Norway is planning to phase out its generous electric vehicle incentives after achieving near-complete market transformation, with Finance Minister Jens Stoltenberg declaring that the country's goal of making all new passenger cars electric by 2025 has been achieved, as EV sales reached 98.3% of new car purchases in September.
The Norwegian government proposes lowering the value-added tax (VAT) exemption threshold from 500,000 crowns ($49,600) to 300,000 crowns ($29,800) in 2026, meaning buyers would pay full 25% VAT on amounts exceeding this limit, before completely eliminating the exemption by 2027.
Current Norwegian EV buyers enjoy substantial benefits including exemptions from import duties, road tax, registration tax, and VAT, with a vehicle costing 500,000 crowns saving buyers 125,000 crowns ($12,400) in tax alone, making it one of the world's most generous EV incentive programs.
The Norwegian EV Association has resisted the phaseout plan, arguing that while EVs dominate new car sales, 70% of all vehicles on Norwegian roads still burn fossil fuels, suggesting the transition to electric mobility remains incomplete and will require considerable time to fully replace the existing combustion vehicle fleet.
This contrasts sharply with the United States, where the premature elimination of the $7,500 federal EV tax credit is expected to slow adoption rates in a market far from reaching critical mass, while Germany plans to reintroduce income-based EV subsidies of up to €4,000 ($4,675) starting in 2026.
