apeldoorn that the suspect's condition was life-threatening, and that he would be charged with murder and attempting to harm the royal family if he survives.
Police say the man confessed to attempting to ram the open-top bus carrying the 71-year-old queen as well as Crown Prince Willem- Alexander and his wife Maxima.
"There are no indications of terrorist links," Goossens said, nor were there any signs of explosives or a broader conspiracy.
Investigators searched the man's house to try and establish a motive. They said he had no record of mental illness or previous crimes.
Queen Beatrix's official birthday is a public holiday in the NetherlandsQueen cancels march-past
Queen Beatrix expressed her "deepest sympathy" for the dead and injured. She cancelled a ceremonial march-past scheduled in memory of her mother, Queen Juliana, who died five years ago.
Prime Minister Jan-Peter Balkenende said it was "a sad day for the Netherlands."
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