The zero VAT rating was notified by the Norwegian authorities in November 2014. The authority has approved other measures as well in order to stimulate the demand for electric cars in the country. Some of these have already been adopted by Norway and have been in force since the 1990’s. The authority has now decided that these are in line with the State aid rules of the EEA Agreement since they aim to achieve an objective of common interest: the reduction of greenhouse gas emissions.
“The Norwegian fleet of electric cars is the largest per capita in the world” said Ms. Oda Sletnes, the president of the authority. “In 2014, 12.5 percent of new registrations in Norway were electric cars, compared to only 0.3 percent in the EU. This clearly shows how the measures put in place by the Norwegian authorities strengthens the demand for zero-emissions cars and thus contributes to a greener transport sector. This is essential to achieve the climate targets and to improve the poor air quality observed in many cities.”
The support scheme provides an indirect advantage for manufacturers and dealers of electric cars but it does not discriminate between car manufacturers since all electric car models are eligible for aid.
The price of electric cars is declining and the technological progress accelerating, both of these are factors in the authority’s decision to approve the VAT measures until 31st December 2017, after which the Norwegians could notify an extension of the scheme. This will be assessed according to the characteristics of the electric car market at the time of the new evaluation. However, the authority has not assessed the exemption from registration tax for electric vehicles, the free public parking and the free charging, but will keep these measures under review.
For additional information:
Decision on state aid measures in favour of electric vehicles (pdf)
