With Tesla’s help, nearly 80% of new car sales in Norway are electric
- 77.5% of new cars sold in September were purely electric
- Tesla has taken over 30% of the Norwegian auto market
- Pending luxury tax could cap the sale of high-end models
OSLO, Oct. 1 (Reuters) – Demand for midsize models from Tesla Inc (TSLA.O) helped push electric car sales in Norway to nearly 80% of total car sales last month, according to data released Friday.
The country has been a global leader in the switch to electric vehicles and seeks to become the first to end the sale of gasoline and diesel engines by 2025.
Battery-electric vehicles made up 77.5% of all new cars in September, the Norwegian Road Federation (OFV) said, up from 61.5% a year ago.
Tesla Model Y, a compact sport utility vehicle, was the best-selling vehicle with 19.8% of the car market, followed by the company’s Model 3 sedan with 12.3%. The Skoda Enyaq was far third at 4.4%.
First unveiled by California-based Tesla in March 2019, the Model Y was only recently made available to European customers.
By exempting fully electric vehicles from taxes imposed on those who rely on fossil fuels, oil-producing Norway has become a leader in phasing out the use of combustion engines, and in 2020, electric vehicles have sold for the first time compared to all other cars. Read more
However, Norway’s zero-tax policy could change if the center-left winners of last month’s national elections go ahead with their plans to tax the more expensive models.
The next government is expected to be led by Jonas Gahr Stoere, of the Labor Party, and will be made up of parties that have pledged to introduce a 25% VAT on the fraction of the price of a new car that exceeds NKr 600,000 (69,300 $).
While Tesla’s Model Y, which costs below the tax threshold, may not be affected, the company’s top-of-the-line S and X models cost up to SEK 1.3 million and could face large withdrawals. Porsche, Audi and Mercedes-Benz would also be affected.
Labor say the tax will bring additional liquidity to state coffers and is motivated by a sense of fairness.
The tax exemption for electric car purchases was meant to be a way to introduce new technology and cannot last indefinitely, said Skein Road Hansen, spokesperson for Labor tax policy.
“It’s a subsidy. And … the more expensive the car, the bigger the subsidy,” he said.
“Over the past two years we have received a lot of new models… there is a lot of choice for those who still want to buy a car when there is a VAT exemption,” Hansen added.
A tax on luxury electric vehicles would be inappropriate and ultimately slow down Norway’s electrification, said Christina Bu, who heads the Norwegian Association of Electric Vehicles, an interest group.
Even in the northernmost part of the country with freezing winter temperatures and reindeer roaming the streets, sales of electric cars have recently overtaken those powered by gasoline, diesel and hybrid engines, Bu said.
“Now, finally, the more rural areas are starting to buy more electric cars and now is not the time to remove the tax exemption because we also need to get those areas with higher market shares,” he said. -she adds.
($ 1 = 8.6543 Norwegian crowns)
Reporting by Victoria Klesty, editing by Terje Solsvik and Susan Fenton
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