The tax disadvantages of electric cars

Cars, VAT, Taxes

Purchase incentives, tax reduction and circulation facilities reduce the income of the states.

The climate emergency has accelerated the transition to electromobility so much that problems do not stop happening. As we explain in this article, and according to data from SNE Research, the Chinese company CATL concentrated 32.6% of the total production of batteries in the world. The dependence on the Asian market is dazzling, as is the lack of infrastructure in southern Europe. In the north, on the other hand, they have another problem: state tax collection.

As revealed from Xataka, a report by Bloomberg NEF, 97% of vehicles registered in Norway are plug-in. However, the good news comes accompanied by a decreased income for the State of 1,878 million.

All of Europe is promoting electromobility through state aid that, logically, involves direct spending and a reduction in income from public coffers. A hole that, for Norway, became unsustainable a few years ago and, sooner or later, the rest of the countries of the old continent will experience.


Bloomberg data makes it very clear: 80% of cars sold in Norway are 100% electric. A segment that already accounted for 65% of registrations in 2021 and that covers 12.1% of vehicles in circulation today.

Norway has also resorted to public aid to encourage citizens and accelerate the leap to electromobility. With this objective, electric cars were exempt from paying the 25% VAT that was applied to combustion models.

A bonus significantly reduced tax revenues and forced the country to change its strategy. Currently, zero-emission cars over 50,000 euros do have to pay VAT and a fee is being considered for second-hand sales.


To the direct taxes of the transaction of electric vehicles is added the absence of collection for their use. For example, the exemption from the cost of highways or the possibility of parking in regulated parking areas for free.

You also have to take into account the taxes attached to fossil fuel, 41% of the cost of gasoline are taxes, like 37% of diesel.

In Norway they have already gone through this contraction and, since 2017, the electric ones pay for the highway like the rest of the users.

Purchase incentives, tax reduction and circulation facilities reduce the income of the states.