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Why Norway loves Tesla Motors

Norway imposes big levies on the sale of fuel burning vehicles. They can amount to more than 100% of the sale price—effectively doubling the price of a vehicle. It’s a supertax.

Exempt from these taxes, however, are electric vehicles. This has not surprisingly made Elon Musk’s Tesla Motors an incredibly popular choice. In fact, Norway has become Tesla’s best overseas market with the highest per capita sales.

And it’s because it makes economic sense, at least for some. Here’s how a Norwegian would save by buying the Tesla Model S

“EV drivers enjoy breaks on levies the government imposes on vehicle purchases to the tune of about $135,000 for the Model S, which has a local starting base price of about $112,000. In other words, if the Model S had a gas engine, like comparable luxury cars, it would cost nearly $250,000 to own one in Norway.”

But this approach has been criticized as a subsidy for the wealthy. People are buying a Tesla S instead of a Porsche. However, you could argue that the intent of the supertax is being fulfilled: more people are buying electric vehicles. Which is why the per capita fleet of plug-in electric vehicles as a whole in Norway is the largest in the world.

So the lesson here is that if you want people to adopt sustainability, just make it cheaper.

Credit to Evgeny of 500px for giving me the idea for this post.

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