How much do you save with an electric car in Norway? | Tax incentives | Norwegian EV policy - Norsk elbilforening

No wonder why Norway is called as "electric vehicles capital of the world" ; it has the largest EV per capita than any other country. At the end of Q1-2019, almost every second car of the new sales in Norway was an electric one. That’s impressive and is made possible by it's excellent EV policy - Norsk elbilforening.

Norway was a pioneer in electric vehicles introduction (as early as from early 2000s’). Over past 15+ years, it has been implementing several incentive schemes to make the buying and owning of electric vehicles more favorable.

INCENTIVES FOR SELF-OWNED EV:

Below is a quick overview various financial benefits of self-owning an electric car: 

1. No one-time fee for the purchase

There’s an one-time fee for those who buy traditional benzine / diesel cars – based on the car’s weight, CO2 emission, and NOx emissions etc. This one-time fee is completely waived-off for the electric vehicles purchase.

💡Example: The one-time fee for a Volkswagen Golf – Benzine is about NOK 59,000 and its total purchase price is from NOK 318,000. This whole one-time fee of NOK 59,000 is not applicable for VW electric e-Golf, which costs from NOK 327,000.

2. Exemption from VAT

Most things you buy in Norway incur a value added tax integrated into a product. This sum is calculated into the product by adding 25% to the final product. This is something you do not have when buying an electric car. Electric cars are exempt from the value added tax and will thus save an electric car buyer for big money.

💡Example: If you were to pay VAT on a Nissan Leaf, which costs from NOK 275,900, it would cost NOK 344,875 with 25% VAT. In other words, this VAT exemptions saves you about 69,000 kroner.

3. Reduced annual fee

A standard annual fee for traditional petrol / diesel cars comes to NOK 2820, but owning an electric car comes the annual fee of only NOK 455.

And it's not just cheaper annual fees; electric cars also saves on the surcharge incurred. It comes to NOK 50 for electric car owners, while it is NOK 250 for petrol / diesel owners.

INCENTIVES FOR COMPANY LEASED EV:

Not only is it beneficial to personally own electric cars, but it is also very beneficial for businesses to invest in electric company cars. Businesses will experience a tax of 60% of traditional taxation on petrol / diesel cars. This can save the company large sums per electric company car. Intensives like this can be a major contributor to increasing the number of electric company cars.

💡Example: According to SmartPenger calculator, an electric car costing NOK 350,000 will trigger a tax of NOK 27,468 for a worker earning NOK 600,000. If the car is not an electric car, the tax will be NOK 43,770. (thus, saving 16,302 kroner)

OTHER BENEFITS

Above mentioned are direct financial benefits. But there’re quite a few additional advantages that make the buying and owning an electric cars even more attractive.

1. Toll-free:

It’s common to use toll roads in Norway, thus the saving in toll-free is quite a substantial benefit. Until the end of 2018, the use of toll roads were completely free for the electric vehicles. As of January 1, 2019, Oslo has introduced a toll fee of NOK 10 during rush hours and NOK 5 otherwise for those who drive an electric car. This will be increased to NOK 10 and NOK 15 respectively in 2020.

2. Free parking / discounts:

Many cities offer free parking for electric vehicles, but it varies from one city to the other. For example: Public parking lots in Oslo is completely free; but Bergen municipality charges half the price.

3. Ferry fee:

Another attractive benefit for an EV driver is that they have to pay only half the price for the ferry tickets. If you have a value card (verdikort), you will receive further discounts on top of this. (refer Mekketrend: Fossilbiler blir «teslafisert»)


Above mentioned are particular to Norway, but other benefits such as low fuel costs (kilometers per KWh is much economical than per litre of petrol/diesel), low maintenance costs, lower noise, and above all a fossil-free driving make electric vehicle ownership much exciting and beneficial.

HOW LONG THE EV INCENTIVES / TAX BENEFITS VALID?

Main goal of all these incentives is to promote the electric mobility. So based on the market movements, these benefits will be regulated by the local authorities. Current tax benefit scheme in Norway is expected to be re-assessed in 2020.

References:

➤ Norwegian Electric Car Association
➤ EV benefits explanation from TUElektrisk