Norway to eliminate tax incentives for electric cars

With a market share of 97.2%, Norway is an electric car paradiseThe Scandinavian country has become the first to achieve almost full electrification of new vehicle registrations by 2025, having reached an 85% market share of electric vehicles in total sales during 2024, and has achieved the objectives of full electrification of sales. was set in 2017.

The uniqueness of the Norwegian model is based on three realities that explain the strong implementation of electric cars in the country. Norway is a country of only 5.5 million inhabitants spread across more dispersed cities and whose purchasing power is higher than the European average, allowing many of its inhabitants to live in houses or buildings with their own parking and home charging points. Furthermore, the authorities have made a great effort to adapt the charging point network to the real needs of its population. And electric cars do not pay the 25% VAT applied to combustion vehicles, so the prices of gasoline-engine models cannot compete with electric ones.

The Norwegian government's roadmap is now underway to reduce budget allocations for electric cars, and next year only electric vehicles under 300,000 kroner, the equivalent of about €27,300, will be exempt from VAT. In 2027, aid and incentives for the purchase of electric cars will disappear completely, provided the Norwegian government's legislative chamber approves this initiative. And that is because, according to some international studies, the policy promoting electric vehicles in Norway has an approximate cost of €1.5 billion that the state is failing to collect. The government's plan is also to increase the registration tax on cars with combustion engines, to continue to discriminate positively for electric cars in the country.

This measure could make the Tesla Model Y (the best-selling car in Norway in the last three years) approximately €6,800 more expensive in just one year. Some driver and customer associations point out that the government's decision is somewhat hasty, since, despite the fact that sales of new electric cars are the highest in the world in percentage terms, the reality is that on the country's streets and highways, 70% of the vehicles in operation are by far an automotive segment.