Politicians in Norway — a major oil-producing country — are coming under increasing pressure from the public to reduce perks and tax breaks for booming electric car sales.
“It’s become a problem,” said Erik Haugstad, a bus driver in the Oslo region who complains about the numerous electric cars clogging bus lanes, which they have the right to use in Norway.
The cars are also exempt from toll payments in cities or fees at public parking spaces, where they can recharge batteries for free.
Photo: AFP
Most importantly, they are exempt from Norway’s sky-high sales taxes and value-added tax.
Norway brought in the generous incentives to cut back on greenhouse gas emissions from traffic, which accounts for 10 percent of total emissions in the country.
The policy has been so successful that 32,000 electric cars are now on the road — by far the highest rate per capita in the world, in a country with a population of 5.1 million.
“I’m a bus driver and I want to transport my passengers as quickly as possible. So, I’d like electric cars to leave the bus lanes, where they’re getting in my way,” Haugstad said.
He said the cars can create a vicious circle — tired of being stuck in traffic, bus users could be tempted to buy an electric car themselves, worsening the congestion problem.
Electric cars already account for 85 percent of traffic in bus lanes during rush hour, according to a study by the Norwegian Public Roads Administration on a busy stretch of road outside Oslo.
“It’s a subject we discuss very often with colleagues during lunch break. Many of them are far more aggressive and don’t measure their words as much as me,” Haugstad said.
No decision has been made so far, but it looks increasingly likely that authorities are going to take action to unclog congested areas — especially during rush hour.
In the meantime, sales of electric cars keep growing. From Nissan’s popular Leaf to the high-end Tesla-made model S, they have accounted for 13 percent of new car sales since the beginning of this year, far ahead of the rest of the world.
In March, Tesla’s Model S became the highest selling car in a single month in Norway’s history, despite its relatively high price.
Although a basic model costs about 60,000 euros (US$79,000), it still sounds like a bargain considering that it would be about double the price if taxes were included.
The popularity of electric cars has caught the authorities off-guard, as they expected to keep the incentives in place until 2017, or until the number of electric cars reaches 50,000.
At the present pace, that figure could be reached at the beginning of next year, forcing the government to rethink its costly policy.
The tax exemptions alone account for up to 4 billion kroner (US$650 million), according to the state’s own estimates.
“We might make lowering adjustments in the future,” Norwegian Prime Minister Erna Solberg recently told the newspaper VG. “But I can promise drivers that there will still be fiscal advantages to driving an electric car.”
The commitment is important, because 48 percent of electric car- owners say their main reason for making the purchase was to save money.
According to a survey by the Norwegian Electric Vehicle Association, only 27 percent said it was for environmental reasons and 12 percent to save timeon.
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