According to the government, Norway’s electric vehicle policy will cost around NOK 30 billion in 2021, more than 10 billion more than previously estimated. The government will now introduce a re-registration fee and a full motor insurance fee for electric cars.
Norway’s electric car policy has received much praise and has led Norway to be in a good position when it comes to the share of electric cars in new car sales.
In the first eight months of the year, electric cars accounted for about 60 percent of new cars sold, according to the government’s proposal for the state budget for 2022.
At the same time, this costs a lot of money, according to the government.
“An estimate of the total tax benefit for electric cars in the excise and tax system is estimated at about NOK 30 billion in 2021,” writes the Ministry of Transport and Communications in its proposals budget for 2022.
I the proposal Compared to a year’s budget, the tax benefits for electric cars were estimated at NOK 19.1 billion this year.
“This increase is due to the fact that sales of electric cars have increased dramatically after the ministry calculated the benefit for 2020,” the government writes.
Increased sales of electric cars will also have an effect on central government car tax revenues in the future.
“Due to tax benefits, the share of electric cars is likely to continue to rise in the coming years and further reduce car tax revenue,” the ministry writes.
– Not real to exaggerate
General Manager Christina Bu of the Norwegian Electric Car Association is happy that the share of electric cars in new car sales is increasing, but she is critical of the state’s costing methods.
– We took a hard line against the state’s calculation method last year and thought the numbers were not correct. Then we came to the figure of 10 billion, while the state meant 19 billion. Of course, the number will increase in 2021, as many more electric cars are sold than expected. But we believe that they do not calculate correctly. We believe it is not real to exaggerate the costs of climate policy, Bu tells E24.
Despite the disagreement over the costs of the electric car policy, Bu believes it should still be beneficial to buy an electric car.
– Climate policy costs something. And the electric car policy works. It’s good climate policy, he says.
Proposes a tax on electric cars
Central government revenue from car taxes has fallen from NOK 78 billion in 2007 to around NOK 40 billion in the proposed state budget for 2022.
– If the current car tax structure is maintained, central government revenues will continue to fall dramatically in the coming years. Therefore, the government is proposing a package of tax increases that will slow the decline in tax revenue and at the same time strengthen incentives to buy zero-emission cars. We use the proceeds from the restructuring to finance the relief on the tiered tax, says Finance Minister Jan Tore Sanner (H) in a Message.
The government is now proposing to introduce a re-registration fee for electric cars, which will provide revenue of NOK 140 million accumulated in 2022. It will also introduce a full motor insurance fee for electric cars, which will provide revenue of NOK 300 million accumulated thereafter. year.
“To ensure a sustainable level of car taxes, it is necessary to price the external costs of driving more precisely, as well as reduce the annual loss of income from excise taxes related to cars,” writes the Ministry of Transport in its proposals budget for 2022.
– A toll bomb
Camilla Ryste, communications manager for NAF, is skeptical, according to one comment.
– The Solberg government will make the purchase of a used electric car very expensive. They are introducing a completely new tariff for electric cars of almost NOK 7,000 per car purchase. It’s a tax bomb for a used electric car, Ryste says.
– Charging a re-registration fee for used electric cars will be a downfall in the coffers, but it will mean a lot to the person who goes and has the buttons if they can get a used electric car with today’s benefits, she says.
The government is also introducing a requirement for rechargeable hybrids to have a 100-kilometer range for their electric motors in order to receive tax benefits. According to NAF, none of the current rechargeable hybrids have such a long electric range. The government is also adjusting the CO2 component in the one-time tax, which according to the NAF makes new gasoline and diesel cars more expensive.
Billions of rate cuts
According to the government, the proposal for a full auto insurance tax has little effect on whether people choose an electric car, but will provide higher auto insurance tax revenue.
According to the government, the proposal to introduce a re-registration fee for electric cars means that the revenue from the fee will remain stable even with a large phasing-in of electric cars into the car fleet in the coming years, and it believes this it will. It doesn’t have much of an effect on whether people choose electric cars.
Here’s the cost of some of the tax benefits on electric cars, according to the government:
- The zero rate on the value added tax for electric cars is estimated to generate a tax expenditure of NOK 11.3 billion in 2021, up from NOK 8.5 billion in 2020.
- The exemption from the single tax is estimated to cost NOK 5.8 billion in 2021, up from NOK 4.6 billion in 2020
- Car insurance tax reduction for electric cars will cost NOK 950 million in 2021, up from NOK 900 million in 2020
- The re-registration fee waiver will cost the state $ 300 million in 2021, up from $ 250 million in 2020
You will study tolls based on position.
The Government notes that the external costs of using low- and zero-emission vehicles, in addition to CO2 emissions, are not included in the price or are inaccurately priced.
“In the 2022 budget, the government proposes changes that slow the decline in revenue, while strengthening incentives to buy electric cars,” the outgoing government writes. in the National Budget.
Provence is a term used for public revenue.
The government will also consider a road pricing scheme, which is based on where and when you drive.
“In addition, a study is being initiated on position-based tolls that can price the external costs of all vehicles in a better way than current tolls,” the government writes.
These are the current benefits for zero-emission cars like electric cars:
- VAT exemption
- one-time fee waiver
- re-enrollment fee waiver
- reduced rate on car insurance tax (in line with motorcycles)
- toll exemption