State Handouts Paves Way For Road To Electric Car Paradise

The electric cars in the Norwegian island of Finnoey are exempt from the $6,000-a-year toll charges for the tunnel to the mainland and that is the reasons that this place has the highest density of electric cars in the world.

Now accounting for one in five cars on Finnoey, compared with less than 1 in 100 globally, since the tunnel opened in 2009, there has been a surge in sales of fully electric cars like Teslas and Nissan Leafs.

The International Energy Agency noted that compared to the Netherlands in second on 6.4 percent and Sweden in third on 3.4, twenty-nine percent of all new car registrations in Norway were fully electric or plug-in hybrids last year. The United States less than one percent electric cars and China had almost 1.5 percent.

Norway has the most electric cars per capita thanks to the most generous handouts even though state subsidies support sales of electric cars around the world, and Norway has the most electric cars per capita thanks to the most generous handouts.

In addition to various local incentives like exemptions from road tolls and parking fees, the country offers nationwide tax breaks for users of electric cars than can be worth tens of thousands of dollars.

“Economic incentives work, especially if they are very, very, very strong as in Finnoey,” said former Norwegian central bank governor Svein Gjedrem, who grew up on the western island chain of 3,250 people which is famous for its fish farms and tomatoes.

The efforts to phase out combustion engines in favor of battery-powered vehicles, which are far costlier, have limited ranges and often have long charging times in nations like Britain and France gets complicated by a reliance on state handouts.

Without having to hand out crippling levels of subsidies to millions of buyers, and if those governments are to meet pledges to ban sales of petrol and diesel cars from 2040, technology will have to become significantly cheaper.

because of the strain on public finances and a faster-than-expected adoption of battery-powered cars, electric car incentives are being curbed in Norway which is among the world’s richest countries because of its oil and gas exports.

For example, leaving decision to be taken by the local authorities, it has just scrapped nationwide directives that parking, transport by state-owned ferries and road tolls should be free for electric vehicles. The tax benefits for the most expensive luxury electric cars are also being reviewed.

However, no apparent impact on sales have bene noticed by the reversals. “I‘m not too worried,” said Christina Bu, head of the Norwegian Electric Vehicle Association, because other benefits such as an exemption from value-added tax are staying in place.

There are, however, examples elsewhere in the world of the consequences of withdrawing electric car benefits.

the Norwegian Electric Vehicle Association says that almost double the 320,000 crowns pre-tax cost of an Audi A7 gasoline car is the price of a Tesla Model S electric sedan at 636,000 crowns pre-tax in Norway.

But after an array of taxes led by sales tax (140,000 crowns), carbon dioxide tax (125,000 crowns) and a special tax on the weight of the vehicle (110,000 crowns), the Audi ends up costing more when sold – 697,000 crowns. By contrast, a payment of 638,000 crowns in total has to be made by a Tesla buyer, charged only a small fee for end-of-life scrapping.

It’s little wonder that Tesla CEO Elon Musk tweeted in June: “I love Norway, which is the world leader in EV (electric vehicle) adoption!” His company has invested heavily in Norway, for instance with fast charger networks.

The country’s subsidies model was expensive, acknowledged Norway’s Environment Minister Vidar Helgesen.

But electric cars would be competitive in price with combustion engine cars in the early 2020s due to advances in the technology, he predicted.

(Adapted from Reuters)

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Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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