Electric cars hit hard in Norway: Why they’ve gone from record sales to a historic steep drop

Until just two months ago, Norway was seen as the perfect example of a nation that has strongly encouraged the environmental decarbonization through its tax policies. The numbers were indisputable and indisputable, with a market share of 64.5% electric cars in 2021 and its increase to 79.3% in 2022, 8 out of 10 Norwegians were able to choose the technology of a battery-powered car against those who still preferred one with a petrol engine derived from petroleum.

The reason was clearly explained with the tax system that the government had for the purchase of automobiles, since a car with a combustion engine paid 25% VAT, an electric car paid absolutely nothing of this same tax. The fact was that the purchase of an electric car could be cheaper than a similar car or even less equipped with a combustion engine, and this is how the figures reached unusual sales values ​​for electric vehicles , for which a Toyota Corolla GR was only about 2,000 euros cheaper than a Tesla Model 3.

Thus, in 2022, the 10 best-selling 0km cars in Norway were all electric vehicles:

The one who devastated the operations was the Tesla Model Y with 17,356 units, followed by the Volkswagen ID.4 with 11,561, the Skoda Enyaq with 7,133 vehicles, the BMW iX with 6,127, while the fifth car was the Volvo XC40, which, although it sold 5,507 cars, 5 279 were electric vehicles since this model offers both drives. After Korean Hyundai, with 5,044 units of its new IONIQ 5, Audi with 4,928 units of the Q4 e-tron and 4,740 of the e-tron, Swedish Polestar with 4,692 cars of its Polestar 2 model, and Ford with 4,226 were in sixth place Mustang Mach-E model cars.

But just like until December 2022, the growth has been surprising and exemplary of a policy that boasted of being close to achieving it in 2025 100% of new cars in the country will be electricthe collection of taxes on car purchase transactions has also dropped sharply, and it is estimated that they stopped collecting 1,878 million euros.

This is how the new Socialist Labor Government who took office in September 2021, after two consecutive terms of the Conservatives in government, maintained the tax system for the first year, still under the effects of the pandemic, but took the decision to raise new taxes for the 2023 budget Among these taxes , The benefit for electric cars worth more than 500,000 Norwegian krone (NOK), equivalent to around 45,500 euros, has been abolished. Como es sabido, la mayoría de los autos eléctricos tienen un costo superior a ese monto, por lo tanto, no hay tantas options de buen equipamiento y casi todas son de las versions más basics, que no paguen el 25% de IVA sobre su precio official.

As if that were not enough, the VAT they have to pay, a tax is now also added to the weightwhich is taxed with 12.5 Norwegian kroner or its equivalent of 1.12 euros per kilogram which exceeds the initial 500 kilos of each car. This is valid for all cars, but it penalizes more high-end electric cars (owners of large batteries) and plug-in hybrids, since the weight of the internal combustion engine must be added to the weight of its quite heavy batteries, between 300 and 350 kilos.

Since the measure was decided in October, dealers of all brands rushed to patent the cars that they hadn’t even sold yet, speculating that consumers would rush to close operations before the end of the year. And they succeeded, because sales increased 27.8% in November and 92% in December, anticipating the “tax”. Therefore, the month of January 2023 was so bad car sales in the country, which can be compared to 1961 figuressince only 1,860 cars were sold against 39,497 a month ago.

“Car buyers can no longer take surprises like the peso tax that we received last fall. On the contrary, politicians in the revised national budget must be ready to make adjustments to ensure that the share of electric cars remains high,” he said. Christina Bougeneral secretary of the association of electric vehicles.

In January, in the list of the ten best-selling cars in Norway, internal combustion engine vehicles have reappeared. Although slight, the variation has been noticed, since the Toyota Yaris was the second bestseller behind the Volkswagen ID.4, the volkswagen caravelle (a Transporter type van) was the 7th and the Volvo XC60 ranked tenth on the list.

In February, it may be possible to make a comparison closer to reality, because even if all cars will pay the same VAT and tax per kilogramelectric cars and PHEVs will be more expensive because of the batteries.

Electric cars currently account for 20.9% of all passenger cars in Norway, and the charging infrastructure continues to grow more than in any other European country. In 2022 alone, 1,500 new fast charging stations were installed, with more than 5,600 nationwide. But this infrastructure is expensive, and while Norway prides itself on being the continent’s largest supplier of oil and gas in the face of Russia’s war with Ukrainethis advantage does not benefit consumers, who have to pay for the most expensive electricity in Europe anyway.

It will be on display in the coming months. a situation that could perfectly be reproduced in other countries if the policy decides to strongly support electric or sustainable mobility with aids that excite consumers, but which cut the taxation of the car fleet. So far, Norway have shown two sides of the same coin.

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