Norway keeps electric vehicle tax exemption until 2020, positions itself to stay EV leader

Norway’s generous electric vehicle incentives helped the country become the top EV market per capita in the world. The government was set to phase out some of the incentives, like the exemption of the 25% VAT, but Norwegian news now reports that they passed an initiative to keep the VAT exemption for electric vehicles until 2020.

Norway is among the countries aiming for all new car sales to be all-electric by 2025 in order to comply with their emission reduction goals and it’s actually one of the few countries that could achieve it.

As of September 2016, 28.8% of new car sales were plug-in electric vehicles and all-electric cars have a 19.0% market shares – significantly more than any other country.

Considering the growth, it’s not hard to imagine reaching 100% market share by 2025, but the tax exemption until 2020 will be essential. It bridges the gap until more all-electric models reach the market in volume at more affordable prices, like the Tesla Model 3 or Chevy Bolt EV (Ampera E in Europe).

There was some political opposition to extending the tax exemptions for electric vehicles which have often been seen as subsidies for the rich to buy Teslas.

While it’s true that Norway has become an important market for Tesla in term of volume, Norway’s Minister of Climate and the Environment, Vidar Helgesen, highlighted the fact that only 14% of the country’s electric car fleet consist of Tesla vehicles:

“We should continue the current policy because it works, but the individual elements [of the incentives] to be included and for how long can be discussed,”

Somewhat proving his point, Helgesen himself drives a Volkswagen e-Golf.

By all accounts, Norway has already set a great example for countries looking to increase zero-emission vehicle sales, but now it looks like the country is pushing to set the table for the next phase of regulations that aim to put an end to new gas-powered car sales by 2025.