Norway is set to retain generous electric vehicle (EV) incentives until 2020 to help maintain its position as one of the world’s leading markets for plug-in vehicles.
The government was due to phase out some incentives, such as the exemption from the 25% rate of VAT, but the country now plans to keep the tax break, Norwegian news reports.
A long-term commitment to EV incentives has been the driving force behind mass adoption of zero-emission vehicles in the country.
The Norwegian government wants all new car sales to be electric vehicles by 2025; they already account for around a quarter of the market.
In the year to the end of September 2016, sales of plug-in hybrid vehicles (PHEV) rose by nearly 11,000 units, compared to the same period in 2015, more than the combined increase in PHEV demand for the entire EU.
The country has seen a year-on-year decline in demand for pure EVs. This is put down to consumers postponing purchases in anticipation of new models being released that have longer ranges.
Renault recently announced its Zoe EV would have an extended range of more than 400km. General Motors is launching the new Ampera-e and Tesla has opened its order book for the new Model 3. Both have ranges that are close to petrol-powered alternatives.
There was some political opposition to extending the tax exemptions for EVs, which have been criticised as subsidies for the rich to buy Teslas.
Norway’s minister of climate and the environment, Vidar Helgesen, defended the scheme and pointed out that Teslas accounted for only 14% of EVs sold.
He said: ‘We should continue the current policy because it works, but the individual elements to be included [in the incentives] and for how long can be discussed.’
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