Norway’s next government may introduce a so-called luxury EV tax on the most expensive electric vehicles, which could dent demand of the high-end Tesla models and slow the penetration of zero-emission vehicles in the country with the highest EV adoption rate.
The Labor party’s Jonas Gahr Stoere is expected to become the new prime minister of Norway, where EVs outsold fossil-fuel-powered vehicles in each month last year.
But Stoere is expected to form a coalition with parties that have vowed to introduce legislation to tax luxury EVs, with a 25-percent value added tax (VAT), because subsidies cannot be handed out forever and because the state needs those revenues.
So, under the proposal, EVs that cost more than $69,420 (600,000 Norwegian crowns) could become subject of that tax. This, analysts and EV associations say, would hit the Tesla S and X models, as well as those of Porsche, Audi, and Mercedes-Benz.
An easing of the government subsidies could slow sales and Norway’s target of phasing out sales of gasoline and diesel cars in 2025.
If Norway’s next government adopts the tax on luxury EVs, it could set a trend worldwide, Sebastian Toma of autoevolution notes.
Tesla, with all its models, is the best-selling brand in Norway. In September, Tesla’s sales accounted for 32.1 percent of all sales in the country, statistics from the Norwegian road federation showed last week.
Of all car sales in Norway last month, a massive 77.5 percent were zero-emission vehicles, the Norwegian road federation said.
The best-selling car was Tesla Model Y with 19.8 percent of the market, followed by Tesla Model 3 with 12.3 percent.
Model Y would not be affected by the proposed luxury EV tax, but Models S and X would be, Reuters notes.
A luxury EV tax would slow electrification and is an “ill-timed” move, Christina Bu, head of the Norwegian EV Association, told Reuters.