Norway reviews EV subsidies due to sales growth image

Norway has started reviewing its subsidies for electric cars after the country became the largest user of battery powered cars in the world due to the current government incentives, which is harming the state revenues according to its finance ministry, Siv Jensen.

The North European country reached its 50,000 electric car on Monday, three years earlier than planned with the help from government schemes that have reduced taxes and offered people numerous benefits including exemption from tolls and parking fees, free recharging stations and the use of bus lanes. In Norway 1/5 of all the new cars sold were electric so far this year, and the country with only 5,1 million people living there stood for 1/3 of all European battery powered car sales in 2014. Jensen stated that “Our goal is to present a final agreement on the review of the future of automotive and fuel taxes. The outcome of the review will be announced in the revised budget (that is due in May).”

The current incentive scheme has been active since 2012 but was severely criticized last year as sales of the Tesla Model S, a luxury sedan, rapidly rose and the state budget lost around $380 to $510 million in expected revenue. The Tesla sales stood for almost 3% of sales last year, which led to measures having to be taken to end subsidies for wealthy buyers. Tesla prices start from $70.000 and go to $100,000 with extras. A rise in sales has been registered also by the Nissan Leaf and the Volkswagen e-Golf.

By Gabriela Florea