Electric cars hang on to tax breaks

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Owners of electric vehicles will retain all their tax breaks through 2017, and removal of VAT relief in 2018 will be offset by a purchase incentive. Their rights to drive in the public transport lanes, however, may be locally curtailed while registration fees for gasoline- and diesel-fueled vehicles will rise.

The two government parties (the Conservatives and Progress Party) and their two support parties (the Christian Democrats and the Liberals) hammered out an agreement this week that overall will relieve some of the tax pressure on Norwegian motorists. Vehicle ownership in Norway will remain expensive compared to most other countries, however, as politicians continue to pressure Norwegians into using more environmentally friendly modes of transportation.

Vehicles that generate zero emissions, like electric vehicles (EVs), are due to retain their exemption from the most onerous one-time tax on purchase through 2020. It can double the price of the vehicle itself, and has been a major reason why EVs have skyrocketed in popularity in Norway in recent years.

Newspaper Dagens Næringsliv (DN) reported that the price of the most popular EV, the Tesla Model S, will nonetheless rise. That’s because the purchase incentive meant to offset the loss of an exemption from Norway’s 25 percent VAT will have a ceiling that’s lower than what a Tesla costs. Teslas that currently sell for around NOK 750,000 in Norway (USD 95,000) will thus effectively be hit with new additional tax estimated at around NOK 200,000.

Vehicle registration taxes will otherwise be tied to emission levels among conventional vehicles, so electric vehicles will retain a competitive advantage. The state will let local counties decide, however, whether they’ll retain exemption from tolls and rights to drive in the so-called “collective” public transit lanes. Oslo is expected to force them out of bus lanes, while officials in the county surrounding Oslo, Akershus, announced Thursday that they’ll continue to allow EV drivers to use them.

newsinenglish.no staff