Tesla Takes the Lead in Norway’s EV Race, Reports Reuters

By Victoria Klesty

OSLO – In 2022, four out of five new cars sold in Norway were powered entirely by batteries, with Tesla leading the market. However, industry experts warn that potential new taxes could hinder Norway’s objective of completely phasing out the sale of petrol and diesel vehicles by 2025.

Tesla Inc., headed by Elon Musk, topped the sales charts in Norway for the second consecutive year, capturing a 12.2% share of the overall automobile market. This places it ahead of Volkswagen, which reported an 11.6% share, according to registration data.

While China remains the largest overall car market, Norway, with its population of 5.5 million, boasts the highest percentage of electric vehicles in the world, largely due to attractive subsidies. This has made Norway a key testing ground for automakers introducing new models.

According to the Norwegian Road Federation, the share of battery electric vehicles (BEVs) soared to 79.3% of all new car sales in 2022, an increase from 65% in 2021 and a significant rise from just 2.9% ten years earlier. The Tesla Model Y emerged as the most popular model, followed by Volkswagen’s electric ID.4 and the Skoda Enyaq.

In a bid to eliminate the sale of petrol and diesel vehicles, Norway had previously exempted battery electric vehicles from taxes that apply to internal combustion engine cars. However, the financial implications are becoming evident. In 2022 alone, the government forfeited approximately 39.4 billion crowns ($4.0 billion) in potential revenue due to these exemptions. The current centre-left coalition government is exploring ways to reduce benefits for high-end EVs.

For instance, buyers of an electric Porsche Turbo S last year would have paid a minimum of 1.7 million crowns, compared to over 2.1 million had it been taxed like its petrol equivalent. Additionally, a proposed tax based on vehicle weight may negatively impact BEV sales, as electric components are generally heavier than their fossil-fuel counterparts, according to the Norwegian Automobile Federation (NAF).

NAF spokesperson Thor Egil Braadland expressed concerns about potential declines in EV sales due to the government’s proposed new taxation based on weight. He also highlighted persistent challenges for electric vehicle owners, particularly around the availability and payment methods for charging stations. "You need 10-15 apps to be a well-prepared EV owner in Norway, and we know that many are delaying their purchase of an EV because of that," he stated.

NAF is advocating for an "e-roaming" solution to facilitate easy payment across various charging stations without requiring multiple applications.

In response to these concerns, government officials defended their electric vehicle policies. Johan Vasara, a state secretary at the Norwegian transport ministry, noted, "The electric car has become the new normal car for Norwegians, and we have to examine how we are utilizing society’s funds." He expressed confidence that electric vehicles are here to remain while emphasizing the need to focus on other transportation segments, including heavy goods vehicles.