Norway Puts The Brakes On Generous EV Incentives

It was a sweet deal while it lasted.

But generous incentives that deprived government coffers of tax money and escalated Norway EV sales to one out of every four new cars purchased are being trimmed following negotiations by government leaders who’ve agreed something had to give.

Last month Norway reached a goal of 50,000 plug-in electrified vehicles on the road a couple years ahead of a 2017 cut-off for the target that its initiators did not even know if they’d ever hit when they set it 14 years ago.

The country had outdone itself by juicing the buying public with zero value added tax (VAT), toll-free driving, free public parking, and free access to the bus lanes …

Those pesky EVs in the bus lanes however were already starting to receive pushback in 2013 from folks noting three out of four vehicles in the bus lanes during rush hour were electric.

But a prime kicker spurring agreement between the right-wing government and center right allies has been reduction of tax revenues that are costing the government too much money according to the Telegraph.

As we wrote last month, Minister of Finance Siv Jensen explained last year during her state budget presentation that the county’s current rush toward plug-in electrified vehicles has cost state coffers three to four billion krone ($384 – $512 million) in tax revenue per year.

Due to social pushback and financial pain, things will change in an agreement that has also raised doubts about future incentives, particularly around the busy region of Oslo.

Last month Norway celebrated 50,000th PEV sold. A Tesla – and this is Tesla's largest market.

Last month Norway celebrated the 50,000th PEV sold. A Tesla – and this is Tesla’s largest market.

As of January 2018 electrified vehicle owners will have to start paying half of yearly road fees according to the Telegraph, and by 2020 they’ll be required to pay the full rate.

The VAT exemption is to be substituted with a subsidy equal to the same amount but this will have a ceiling which could lower as technologies develop.

Local authorities now have the right to decide on other perks like whether EVs should get free parking or have access to bus lanes – a benefit not unlike how in the U.S. HOV lanes are allowed access by PEVs in California.

But despite all the concerns over too much too fast, Norway’s total fleet of vehicles on the road is hardly a verdant shade of green.

Factoring existing vehicles on the road total market penetration of registered vehicles is now over 2 percent – sizable but not at all comprehensive.

For their part, plug in advocates were pushing for no change and an extension of full benefits to more thoroughly switch the contry over at least until 2020.

“Norway must implement the EV revolution, not pull up the handbrake before we are halfway,” said Environmental and transport policy spokesman Heikki Holmås last month. “By 2020 nine of 10 cars sold must be zero-emission vehicles” and the benefits must be maintained “so that it is always cheaper for people to choose an electric vehicle rather than fossil cars in the same class.”

As it is, Norway has the brake halfway pulled with hand at the ready to slow further if needed.

Telegraph