Norway to remove VAT exemption for pricey electric cars
The Norwegian Government followed up on plans to remove EV subsidies when it announced the revised budget this week. First to fall is the VAT exemption on electric cars costing more than 500,000 kroner (just under 49,000 euros) as of 1 January 2023.
The VAT for electric vehicles under the new scheme is dynamic, i.e. the more expensive an electric car is above this cap, the higher the VAT charge it incurs from next year. At the same time, Norway will launch a subsidy scheme to replace the VAT exemption.
“All-electric cars receive support at the bottom (of the price range), but the more expensive electric car you buy, the more VAT you have to pay,” Minister of Finance Trygve Slagsvold Vedum explained the measure. “Today, you can buy electric cars with a long range in all price ranges. We, therefore, believe that it is right that those who choose to buy the most expensive cars also pay some VAT to the community.”
The Norwegian paper The Local calculates that under the new subsidy scheme, buying an electric car with a price tag of more than 600,000 kroner will be charged VAT of 25,000 kroner, about 4%. Electric cars costing over one million kroner will incur 12.5 per cent VAT. Regular VAT in Norway is 25 per cent. . . .[
Plans to change the EV policies had made news a week ago since the Norwegian Ministry of Transport considered abolishing or reducing privileges for electric vehicles in taxes and tolls in larger cities. The government said it wants to push ahead with the traffic turnaround – and not simply replace combustion engines 1:1 with electric cars.
“It’s great that people use electric cars. But it’s not good if people get into their cars and drive to busy urban areas instead of walking, cycling or using public transport,” the Minister of Transport, Jon-Ivar Nygård, said at the time. . . ./quote]
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https://electrek.co/2022/06/15/the-uk-scraps-its-1500-new-ev-grant-a-year-early-heres-why/
The UK scraps its £1,500 new EV grant a year early – Here’s why
The UK government’s £1,500 EV grants were discontinued yesterday, nearly a year earlier than planned.
The UK’s new EV grant is axed.
The UK Department for Transport announced that new EV grant funding will be shifted to support improving EV charging and funding “electric taxis, vans, trucks, motorcycles, and wheelchair accessible vehicles.”
The grant scheme, which first started in 2011, was reduced from £2,500 to £1,500 in December for EVs that cost under £32,000. (FYI, a Tesla Model 3 starts at £45,990.)
The scheme has helped increase the sales of EVs in the UK from less than 1,000 in 2011 to almost 100,000 in the first five months of 2022 alone.
Battery and hybrid electric vehicles (EVs) now make up more than half of all new cars sold and fully electric car sales have risen by 70% in the last year, now representing 1 in 6 new cars joining UK roads.
Here’s the reason the Department for Transport gave for its cancellation of the car grant scheme and the shift of its focus to charging and other electric vehicles. The British government basically says consumers no longer need the incentive to switch to electric:
The government has always been clear the plug-in car grant was temporary and previously confirmed funding until 2022-23. Successive reductions in the size of the grant, and the number of models it covers, have had little effect on rapidly accelerating sales or on the continuously growing range of models being manufactured. . . .