Norway is proposing a “Tesla tax,” which would hit owners of EVs in a move that critics say will threaten the standing of the Scandinavian country as a pioneer of zero-emission cars. Last month, sales of EVs and hybrids accounted for 60% of new car sales in Norway that was fueled by extensive subsidies in tolls, parking fees, and taxes.
Norway successful in introducing EVs
Now, the centre-right minority government in Oslo is proposing a one-off tax on all EVs that is more than two tonnes. This would target all Tesla vehicles and increase the cost of buying a Tesla by over $10,500 (NKr82,800). In an interview to news site The Financial Times, Christina Bu, general secretary of the Norwegian Electric Vehicle Association, said “This is a tax bomb. This is gambling with the whole electric vehicle market. It is a bad signal to send and will affect consumers.”
The Scandinavian country has been quite successful in introducing EVs and by 2025, it is aiming to sell only zero-emission new vehicles. However, according to the Financial Times, the critics argue that their popularity is mostly down to an extremely generous set “of subsidies that can cut the price of the most expensive Teslas by about NKr450,000.”
A huge political debate has started about when and how to withdraw those subsidies. Some Norwegian politicians say several early adopters of the electric vehicles were rich households purchasing Tesla vehicles. Bus lanes are clogged with EVs, complain bus drivers in the richest parts of Oslo.
EVs see success but market still fragile: Ms. Bu
Andreas Halse, environmental spokesman in Oslo for the opposition Labour party, said on Thursday – before the tax proposal – that although EVs generated no emissions, they contributed significantly to damaging roads and congestion in the capital because of their weight. He said that it is not just about emissions but “there are other considerations, too, such as the use of cars versus public transport.”
The new tax proposals would add as much as NKr82,800 and at least NKr36,000 to the cost of the Tesla Model X because of its ability to tow trailers. This feature is liked by people who have mountain cabins. The market was still quite fragile even when the electric vehicles are seeing success in the market, said Ms Bu. Bu pointed to a decline in sales in neighboring countries like Denmark, where few tax advantages were withdrawn.
She said, “It’s too early. Nobody is saying we are never going to tax electric vehicles. But the government had promised to keep the regime the same until 2020.”