Norway seeks 'Tesla tax' on electric cars

Abolishing Norway's tax exemptions for electric cars would slap thousands on the purchase price of a Tesla
Abolishing Norway's tax exemptions for electric cars would slap thousands on the purchase price of a Tesla

Norway, a world leader of zero-emission vehicles, on Thursday proposed a "Tesla tax" aimed at cutting a tax advantage granted to large electric cars in a heavily criticised move.

Electric cars, which have hitherto been exempted from heavy taxes imposed on other vehicles, accounted for 20 percent of new registrations in the Nordic country since the beginning of this year, an unprecedented market share in the world.

In a 2018 finance bill presented to the parliament on Thursday, the right-wing minority government suggested removing a one-off tax exemption for new electric cars weighing more than two tonnes.

The proposal was immediately dubbed the "Tesla tax" because it primarily affects the high-end models made by the American manufacturer. Buying a new Tesla X would cost about 70,000 kroner (7,500 euros, $8,800) more.

Justifying the proposed tax measures, Finance Minister Siv Jensen argued that these heavy sedans exhaust the roads as much as gasoline and diesel cars, and that the owners should therefore contribute.

The proposal has sparked a heated debate.

"It's a tax bomb," Norwegian Electric Vehicle Association Secretary General Christina Bu told AFP.

"This was unexpected by both the drivers and by the car industry and it sends a bad signal to the Norwegians and the world" for which the nation is often a model in this matter, Bu added.

She underlined that Norway has set an ambitious target of ending the sales of new cars with combustion engines as early as 2025.

The largest oil producer in western Europe, Norway has introduced many incentives to purchase electric cars.

In addition to generous tax exemptions, which critics say allow the richest to buy Tesla vehicles at a good price, Norway's electric car drivers benefit from free city tolls, free parking and the possibility of travelling in the bus corridors.

The government needs the support of other parties in the parliament to get its budget approved.

Its traditional centre-right allies have already spoken out against the "Tesla tax", noting a 2015 agreement has granted tax advantages for until 2020.

Explore further

Norway says half of new cars now electric or hybrid

© 2017 AFP

Citation: Norway seeks 'Tesla tax' on electric cars (2017, October 12) retrieved 19 August 2019 from
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.

Feedback to editors

User comments

Oct 12, 2017
Norway has a lot of toll roads, because they've built their public highways on a scheme where the road users are subject to fees until the road is paid off. The already rich Tesla drivers save hundreds of dollars a week on these roads.

The island of Finnoy, near Stavanger, has the highest concentration of EVs in the country because of the NKr150 ($17.75) one-way toll charge in the tunnel connecting it to the mainland. If you are commuting to work through the tunnel, this means a weekly savings of NKr1500 ($177.50).

You'd save almost $10k a year. It's a pretty good reason to buy an electric car no matter how much it costs, because in ten years you may be paying enough road tolls to buy a Tesla anyways.

Oct 12, 2017
The impact of the free tolls is significant. According to Mr. Halse, Oslo loses about NKr300 million to NKr350 million ($35.5-41.4 million) a year from the free tolls for EVs. Additionally, about NKr800 million ($94.7 million) of toll revenues goes to subsidizing public transportation per year. He questions whether it makes sense for the local government to spend half as much on EVs that represent 5% of daily commuting trips into Oslo as it does for public transport that accounts for almost 50% of commuter trips.

Oct 12, 2017
Being the cynic I am. And though as much as I despise the alt-right. I like to kid myself I would be as suspicious of a leftist call for more taxes on EVs.

However, has any investigative reporter nosed into the influence of the petrol industry political contributions to buy this legislation?

Even though I do sort of agree, this legislation seems to be a necessity. To balance the public need against selfish interests.

Oct 13, 2017
this legislation seems to be a necessity. To balance the public need against selfish interests.

The legislation is specific to Teslas, not other EVs due to the weight limit. It applies to approximately 10% of the electric vehicles on the road, and won't do away with the main problem.

A more fair solution would be to drop taxes on all the other cars to match the EVs, so people could afford better, safer ones that use less fuel etc. etc. but that's not going to happen because automobile taxes are such a huge source of money for the government.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more