The success of the electric car is also a problem for the state. Norway has already understood this

97% of vehicles sold in Norway are rechargeable. The latest report confirms Bloomberg NEFthe same that showed that the electric motorcycle was already reduce consumption fossil energy in the world. Apparent good news that is a big headache for the state.

If we only took the data for purely electric cars, almost 80% of the cars sold in Norway would be represented. The trend continues to increase, since in 2021 a total of 113,751 electric cars were sold in the Nordic country, or 65% of the cars sold.

Its penetration into the automotive market, according to ACEA, or 12.1% of the total number of vehicles circulating in the country. And yet, the purchase of this type of car already causes a significant hole in the state accounts.

It is estimated that the country has ceased to enter some €1,878 millionthe sale of electric vehicles being heavily subsidized. For example, electric vehicles did not pay VAT (25%), so they were much more competitive on the market than their combustion counterparts.

But, in addition, in Norway, combustion cars are also registered with a rate on CO2 emissions. Which stems from the fact that electric cars were doubly exempt from taxes. First, because they were not assigned to the payment of VAT. The second because they do not emit CO2.

All this forced the Norwegian government to take the decision to VAT refund to the most expensive vehicles, those that exceed the NOK 500,000 (just over 50,000 euros).

With its standards, you might find models like the Audi Q4 e-tron 50 for less than 38,000 euros. Currently, in Spain, the same model has a price of more than 54,000 euros. To which must be added the difference in average wages, 26,832 euros in Spain and 64,930 euros in Norway.

And these are not the only advantages that drivers of electric cars enjoy. In Norway, those who opted for these cars were able to drive for free on its toll roadspark for free and even use the bus lane skip a jam. In 2017, we already had to remove the toll exemption.

die of success

The case of Norway shows how aggressive fiscal policy can yield excellent results. So much so that they have unexpected consequences for the State’s annual balance sheet.

For now, electric vehicles that cost more than 500,000 crowns Norwegians will have to pay VAT, but a vehicle sales tax has also been put on the table used electric and plug-in hybrids.

Norway is not the only country to cut subsidies for plug-in vehicles. Alleging misleading issuance results, Switzerland has done the same with PHEVs there Germany is studying to replicate it. Indeed, it is already planning to abolish aid to electric cars in 2025considering they don’t need an extra boost in their sales.

But purchasing subsidies are not the only problem states face. In the end, it’s as simple as stopping extending these kinds of subsidies. But a majority success of the electric car also obliges governments to rethink formulas to obtain money that should disappear: that obtained thanks to taxes on hydrocarbons.

Currently, 43% (petrol) and 38% (diesel) of the price paid by European drivers for a liter of fuel is used to pay taxes. In Spain, these percentages remain at 41% and 37%, respectively. Greece, Denmark and especially France and Malta are the countries that pay the most in the European Union, exceeding half of the total cost of fuel.

In Australia the possibility has already been put on the table charge a fee for each top-up. The Victoria region, for example, has estimated that it could raise about $30 million a year. And this in a country where the use and sale of electric vehicles are still negligible.

The decline in revenues from uncollected hydrocarbon taxes may be aggravated even with this measure, taking into account that there are countries where use of solar panels to feed their homes is more widespread than in Spain.

At the moment, governments have not come in to assess these possibilities. And it is that taxes have two faces: collect and discourage an activity. If the European Union wants to drastically reduce its polluting emissions in road transport, it is essential to encourage sales of electric cars and position them as a more attractive product than internal combustion cars.

Along the way, an increase in fuel taxes cannot be ruled out. Especially in countries like Spain, where its weight decreases as the selling price to the public increases, due to the very rate settings. But new taxes will also have to be applied, such as payment for use on the roads, recharges, depending on weight of vehicles or of its size if States do not want to end up with a hole in their finances.

A movement which, obviously, will not be among the most popular.

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