Auto parts are penalized if they choose an electric car instead of a gasoline or diesel car – NRK Norway – News roundup from different parts of the country

For 25 years, the Bilkollektivet car-sharing service has had its own members sharing the use of the collective’s cars. They will reduce the number of cars in the city and limit emissions.

But only 73 of the collective’s 500 cars are electric. They themselves say they could replace 100 small and midsize fossil cars with emission-free cars, but the government’s tax rules mean they can’t afford it.

– We estimate that in July this made a difference of 4,000 crowns per car for our members. In a total of a year, with the use of the car that we have, we are talking about NOK 2.7 million in additional costs, says general manager Morten Munch-Olsen.

Tax rules penalize weather choices

Electric cars are generally more expensive than similar fossil cars before they hit the market. But measures such as the VAT exemption when buying electric cars still make it a cheaper alternative.

This VAT exemption does not apply when renting a car. Therefore, car dealers must pay VAT when they take a car out of Bilkollektivet, whether it is powered by electricity or fossil fuels. That makes electric cars a more expensive option, according to the company.

– What’s stupid is that politicians love carpooling and electric cars. It’s good for the city and the environment, but it doesn’t go hand in hand. While the owner of a private car avoids VAT on an electric car, our members must pay VAT on the rental, regardless of whether it is a gasoline or electric car. This means that the member electric car quickly becomes 25 percent more expensive than it should have been, says Munch-Olsen, before continuing:

– It cannot be the case that you are punished as a car part compared to the owner of a private car.

To make the use of an electric car more attractive to its members, Bilkollektivet has started to lower the price they charge for electric car sharing. Since the organization is not going to make money, it means that those who drive with emissions are now sponsoring those who drive without emissions.

Munch-Olsen believes the government should now exempt electric cars from VAT on short-term rentals.

– Don’t grind your own cake now?

– I grind the cake to our members who are part of a non-profit organization to reduce the number of cars in the city, and unnecessary driving and stress on the environment, says the public transport manager.

Electric Car Association: – Hopeless

Christina Bu, general secretary of the Norwegian Electric Car Association, supports Munch-Olsen that there must be change. Especially if the government and the Storting are serious about achieving their own goals.

They claim that all new cars and trucks sold after 2025 must be emission-free.

– This is completely useless and very regrettable. Here’s a player who wants to electrify the car fleet, but can’t do it due to tax rules. Electric cars don’t compete in a business context and something needs to be done about it, says Bu.

She points out that the proportion who buy an electric car privately is 70 percent today. The share that chooses an electric car in the leasing market has dropped to around 30 percent.

– It must be changed as soon as possible; otherwise it is useless if we want to achieve climate goals. The electric car does not compete because gasoline cars have too good schemes, says Bu before finishing his breeding:

– It will be a total disclaimer, and say that they do not want to achieve the climate goals, if nothing is done about it.

The government has no concrete plans to change regulations regarding electric cars. The political leadership in the Finance Ministry also does not provide an interview on the subject.

They claim in an email that current schemes, in their opinion, provide strong incentives to choose an electric car in the car rental market as well.