Tesla could get hit by a new tax proposed by EV-friendly Norway

Norway’s electric vehicle incentives have made the country the number one market for EV adoption per capita with no close second.

It has been especially good to Tesla and became the automaker’s third biggest market despite its relatively small population size.

In an interesting turn, Norway is now suggesting a new tax that could potentially affect Tesla in the country.

Norwegian media apparently had access to the government’s upcoming new proposed 2018 budget set to be released tomorrow and in it, they found what they are already calling a ‘Tesla tax’.

It looks like it will be a new tax especially for heavier electric vehicles and since Tesla’s cars have the biggest battery packs to enable a longer range, they would be the most affected by the new tax.

All the details are not yet available, but VG reports that Tesla’s vehicles will be taxed 7,000 kroner ($900 USD) for the lightest vehicle, Model S 75D (2,090 kg – 4,608 lb), to 70,000 kroner (~$9,000) for the heaviest vehicle, Model X P100D (5,531 lb – 2,509 kg).

That would be a significant change for Norway’s EV-friendly tax and incentive structure.

Here are the current incentives that Tesla’s vehicles, and other EVs, have access to in the market:

• 50% company car taxation
• Exemption from time fee and VAT
• Annual fee only 455 kr
• Free passage in all the tolls and exemption from congestion charging
• Higher allowance for electric vehicles: 4.20 KR per km
• Free parking in some cities, and free ferry on certain routes

Electrek’s Take

Again, that’s based on information that leaked in the media about the 2018 budget that will be unveiled tomorrow. The budget will be debated before being implemented and things could change until then.

Nonetheless, it is a surprising suggestion from the country aiming to have all new cars being electric by 2025 – the most aggressive of such ZEV target.

Norway is the country in the best position to achieve that goal with already almost 50% of new cars being electric as of last month. In September, they achieve a new record for lowest average CO2 emission for new vehicles thanks to record deliveries from Tesla.

If the measure is adopted, it’s likely to negatively affect Tesla’s sales next year, but it is also likely to help its sales during the current quarter. A similar situation happened in Denmark and Hong Kong, albeit the tax hikes being more significant in those markets, and Tesla’s sales skyrocketed after the tax increases were announced and right before they were implemented.