Tax Exemptions in Norway Cut Tesla Model S Price in Half


Tesla Model S

Tesla Model S

We’ve touched upon this before, but we thought it time to revisit the mysterious topic of why the Tesla Model S (the Nissan LEAF too) sells incredibly well in Norway.

Nissan LEAF

Nissan LEAF

Oddly, we do get asked on occasion why EVs do particularly well in Norway.  I say “oddly” because we certainly aren’t a Norwegian website, nor do we claim to have inside info on Norway’s automotive market, but since this question continues to pop up, we’ll try to give it a rightful answer.

It’s the tax exemptions

In Norway, the Tesla Model S costs roughly $81,000 to $92,000 plus options (that’s translated to US currency, of course).  While the figure sounds high, fact is it’s not.  The typical, comparable (size and power) gas-burning vehicle in Norway goes for approximately $300,000.  The Model S would cost nearly that much there too were it not for tax exemptions.

The Model S benefits from a tax exemption of up to $91,000 in Norway, or half the price of the after-exemption MSRP of the Model S.

It’s not that the Model S is cheap in Norway though.

A vehicle such as the cheapest version of the Volkswagen Golf can be purchased there for approximately $50,000.

VW Golf is Typically Norway's Top Selling Vehicle, Though It Has Been Beaten in Recent Months by Both the Nissan LEAF and the Tesla Model S

VW Golf is Typically Norway’s Top Selling Vehicle, Though It Has Been Beaten in Recent Months by Both the Nissan LEAF and the Tesla Model S

But does the 1.4-liter turbocharged 121 hp Golf compete with the Model S?  Absolutely not.


So, your options become a basic econobox for $50,000-ish, a midsized family sedan for $80,000, a BMW 7 Series with the most powerful engine option for $300,000, a Nissan LEAF for less than $40,000 or a Tesla Model S for $90,000 (other options obviously do exist, these options were presented just to drive home my point).

If, for example, a Honda Accord went for $80,000 in the US, then don’t you think more buyers would consider the Tesla Model S?

Or if the choice were between a $250,000 Mercedes E Class and the $90,000 Tesla Model S, which one do you think would sell in higher volumes?


Sure, it’s all rather confusing, as we don’t know what the Norwegian mindset is, but logic says that if you can get all the performance of a 7 Series BMW for one-third the price than why wouldn’t you?

Or, to look at it one more way, if you’re gonna spend up to $80,000 for a loaded midsize family sedan, then why not spend a few more grand to get the Model S?

Chart Time

Take a gander at the chart below and hopefully the picture becomes clearer.  For reference, the BMW i3, at 237,100 Norwegian krone, works out to approximately $39,100.

Norway Price Chart -

Norway Price Chart – GRØNN BIL website

Categories: Tesla


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14 Comments on "Tax Exemptions in Norway Cut Tesla Model S Price in Half"

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Silly Norwegians, they tax automobiles heavily at the source, to…

…. oh right, to help pay for highway and road infrastructure, as well as to mitigate the public-health and economic downside of car culture.

Maybe that’s why they don’t have collapsing bridges on their main highways. And maybe that’s why they have ample funding for public transit.

We Americans are the smart ones of course. Make cars cheap so that people get addicted to buying them every other year, even if neither them nor society can afford it.

And then have fun political fights every year, all year, over budget shortfalls for funding these things.

The reason Norway has all it’s infrastructure in order plus $600 billion it doesn’t know what to do with is oil, not excessive taxation of cars. It’s great for an EV start up like Tesla that such an easy market exists but the country is basically an abomination in some respects.

Yeah, I’m sure Norway is an “abomination” in respects like:

– Life expectancy
– Poverty rate
– Access to higher education
– Public transit

Just like its Scandinavian neighbors, who have none of its oil but similar policies.

The only thing I would find abominable is Norwegian weather. I don’t think I could stand any season there except summer 🙂

The United States produces lots of oil too. We just aren’t as smart as Norway to put laws in place to keep us from burning every drop we can produce, and more.

I post this all the time . . . but here is how to understand Norway: Norway is the wise drug dealer that follows the maxim ‘Don’t get high on your own supply.’ They sell lots of oil but they know it won’t last forever and it is a problematic energy source. So while they rich by selling it to others, they have among the highest gas taxes in the world to keep from getting addicted. They’ve got plenty of hydro electric power. They have a growing offshore wind industry. They even have solar despite latitude. So they are wisely following a long-term plan. The rest of us . . . we are short-sighted fools.

They are just thing big .

Speaking of sales in Europe…
In November something remarkable happened: EV sales in Europe were above 8,000 units (just sum up figures for Holland, Norway, France, Germany, Denmark. I didn’t see figures for GB and Northern Ireland).
That’s double October previous record 4,000 units. Previous months sales were much lower than that.
That means that for the first time sales in Western Europe and US were comparable. And considering the smaller European total car market, EV share turned out to be even higher in Western Europe than in US (about 0.8% and 0.7% respectively).

Isn’t a doubling of monthly sales worth a post, without waiting for definitive European sales data (always late to come)? What we know is enough…no?

Most of that doubling in November was a ship of Outlander PHEVs arriving in the Netherlands catering to a huge backorder. As a result EV sales were 10% of the total market in that country in November. It’s incidental factors not exponential growth.

I’m aware of that being part of the reason. But:
1- That’s not all: Outlander PHEV sales in Holland were reported at 2,600. Not 4,000.
In fact, sales in Norway were also a record 12% market share.
2- Outlander deliveries should be even higher in December (than that’s it).
3- We can hope in a growing trend that will keep sales near that level even in the beginning of next year. Then, I hope, even higher. But even if that were not the case:
4- I think it’s a very good thing to do, to make hay while the sun shines, and create a stirring with a big news. It will probably still be the case next month, and if it were not to be the case in January and sales will go a bit down… that would not be much of a news.
That’s my view. (Actually, our not giving relevance to these good news would not prevent someone who wants to focus on the negative side to do so in January, anyway…)

Outlander sales in Holland in November and December are due to a change in tax regulation for companies from next year.
But I’m just realizing now: the anomaly is that, for the just mentioned reason, Mitsubishi have delivered only in Holland all the Outlander PHEVs they could, but if the are able to keep the same production level (and I don’t see why that should not be the case), in the following months only the distribution of vehicles among different countries should be different, not the total amount.
In that case, total European sales should not be any less.
There’s the possibility, though, they will be less, in case, due to the special situation, Mitsubishi shipped to Holland vehicles that it would have normally delivered to non-European countries (that’s basically Japan).
We’ll see.

Note: that should actually be anyway 3,000 vehicles still to deliver to Holland next year, since Mitsubishi will probably not be able to deliver all the 10,000 or so this year.

Your reasoning – looking at the price of other cars – is good but still only half of the story. It’s not only the price at salespoint that counts. After that moment an electric car keeps serving you all kinds of benefits. You pay no city tax while entering Oslo, for instance. You can use bus and taxi lanes while others are stuck in a traffic jam. You can park for free. I read somewhere that a suburbian Osloer working in the city saves $ 8000 every single year relative to a similar ICE car.

It’s definitely a good plan to get the EV adoption rate up and they have the free cash to make this work for several more years. It will be interesting and a great day when they have to think about lessening the subsides because ~50%+ of Norwegian vehicles are electric and aren’t buying gas anymore. Oh, what a day that will be…

In the US EV’s are doing fairly well considering a lot of production for main stream EV’s is at it’s max and at the same time they are fighting more in the open market vs in Norway with the Taxes are doubled up on their side. It’s amazing how I get to see plug in cars every weekend in a area which is not known for being EV friendly.

The real shocker in the price chart: the Karma costs 2.5 times as much as a Model S 85 kWh.