Norway has already set a date for the fiscal “normalization” of electric cars after becoming, de facto, the first country in the world where new registrations are almost entirely battery-powered. According to the latest data, in September, 100% electric vehicles accounted for 98.3% of passenger car sales, an achievement that the Executive interprets as a “completed objective” for 2025. On this issue, it must be said that in 2024, 88.9% had already been reached for the year as a whole.
Based on these data, the cabinet of Jens Stoltenberg, who is current Minister of Finance, has already included in the General State Budgets a downward revision of the incentives (that is, lowering them, which for the consumer has the effect of an increase in VAT).
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Thus, in 2026, the VAT exemption threshold (25%) will drop from 500,000 to 300,000 Norwegian crowns (from 45,108.97 euros to 27,065.38 euros), incorporating mid-range models into the tax, ensuring that the remaining exemptions will be eliminated in 2027 if Parliament gives its approval. This measure will affect “best-selling” cars such as the ‘Tesla Model Y’ and rivals located in that price range, such as the ‘Volkswagen ID.4’.
Seven out of ten cars are still gasoline
Regarding this “cut”, the Norwegian electric vehicle association (Norsk Elbilforening) considers that the withdrawal is “too fast” and calls for a more gradual calendar so as not to erode the relative advantage of electric vehicles over combustion. Although the electrification of the new market is practically total, seven out of every ten cars that circulate in the country continue to be gasoline or diesel, which, in his opinion, advises caution so as not to slow down the renewal of the fleet. “Sudden changes can make more people choose combustion cars again,” warned its general secretary, Christina Bu.
It will not be easy to move this measure forward, since the Executive (which governs in a minority) will need to negotiate the fine print of the budget with various parties in the Storting. The official calendar places the processing of the 2026 National Budget from October 15, when the economic package was presented. The Government has indicated that, to maintain the price differential in favor of electric vehicles, it will simultaneously toughen the registration tax for combustion vehicles.
Norway’s success is not the result of a single incentive, but of a combination sustained for two decades in which the (partial) exemption from VAT has been combined, along with bonuses on tolls and ferries, access to reserved lanes to which must be added a very burdensome taxation on the purchase and use of fossil cars. From 2023, in addition, a weight rate was introduced for electric vehicles and the total VAT exemption was limited to the first 500,000 crowns of the price (45,108.97 euros), a decision endorsed by the EFTA Supervisory Authority and extended until 2026.
The shift that is now being proposed (and that many countries are observing) is typical of mature markets, since when the product is already dominant, the public coffers begin to withdraw support and reallocate resources, that is, “we incentivize you and then we withdraw it.” Now, the question we must ask ourselves is whether the net price increase in volume models (when part of the price exceeds 300,000 crowns or 27,065.38 euros) will temporarily reduce sales or if the greater supply and charging network will offset that effect. In September, the Norwegian country registered 14,084 pure electric cars and only 245 non-electric cars; Tesla (Elon Musk) maintained the lead with the Model Y.
How it would affect Spain
Now how does this affect Spain? For Spain and the rest of the EU, the Norwegian case suggests two lessons. The first is that the “carrot and stick” works, since encouraging electric power and making combustion more expensive accelerates the change. The second is that the withdrawal of aid requires stages (not doing it all at once) and predictability so as not to generate unwanted effects in the short term, especially when most of the park is still thermal. The transition, once consolidated, enters its management phase.