Tesla escapes special ‘EV tax’ in its important market of Norway

After the Norwegian government announced last month that it was planning a new electric vehicle tax that seemed to be targeted at Tesla’s vehicles, it was expected that the automaker’s growth in this important market could be significantly affected.

But they passed the budget today and fortunately for Tesla buyers, it doesn’t include the new tax geared toward heavier electric vehicles.

The prospect was kind of scary for Tesla since Norway has been an important market for the company.

Before the Californian automaker figured out China, Norway was the company’s second-biggest market despite its small population. Now it is consistently ranking in third place for Tesla with some significant volume – again in relation to its population size.

That success is in large part attributable to the country’s generous EV incentives, but that would have been partly countered by this proposed ‘Tesla tax’.

The tax was based on the weight of electric vehicles and since Tesla sells the biggest and heaviest EVs with large battery packs for longer range, it would have been more heavily affected – especially its bigger Model X.

Here was roughly the structure of the new proposed tax:

Model S:

• Model S P100D – 2,250 kg (4,960 lb)= ~38,250 kr (~$4,850 USD)
• Model S 100D – 2,200 kg (4,850 lb) = ~31,600 kr (~$4,000 USD)
• Model S 75D – 2,090 kg (4,608 lb) = ~11,500 kr (~$1,450 USD)

Model X:

• Model X P100D – 5,531 lb (2,509 kg)= ~86,900 kr (~$11,000 USD)
• Model X 100D – 5,421 lb (2,459 kg) = ~77,500 kr (~$9,800 USD)
• Model X 75D – 5,140 lb (2,300 kg)= ~57,400 kr (~$7,300 USD)

But Tesla escaped the tax after it was disputed by several Norwegian political parties and environmental groups.

The budget has passed today and local media reports that the so-called “Tesla Tax” was removed from the proposal.

Interestingly, the potential of the price increase might have actually helped Tesla’s sales during the fourth quarter. During the first half of the quarter, Tesla already delivered over 800 vehicles or about twice as many as during the same period last year or almost three times as many as during the same period last quarter.

In September, Tesla ended up delivering over 2,000 cars in Norway alone for a new record and helping the country achieve a new record for lowest average CO2 emission for new vehicles.

Norway is the only country that has surpassed 50% market share for EV sales in a month and it’s well on its way to reach its goal of 100% of new car sales being zero-emission vehicles starting in 2025, especially with automakers targeting EV launches in their market first.