Norway’s electric car owners face ‘Tesla tax’
2017-10-12  Richard Milne in Oslo

[image  / Bloomberg
A Tesla Model X, which could cost up to $10,500 more in Norway if the tax is
imposed © 

Critics say move will undermine the country’s standing as a pioneer of
zero-emission vehicles

Norway is proposing a “Tesla tax” that would hit owners of the heaviest
electric cars in a move that critics say will undermine the Scandinavian
country’s standing as a pioneer of zero-emission vehicles.

Sales of electric cars and hybrids accounted for 60 per cent of new vehicle
sales in Norway last month, fuelled by extensive subsidies in taxes, tolls
and parking fees.

But the centre-right minority government in Oslo is now proposing a one-off
tax on all electric cars that weigh more than two tonnes — something that at
present would predominantly target Teslas and potentially add up to
NKr82,800 ($10,500) to the cost of buying one.

“This is a tax bomb. This is gambling with the whole electric vehicle
market. It is a bad signal to send and will affect consumers,” Christina Bu,
general secretary of the Norwegian Electric Vehicle Association, told the
Financial Times.

Norway has been hugely successful in introducing electric cars and aims to
sell only zero-emission new vehicles by 2025. But critics argue that their
popularity is mostly down to an extremely generous set of subsidies that can
cut the price of the most expensive Teslas by about NKr450,000.

When and how to withdraw those subsidies has sparked a huge political
debate. Some Norwegian politicians point out that many of the early adopters
of electric cars were rich households buying Teslas. Bus drivers in the
richest parts of Oslo complain that bus lanes are clogged with electric
cars, which are permitted to use them.

Before the tax proposal on Thursday, Andreas Halse, environmental spokesman
in Oslo for the opposition Labour party, said although electric cars
generated no emissions they contributed significantly to congestion in the
capital as well as damaging roads because of their weight. “It is not just
about emissions; there are other considerations, too, such as the use of
cars versus public transport,” he added.

The new tax proposals would add at least NKr36,000 and as much as NKr82,800
to the cost of the Tesla Model X, a sport utility vehicle popular in Norway
because of its ability to tow trailers, a feature appreciated by families
who own mountain cabins.

Ms Bu said that despite the success of electric vehicles, the market was
still fragile, pointing to a significant fall in sales in neighbouring
Denmark when some tax advantages were withdrawn. “It’s too early. Nobody is
saying we are never going to tax electric vehicles. But the government had
promised to keep the regime the same until 2020,” she added.

The proposal is likely to face fierce resistance in parliament with some of
the minority government’s traditional allies already voicing criticism.

The electric car tax was part of the 2018 budget proposals in which the
government outlined plans to use a record sum from its sovereign wealth
fund, earmarking NKr231bn ($29bn) from its oil fund, about 2.9 per cent of
[© Financial Times 2017]
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