Norway’s “Tesla Tax” Signals EV Incentive Decline


Norway is currently the world leader in terms of environmentally sound technologies. The country is also a world leader when it comes to the zero-emissions EV market, regardless of the fact that much of its revenue comes from oil extraction.

This may lead to steep cutbacks to some of the tax breaks that Tesla owners(as well as those who have purchased other EVs) have come to enjoy.

Norway’s government has released the proposed budget for 2018, and it seems that while the changes concern mainly those who own electric cars that weigh more than two tons. A good example of such EVs would be the Tesla Model S sedan, as well as the Model X SUV.

The appropriately nicknamed “Tesla Tax” would increase the price of a Model X by over $8500. The Local reported that “Non-chargeable hybrid cars will lose their weight subsidies, becoming subjected to charges based on emissions and weight — making their taxation equivalent to traditionally-fueled vehicles, writes NRK.”

Norway has set a goal to hit the zero-emission mark by 2025 and has offered generous subsidies in taxes, tolls, and parking fees for EV and hybrid owners. This has led to electrified cars comprising approx. 60% of car sales last month.

This having been said, those who support the proposed tax argue that the popularity of electric vehicles has led to traffic congestion in the capital, and also that these cars contribute to road wear and tear as much as traditional ones.

The tax break regarding electric vehicles in Norway currently exempt owners from the 25% VAT and purchase taxes, and were planned to remain unchanged for at least a couple more years.

Some are concerned by the fact that the new proposal may have the same effect as in Denmark, where the sales of electric vehicles fell by 60% after the government eliminated the tax incentives.

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