Norway Looks To Cut Some Electric Car Incentives In The Future

MAY 9 2015 BY MARK KANE 17

Electric Vehicle Parade in Norway

Electric Vehicle Parade in Norway

Norway recently hit 50,000 electric cars registrations, which on one side is a huge milestone for such a small country (2% of total fleet), but this was also the level at which the government can decide to review incentives to buy all-electric cars.

It appears as though generous incentives will be reduced gradually, as it was inevitable to reduce the subsidy that was mostly responsible for 25% of all new vehicle sales in the country last month.

Up to date there were exemptions from taxes, tolls, free public parking and use of bus lanes. In many cases this was worth some 50% of the net car price.

The government announced that now local authorities will decide about free parking and bus lane usage. Some of these perks will be gone as bus drivers have complained of traffic jams in bus lanes (at least during rush hours).

Tax exemptions will last until 2017, so two more years it seems (it could be replaced by a subsidy, which will decrease over time) while road license fee will switch from 0 to 50% from January 2018, and then to 100% in 2020.  This potential phase out seems to be an orderly suggestion over just suddenly eliminating incentives as we have seen in other countries.

Number Of BEV Registrations Has Soared In Norway Thanks To Its Strong Incentive Program

Number Of BEV Registrations Has Soared In Norway Thanks To Its Strong Incentive Program

In other words, sales of BEV still should be strong in Norway in the near future, but starting in 2017 through 2020, when most incentives are likely phased out, BEV sales will be seriously affected.

Source: The Telegraph, Quartz, Norsk elbilforening

Categories: General

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17 Comments on "Norway Looks To Cut Some Electric Car Incentives In The Future"

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Stephen

That seems to be a fairly orderly phase out. Why is it US lawmakers nearly always have an all or nothing approach to writing incentive laws?

Prad Bitt

Because US politicians are owned by Big Oil and Big Car.

So, you are saying that Big Oil and Big CAR put those incentives in place too?

Mikael

Once again there has not been any talk or indication that the incentives will end at any time in the future.

What was said is that the generous incentives will be kept as a minimum to 2017.

So with 99% certainty the largest incentives will be kept beyond 2017 and beyond 2020.

And since Norway also have the extra really large taxes on weight, emissions and engine power when you buy a new car a BEV will forever be a lot cheaper in Norway than an ICE.

BEV sales will only go up in Norway and not be “seriously affected”. Saying anything else is just pure ignorance.

Think it is great news for the short-term through at least 2017…Norway can get a lot of EVs on the road between now and then. But when/as the savings begin to get phased out, it is very unlikely we will still see months anywhere near 25%+ market penetration for BEVs like we saw in March. Norway doesn’t have a special population that is adopting the technology at 30x the rate of the rest of Europe. Norway just has a very highly incentivized (almost forced) program to buy BEVs…if elsewhere in the EU/US the government made all EVs half price to ICE vehicles (which obviously given economics and the size of the industry in relation to Norway is not possible), you would see the same phenomenon being played out. However (IMO), what we are seeing right now is clearly the groundwork/prep being laid for those incentives overall to begin to pull back…not maintain. In other words, the golden age of BEVs in Norway is right now. I would be very surprised in 2020 to see much of the incentives currently available remain. I think in 2020 you would be more likely to see things like regulations mandating use of EVs vs… Read more »
Mikael
Some of the incentives will go away in most places in Norway within the next five years or so. Like the free road tolls, the bus lane access, free ferry crossings and free city parking. Not because of economical reasons for the state or a phase out of EV incentives but because they are causing some unwanted trouble. The large financial incentives are the VAT exemption and the exemption from the one time taxation for new cars bought. The VAT exemption will be decreased over time. But none of this will be done if it affects the sales of low or zero emission vehicles. Norway is a very special country with very special people and they have decided with a large majority that they will go toward a zero emission car fleet. Politicians are for it, the people are for it, companies are for it, the state is for it. Unlike in any other part of the world. So with almost all financial incentives staying and the EVs getting cheaper and the range longer the golden age of BEVs (and other EVs) in Norway is still to come. So far this year Norway has been at 19% BEVs and 3%… Read more »

All good Mikael,

It is a fun one because we will get an answer and watch it all unfold. I hope to be wrong. Bookmark the thread and we will revisit in exactly 5 years…I’ll be around, (=

Mikael

How about you look at this articel and the comments and discussion until then…

http://insideevs.com/north-america-remain-1-plug-vehicle-sales-chart-next-decade/

😉

I’ll remember this one too for the future to check up on.

And don’t forget that Norways (bare minimum) goal for 2020 is 85 g/km. So far this year they have been on 99 g/km, so a lot of reductions still to go.
And they have their minds set on surpasing that level and see the possibility to get down into the 70’s or even 60’s if both BEVs and PHEVs succeed (which they are changing the registration tax to help with, puting more focus on CO2 levels and NOx levels rather than weight and motorpower, which limits PHEV sales).

It’s all good and fun, but remember that if you’re going to predict nordic countries and especially Norway then you need to remember that they are totally opposite to the US.

Yupe for sure. Saying Norway would drop off a year ago after the program ended this year certainly was dead wrong. …although I’ll note, that the news/confirmation that it would be extended a further 2 years before being scaled back wasn’t on the table at the time either – if it was, certainly not an assumption I would have suggested, (= My statement was (is) that Norway’s numbers were/are totally driven by incentives for the most part, and without it them there would have been very few sales relatively speaking, and not so many going forward; I still believe that to be accurate. Just looking at the BEV/PHEV splits, they should be about 50/50 on a level playing field, if not more skewed to PHEVs given the dynamics of what consumers want in Norway in a vehicle. Basically, my assertion is that Norwegians are regular people, and that the adoption rate will fall much closer (very quickly) to the worldwide curve ex-the large incentives. The same way (but to a lessor degree) that US sales would plummet if the federal credit was removed in the next year or two. That being said, it (Norway EV sales) would not fall totally… Read more »
Mikael
True, the levels would be a lot lower without the incentives. You can just look at Sweden which is a similar country but with very little incentives and no extra punishments for ICE’s where EV sales are just barely getting above 2%. Norway might have been at 3-6% but nowhere near 20+%. What I have been telling before about the 50k level is that it’s just a start. There will never be any sudden drops in incentives in Norway. There will never be a leveled playing field between ICE’s and EV’s since the former is unwanted and the latter very much wanted. So IF the price was the same for EVs and ICEs in Norway the sales would drop fast. But that is a scenario that will never happen and any assumption that “in 2015” “after 50k” “in 2018” the sales will drop because incentives will suddenly go away is a faulty one. The assumption should be “they might not put that 7% VAT on EV’s as they said in 2018, they might change their minds and prolong the full VAT exemption a couple of years more”. So I agree with you and your conclusions based on those assumptions, just… Read more »

Norway is certainly the best. Although I am still upset at them for not maintaining/funding the Norwegian pavilion at Epcot – no more Maelstrom ride anymore, have to put up with a “Frozen” themed replacement now.

…it is practically a crime

Paul

So if the Bolt, Tesla Model 3 and Leaf 2 all come out in 2017, they will miss the tax incentive in Norway, but the road license fee will still be zero. But if they come out in 2018, the road license fee will be 50%.

He who succeeds in rolling out his 200 miles EV in 2017, even if it’s only the last month (but with volume) may see a large sales spike.

Paul

I think Mikael might be right. The incentive-changes are not yet as clear cut as Mark supposes. Here are the comments of the EV association of Norway in Google-translated English:
https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.elbil.no%2Fnyheter%2Felbilpolitikk%2F3543-den-nye-elbilpolitikken-enkelt-forklart&edit-text=&act=url

Erling

BEV will be taxfree in 2017 in Norway where I live. A small increase in taxes, VAT, will be introduced from january 2018. A new generation Leaf, Bolt or Tesla model 3, all with batteries in the 30-40 kWh range, will have big sales in 2017 I think. My plan is to have a LEAF in 2017, the current model is too ugly.

Mister G

We have reached 400 ppm of CO2…let’s celebrate our demise.

Ocean Railroader

We did we made a cake.

James

Just like any good drug dealer. First you get them hooked then you increase the price (reduce the subsidy in this case).

🙂