Just a day after Norway’s 50,000th electric vehicle (EV) hit the streets, Norwegian officials won assurance that their economic incentives that make the cars so popular also comply with European competition rules. The incentives, valid until 2017 or until sales hit 50,000 vehicles, had been under review because of competition concerns.
The decision from the European Free Trade Association’s Surveillance Authority (ESA) gave EV sellers and owners another reason to celebrate. Now there are no legal reasons for Norwegian authorities to withdraw the EV incentives, leaving EVs only vulnerable to ever-shifting political winds.
Debate has been rising in recent months over whether EVs should, as they are now, be exempted from Norway’s high vehicle and value added taxes, road tolls and fees for ferry rides. Electric vehicles are also exempted from parking fees, are subject to much lower annual registration fees than conventional vehicles, can use the special lanes otherwise set aside for taxis and buses and can be recharged for free in Norway.
All of this has contributed to the rapid growth in EV sales, and Norwegian Broadcasting (NRK) reported on Tuesday that it’s also now confirmed to be fine with the ESA. It gave the green light to all the state’s incentive measures. The new exemption from value added tax when leasing an EV is, however, only valid through 2017, when authorities must apply to get it extended.
“The incentives have been a great success and yield major environmental gains in the form of better air quality and lower carbon emissions,” ESA President Oda Helen Sletnes told NRK.
At the Norwegian EV Association (Norsk Elbilforening), Monday’s celebration marking delivery of the 50,000th electric vehicle (another Tesla) could continue. “We’ve been waiting a long time for this and are very glad they (ESA) concluded as they did,” Christina Bu, secretary general of the association, told NRK.
She was out eating cake in an electric car parking lot at Marienlyst in Oslo, but wasn’t surprised. The so-called el-bil incentives granted by the government several years ago have helped make Norway among the leading EV nations in the world, with nearly a quarter of all car sales so far this year now EVs. “Our role as a beacon in the international EV market is maybe the most important climate measure Norway is making in the longer term,” Bu said on Monday.
Braced for battle
Challenges still lie ahead, though, after the 50,000 mark was passed. Public transportation agencies complain that electric cars are clogging their special lanes and delaying bus routes. Others question why people able to afford a Tesla (which sells for around NOK 767,000, or USD 95,000) should receive so many tax advantages.
There was hardly any public controversy in Norway over electric cars until the trendy and relatively expensive Tesla exploded onto the market just a few years ago. Norway has since become a huge market for the US-based car manufacturer, which combined all the environmental benefits of an EV with a sleek, fast, high-tech status symbol. Suddenly, the image of electric cars as modest little models like the old Norwegian Th!nk or Buddy models was set aside, and critics of all the Teslas in the bus lanes may be fueled by envy. NRK reported that today, the most popular electric cars in Norway are the Tesla and the Nissan Leaf, the latter priced at NOK 230,900 (USD 28,000), which is low for a car by Norwegian standards.
Bu appears braced to fend off challenges to the current incentive system. “Politicians need to sit tight and let incentives last until the EV is competitive regarding range and price,” she said. “The development so far has been much faster than we could imagine, and we think EVs will be competitive in only a few years.” Meanwhile, sales are expected to keep rolling.