In 2022, EVs account for 78% of the new passenger cars registered, according to data submitted by Norway’s Road Traffic Information Council and collated by a software expert on GitHub. But now, a change is coming.
The European nation is trying to adjust its fiscal policies after it spent years leading the all-electric revolution. That was made possible thanks to a public agenda that looked to attract drivers on the green side.
For example, EV owners currently benefit from discounts for all kinds of tolls and parking. Companies enjoy tax discounts if they buy and use EVs. Private citizens and commercial entities alike get an exemption from the 25% value-added tax and the annual road tax. Other local incentives are available, but the most notable one is that EVs are allowed to use the bus and taxi lanes. So, life’s pretty good for those who bought an all-electric car. Admittedly, it’s hard to refuse such an offer. That is especially true when you learn that in 2025 the sale of gas- and diesel-powered passenger cars will be banned.
The budget proposed for 2023 includes the reintroduction of the 25% VAT for the sum paid for a new EV that exceeds the NOK 500,000 ($46,661/€47,907) threshold. So, if your new base-spec Porsche Taycan 4S Sport Turismo is around NOK 1,000,000 ($93,236/€95,800), you’ll soon have to add an extra NOK 125,000 ($11,659/€11,970) to the vehicle’s final price if the budget proposal passes.
EV owners will also have to pay the weight tax from 2023 of NOK 12.5 ($1.1/€1.2) per kilogram. This currently is mandatory only for gas- and diesel-powered cars (including hybrids). It will apply after the first 500 kg (1,102 lb) meaning that a 2,604-kg (5,740-lb) Tesla Model X Plaid will be NOK 26,300 ($2,455/€2,519) more expensive. Fortunately, this tax must be paid only once.
But if EVs are getting pricier, then other fossil fuel-powered cars must follow their example. Customers could otherwise start to consider them as good alternatives. Norway’s government wants to increase the tiered weight and emission taxes. Plug-in hybrids benefitted from a 15% reduction from the weight tax, which from 2023 is going to be lowered to 10%.
EV drivers now pay half of the total value of any toll. From next year, this discount will be replaced with a higher value – 70%. Companies that buy electric cars also pay tax on only 80% of the car’s value, but that’s changing as well. From 2023, they will have to pay the full tax, according to the local press.
Some other fees will be increased as well. For example, registering a pre-owned or imported EV is currently cheaper than doing the same with an ICE car or a PHEV. This is set to go up starting from 2023 based on how old the car in question is.
The Norwegian government now must obtain support from the Parliament for its budget proposal for next year. That’s set to happen with ease, even though some organizations have expressed their discontent with the new tax and fee increases for new EV acquisitions.
Lastly, Norway has a population of 5.3 million, according to the latest World Bank data. Just to put things better into perspective, that’s over 3 million less than New York City’s population.