Norway Prepares Tax on Electric Cars

Norway has confirmed its position as the world leader in electric car sales in 2022, and the government is now preparing to tax them, shifting focus to the electrification of heavy trucks.

Battery electric vehicles accounted for 79.3 percent of new car sales last year, the highest since they were introduced, announced the Norwegian Road Federation (OFV) on Monday.

In 2021, their share was 65 percent, and ten years ago it was only 2.9 percent.

Norwegians purchased the most Tesla Model Y last year, followed by Volkswagen ID.4 in second place, and Škoda Enyaq in third. Tesla thus maintained its leading market position, with a share of 12.2 percent, ahead of VW, which captured 11.6 percent, according to registration data.

China is by far the largest car market, but Norway leads the world in market share of electric cars, supported by generous government subsidies.

To encourage citizens to buy, the government has abolished purchase taxes, which are paid by buyers of gasoline cars. Thus, the electric Porsche Turbo S cost a minimum of 1.7 million Norwegian kroner. If taxed as its gasoline counterpart, it would cost 2.1 million kroner.

The burden on the budget has compelled it to examine its tax policy in the meantime.

Subsidies in 2022 cost the state treasury 39.4 billion kroner (3.75 billion euros), the Ministry of Finance announced, and the government is now planning changes to the subsidy system.

They announced a new tax that will be based on vehicle weight and has already drawn criticism from the car owners’ association, with warnings that the motor of an electric vehicle is heavier than that of a fossil fuel-powered one.

– We fear a drop in sales as the government has proposed a new tax based on weight – explained Thor Egil Braadland, spokesperson for the Norwegian Automobile Federation (NAF).

At the same time, the government has not offered a complete solution to key practical problems faced by electric car owners, who still struggle with charging stations and paying for their use, Braadland added.

– To be well-prepared for an electric car, an owner in Norway must have 10 to 15 applications. We know that many citizens are therefore postponing the purchase of an electric vehicle – he explained.

NAF advocates for ‘e-roaming’ that would spare drivers this obligation.

The government, on the other hand, defends its policy and claims that taxes will not deter citizens.

– An electric car is the new normal for Norwegians, and that means we must reconsider the use of the money that society has at its disposal – stated Johan Vasara, State Secretary in the Ministry of Transport.

– We are completely confident that nothing can jeopardize the future of electric cars (in Norway) – emphasized Vasara, adding that the government must now focus on other transport segments, such as heavy trucks.