Norway, which has the most number of electric vehicle users, is set to review the subsidies it offers on EVs.
The country decided to review the subsidy system after the promotional measure started hurting state finances.
According to one estimate, EV incentives have shrunk the government’s revenue by roughly $660 million.
On April 20, electric car number 50,000, a black Tesla Model S, was registered in Norway. It was a milestone the country crossed three years ahead of time.
At present Norway exempts electric vehicles from automotive sales tax and value added tax.
EVs are also granted access to bus lanes, require a lesser fee for registration, and are allowed free entry onto toll roads in the country and congestion charge zones.
According to official data, one in five cars sold in Norway this year have been electric cars.
And a third of all electric vehicles sold in Europe last year were sold in Norway, which has a population of 5.1 million.
Norway has been consistently focused on green energy, unlike most other nations. It currently produces about 100 percent of its electricity from hydroelectric power plants.
And electric cars account for about one percent of all vehicles on Norway’s roads (USA has only 0.07 percent by comparison).
The finance ministry of Norway has stated that it was aiming at a final agreement on the review of automotive and fuel taxes and that the changes “will be announced in the revised budget” due in May.
The incentives scheme being employed at present has been in place since 2012.
Norwegians began seriously considering a review of EV incentives after the state lost $510 million in subsidies in the wake of growth in the sale of Tesla’s Model S.
The standard Model S sells at $70,000 and with extras it goes for $100,000 each.
These cars accounted for 3 percent of car sales in Norway last year, which led to calls for ending subsidies wealthy buyers.
Thanks to exemptions, the Nissan Leaf costs about $37,700 and the entry level Euro Pulsar hatchback an additional $50 in Norway.
In March last year, Model S broke the country’s sales record for most cars sold in a calendar month. It sold 1,493 electric sedans.
The Norwegian electric vehicle market has also seen an increase in the sale of Nissan Leaf and Volkswagen e-Golf.
Reuters has reported that the Norwegian Electric Car Association was in favour of an extension of the subsidies regime as only one percent of the cars on the Norway’s roads were electric.
The numbers are relatively small, although Norway leads the world in electric car numbers by a wide margin.
Ajith Kumar S