Sanner won’t promise VAT exemption for electric cars after 2021 – VG

For Norway to be able to provide benefits to consumers by purchasing an electric car, they must be approved by ESA, the EFTA Surveillance Authority.

One of the advantages is that you do not have to pay VAT (VAT) when you buy an electric car. This benefit has been approved by the ESA until the end of 2020, but after that it is not known for sure how long it will continue.

The Government and Finance Minister Jan Tore Sanner (H) will now request an extension of the VAT exemption for electric cars. Both the Electric Car Association and the National Association of Car Importers require you to apply for a VAT exemption for three new years.

However, the Minister of Finance cannot promise to do so.

When asked by VG for how many years of VAT exemption Sanner will apply to ESA, he writes in an email:

– We are in dialogue with ESA about an extension of the VAT exemption to electric cars. The government’s electric vehicle policy is based on the Granavolden platform. It states that we will continue with tax benefits for electric cars in terms of the single tax and VAT throughout this term.

You think climate goals may fail

The Norwegian Electric Car Association and the National Association of Car Importers tell VG they have a clear message for Sanner.

They believe that the abolition of the VAT exemption will prevent Norway from achieving the goal of all new cars sold after 2025 being zero-emission cars.

– The progressive introduction of VAT on electric cars could have very serious consequences for ecological change on roads and the opportunity for Norway to achieve its climate goals. It should weigh heavily on responsible politicians, they tell VG.

Ida Krag at Bilimportørenes landsforening and Christina Bu at Norsk elbilforening further say that predictability must not disappear.

– For the sake of consumers, the auto industry and not least the weather, we expect predictability and certainty that electric car prices will not rise 25 percent overnight, says Bu.

Finance Minister Sanner writes to VG that the government has an ambitious climate policy, that they actively use the tax system to get people and businesses to choose low and zero emissions solutions, and that it works.

– No country in the world has more electric cars per capita and climate emissions are decreasing. This summer, we present a mid-term evaluation of the VAT exemption. It shows that the exemption, along with other measures, has led to lower prices for consumers and increased demand for electric cars, Sanner writes.

Conversion points

When asked by VG how important the renewal of the car fleet in the form of electric cars was to achieving Norwegian climate goals, NTNU Professor Anders Hammer Strømman says:

– Of the solutions we have available today, electrification appears to be one of the most attractive for reducing emissions over time.

He still believes that there are several things that are important and that we need to talk about in the future.

– The government’s electric car policy reduces emissions, but the question is whether it provides sufficient restructuring. I think we need to look for better links between trade policy and electric car policy, says Strømman.

– Why?

– It is very good to import solutions that reduce emissions, but at the same time we must work to create the jobs and industries that we will live from in a future sustainable economy. For example, we should have a debate on whether we should have a battery industry in Norway that could create jobs in restructuring the transport sector.