Incentives and Legislation
Incentives and legislation that aim to increase uptake of alternative fuels vehicles and infrastructure.
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- Registration tax benefits
Norway has a long history in offering electric car incentives, dating back to 1990 (Haugneland et al., 2017). A clear, stable policy framework and political commitment has been crucial to create long-term reliable electric vehicle (EV) market conditions. Particularly strong incentives apply to the purchase of zero-emission vehicles (ZEVs). Battery electric vehicles (BEVs) have been exempted from registration tax since 1990. The exemption from VAT and registration taxes is only granted to BEVs. This is a key determinant for the lower purchase price of BEV models versus plug-in hybrid (PH)EVs. Yet, PHEVs are fairly popular in households with one car or taking frequent trips exceeding 100 km. In January 2017, the incentives for PHEVs were increased. In particular, the deduction on the total weight to be used for the determination of the taxation rate increased from 15 % in 2015 to 26 % in 2017. For large PHEVs this change leads to registration tax cuts of NOK 16 000-80 000 (EUR 1 700-8 400) compared with similar internal combustion engine (ICE) cars.
Electric cars are exempt from the re-registration fee as of 2021.
- Ownership tax benefits
Norway bases circulation taxes on the type of fuel. Battery electric vehicles (BEVs) and plug-in hybrid (PH)EVs are granted a reduction and only pay a scrapping fee, EUR 249. NOK 455 (EUR 48) is the annual road tax for both fully-electric vehicles and plug-in hybrids,
- Company tax benefits
Company car tax reduction reduced to 40 % (2018 onwards) Exemption from 25 % VAT on leasing (2015) The benefit of private use of a company car is set to 30 % of the car's list price as new, up to NOK 314 400 and 20 % of the excess list price. In the case of electric cars, the basis for the calculation is only 60 % of the car’s list price as new.
The employee has free use of a car from January 2020. For example, if the electric car has a list price of NOK 249 000.
Reduced basis for calculation: NOK 249 000 x 60 % = NOK 124 500
Calculated benefit from January 2020: (NOK 149 400 x 30 %)/12 = NOK 3 735
- Purchase subsidies
Companies that purchase electric vans can receive between NOK 15 000 and NOK 50 000 in support for purchases, depending on the size of the car (ENOVA ).
Drivers are exempt from purchase tax. The current government has decided to keep the incentives for zero-emission cars until the end of 2021. This means no CO2 tax, no weight tax, no VAT benefit.
- VAT benefits
BEVs have been exempted from VAT on purchase since 2001 (new and second-hand vehicles). In 2015, the VAT exemption was extended to include leasing.
The VAT exemption for ZEVs in Norway has been approved by the EFTA Surveillance Authority (ESA) until the end of 2022.
- Other financial benefits
Norway introduced a special E-Number plate for EVs which gives authorities the possibility to choose local incentives such as free parking, using bus lanes based on these number plates. It also helps increasing awareness of clean vehicles on the roads. Since 2016, Norwegian municipalities have the authority to determine fees and exemption categories. This led to different local regulatory frameworks: electric cars pay the same parking fee as ICEs in Trondheim; half the price of ICEs in the city centre of Bergen; and they are subject to strongly differentiated parking fees in Oslo, where 1 300 of the 6 500 parking places in municipal parking lots are dedicated to electric car charging and equipped with slow chargers (3.6 kW). These parking spots plus charging are free until 2019. In Norway, electric cars are granted free access to bus lanes, but several bus corridors are experiencing regular congestion during rush hour. The municipality of Oslo tackled this issue in 2017 by granting access to the bus lane on two specific corridors during rush hours only to electric cars with two or more persons on board. In Norway, electric cars are exempt from paying for the use of regional toll roads. This measure added up to NOK 7 500 (EUR 790) in 2016 (Figenbaum and Kolbenstvedt 2016). From 2019, electric cars will have to pay the tolls, but at a lower fee. Since 2009, electric cars have been granted free access on most ferries that connect parts of the national road network. On ferry crossings that are not part of the national road network, local governments decide the fees.
- Local incentives
Oslo city council provides grants for upgrading/establishing infrastructure in housing associations and co-owners to facilitate the establishment of charging stations. The subsidy is a maximum of 20 % of approved investment costs and limited upwards to NOK 5,000 per charging point it is related to. The maximum grant amount per housing association or co-ownership is NOK 1 000 000. (Oslo City Council, 2021).
Housing associations and co-owners in Bergen municipality can apply for support to establish infrastructure that facilitates the establishment of charging stations. The scheme has received new funding in 2021,but is now temporarily closed pending adjustments in the arrangements for processing applications for 2021. The subsidy is a maximum of 20 % of approved investment costs and limited to NOK 5 000 per charging point. The maximum grant amount per housing association or co-ownership is limited to NOK 200 000.
Bærum municipality offers grants for better charging of electric cars in housing companies to stimulate safe and easy home charging for electric cars. Housing associations, co-owners, housing associations, homeowners' associations and cooperatives in Bærum municipality can apply. The maximum support amount per housing company is NOK 50 000.
- AF infrastructure incentives
Regulation on the requirements for electric vehicle supply equipment (EVSE) in new buildings and parking lots (Norwegian Ministry of Transport, 2016). For parking lots and parking areas of new buildings, a minimum amount of 6 % has to be allocated to electric cars. Oslo: expanded budget for EVSE deployment. The 2018 budget allocated to housing associations for installing chargers doubles the 2017 budget to NOK 20 million (EUR 2.1 million).
In terms of national EV infrastructure, the Norwegian government has already established fast-charging stations every 50 km on all main roads.
Electric Car Association charging chip – the Norwegian Electric Car Association (Elbilforeningens) gives users access to charging units all over the country at a reduced price.