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Electric Vehicle Incentives: A Tale of Two Countries

While Trump wants to end the EV credit program, in part to punish GM for closing unprofitable car manufacturing plants, Norway is scaling back the generous perks that have enabled EV sales to comprise almost half on new auto sales.
December 30, 2018, 7am PST | Irvin Dawid
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"The Trump administration is already trying to roll back strict fuel-efficiency rules that have helped encourage automakers to produce electric cars," writes Michael Grunwald for POLITICO Magazine on Dec. 23.

Now the president, angry at General Motors for closing U.S. plants, is vowing to eliminate tax credits that have helped encourage consumers to buy electric cars. 

[T]he electric vehicle revolution [in the U.S.] is only in its infancy, and Washington could conceivably help strangle it in its cradle. EV sales are up nearly 80 percent this year, but they’re still under 2 percent of all vehicle sales.

On the other side of the pond, another scenario is unfolding for plug-in battery electric vehicles which will mean the loss of some perks, but for very different reasons. Norway, which has achieved the world's highest per capita market for EVs, will begin to scale back some of its generous incentives now that EVs compose 49 percent of new passenger- and light commercial vehicle sales. The percentage is even higher in Oslo, the nation's capital: 57 percent, according to Sture Portvik, manager of electro-mobility for the City of Oslo.

"[A]s the EV market overtakes gas and diesel cars, a question looms about how long the country will be able to continue its lauded incentive programs," writes Tracey Lindeman for CityLab on Dec. 27. "In Oslo, plans to make the downtown core entirely car-free mean the city is starting to roll back some of the freebies it gave to EV owners." [See Streetfilms: "Oslo: The Journey to Car-free."]

In 2020,... Norwegians risk losing one of the most important incentives: the exemption from a 25-percent sales tax (VAT) that saves each EV buyer thousands of dollars.

Municipalities are allowed to introduce some toll, parking, and ferry fees for EVs as a way to regain tax revenue while the fossil market winds down.

According to the Norwegian Electric Vehicle Association, "the Norwegian Parliament have decided on a national goal that all new cars sold by 2025 should be zero emission." A goal is different than a ban, so it will be interesting to see how the loss of perks affects EV sales.

Full perks for fuel cell electric vehicles, which emit only water vapor and heat, will remain "because they haven’t yet crossed over to the mainstream," adds Lindeman.

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Published on Thursday, December 27, 2018 in CityLab
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