Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs

The government of the global leader in EVs adoption, Norway, proposed on Thursday to trim some of the tax breaks for the heaviest electric vehicles (EVs) in a move that-if implemented-would affect owners of cars such as Tesla Model X, for example.

In its 2018 budget proposal unveiled today, Norway's right-wing minority government has included a proposal to change an exemption from the motor vehicle registration tax. The proposal "implies that only heavy electric cars, with a weight in excess of two tonnes, will be subject to motor vehicle registration tax," the budget draft says.

"Electric cars will still be accorded significant advantages in comparison with cars running on fossil fuels. In addition, the Government proposes that electric cars be exempted from re-registration tax and traffic insurance tax," says the 2018 budget proposal.

Norwegian media dubbed the tax on EVs weighing more than 2 tons the "Tesla tax" and have estimated that if approved, the abolishment of the tax break would raise the price of a Tesla Model X by US$8,850 (70,000 Norwegian crowns).

Last month, 29 percent of the new car sales in the country were EVs, with Tesla deliveries soaring.

Thanks to the 'greencentives', Norway has the highest per-capita number of electric cars in the world, with 215.6 EVs per 10,000 inhabitants, according to the IEA and the Financial Times.

The government's "Tesla tax" proposal is seen by critics as undermining Norway's status as a leader in clean vehicles adoption and penetration.

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"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 FT.

But others, like Andreas Halse, environmental spokesman for the opposition Labour party, argue that even if EVs are zero-emission, they still create traffic jams and damage roads because of their weight.

The minority right-wing government will need the support of other parties in Parliament to pass the budget bill.

By Tsvetana Paraskova for Oilprice.com

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