Will ‘Tesla Tax’ in Norway Be The Nail In Company’s Coffin?

Norway, one of the world’s largest markets for electric vehicles (EVs), is currently considering the implementation of a tax on EVs and some are speculating that it could hit Tesla Inc. hard. That’s because the proposed tax will focus on cars that weigh more than two tonnes, The Financial Times reported. This puts Tesla models in the crosshairs of the tax as it could add over $10,000 or NKr82,800 to the cost of owning the most expensive cars from the brand.

Electric vehicles are very popular in Norway, a country which has officially declared that it will eliminate carbon emissions from vehicles on their roads by the year 2025. This has meant huge government subsidies that benefit electric car buyers. That will change if the so-called ‘Tesla Tax’ becomes law.

The Debate Against Teslas In Norway

While many agree that electric vehicles advance the country’s environmental goals, they’ve been causing some troubling issues as well. One of those issues is traffic.

An environmental representative for Norway’s Labour Party has said that the electric cars clog Oslo’s streets and that their weight destroys the roads they drive on. According to The Financial Times, bus drivers have also complained about electric cars causing traffic in their bus lanes which EV drivers are allowed to use.

Will The ‘Tesla Tax’ End The Company’s Success In Norway?

The Tesla Model X SUV is very popular in Norway because it can tow trailers, which appeal to families who want to take regular road trips. But if this ‘Tesla Tax’ goes through, it will add about NKr36,000 to NKr82,800 more to the cost of the vehicle, which would arguably make it less attractive to would-be buyers. Norway is Tesla’s third largest market.

As Electrek reports, when governments in Hong Kong and Denmark increased taxes on electric vehicles last year, Tesla’s sales slowed dramatically and the sales of all EVs in Hong Kong came to a halt. But the price increases in Hong Kong and Denmark were lower than the projected tax-induced price hikes in Norway, so that could help buffer the loss of revenue. Also, the ‘Tesla Tax’ is still only a fraction of the taxes imposed on cars with gas engines. So, there’s still a less appealing alternative that could help sustain the sales of Teslas and electric vehicles in general if the tax is implemented.

According to Electrek, Teslas are expected to retain their popularity in Norway ahead of the release of the Model 3 next year. These cars are lighter and buyers should be able to avoid the ‘Tesla Tax’ if it is made law.

Do you think that the proposed Tesla tax could put a dent in the company’s revenue? Let us know your thoughts in the comments.


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[Featured Image by Sean Gallup/Getty Images]

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