Norway has long promoted the sale of electric cars with lots of tax incentives. Now the Labour Party thinks wealthy buyers who’ve latched on to the most expensive electric car (el-bil) models have enjoyed enough tax advantages, and wants to impose new taxes on those costing more than NOK 600,000 (USD 67,000).
That would boost the price of high-end electric cars including Teslas, which are relatively cheap in Norway because of all their tax exemptions. Hadia Tajik, deputy leader and a Member of Parliament for Labour, told newspaper Dagens Næringsliv (DN) that electric car buyers in general have received more than NOK 8 billion worth of tax exemptions just since 2013.
The buyer of a Tesla Model X, for example, pays only NOK 7,770 in sales taxes, while the buyer of a luxury fossil fuel SUV like the VW Touareg has to pay NOK 569,000 plus the actual price of the vehicle. Prices for a Touareg in Norway start at around NOK 900,000 (USD 98,000), while a Tesla Model X Long Range is priced at NOK 845,900.
Labour, in its new alternative state budget proposal, thus wants the full VAT exemption on electric cars to only apply up to the first NOK 600,000. Electric cars priced over that should start paying Norway’s 25 percent VAT on the amount over that, according to Labour.
Opposition was swift, with the national automobile federation noting that Norwegian tax incentives are the reason that 44 percent of all new car sales in Norway so far this year have been electric. The Conservatives, meanwhile, won’t rule out some new taxes on electric cars, but they also won’t slap new taxes on the cars at time of purchase. Since the Conservatives hold government power and a majority in Parliament, Labour’s proposal has no chance of passing, unless it wins government power in 2021.
Electric cars, meanwhile, also enjoy lots of operating advantages in Norway that up to now have included free parking and exemption from road tolls. Some of that may be rolled back at the local government level.