Scandinavia | Taxing Time For Tesla

Norway's new tax plan could double electric-vehicle unit costs, and add as much as $9,975 to the retail price of the Tesla Model X.

Electric-vehicle manufacturer Tesla’s faltering market advance across Scandinavia is being further impeded by serial disputes with governments and doubts over pension-fund investments.

In Norway, Climate & Environment minister Vidar Helgesen has put Tesla under the legislative spotlight. Norway is proposing to introduce a so-called Tesla Tax as a mechanism to impose tariffs on “heavier” electric cars.

The tax initiative, which is included in the Norwegian government’s 2018 budget, could potentially force Tesla out of Norway. The tax plan could double electric-vehicle unit costs, and add as much as $9,975 to the retail price of the Tesla Model X. The Model X sport utility vehicle is highly popular in Norway—a country dominated by vast mountain ranges and fjords—due to its ability to tow trailers.

The cards aren’t completely stacked against Tesla in what is a winnable fight. Heavily criticized by opposition leaders, the Tesla Tax has created an unusual alliance between Norway’s industry and environmental groups. “This tax is not the right course of action,” said Christina Bu, general secretary of the Norwegian Electric Vehicle Association. “Norway has been a pioneer in electric-car development. The government needs to rescind these proposals. It must not become law.”

The move to de-incentivize electric vehicles runs wholly contrary to Norway’s stated aim of using incentives to achieve the sale of only zero-emission new vehicles by 2025. Norway’s electric-vehicle segment had a combined market share of 40.2% of new passenger-car sales in 2016.

Tesla’s political skirmish in Norway isn’t the American car maker’s only battlefront in Scandinavia. In Denmark, prime minister Lars Løkke Rasmussen’s government has asked the bosses of the country’s eight biggest pension funds, including PensionDanmark, PKA and Danica Pension, to re-examine their investments in Tesla due to the company’s ban on trade unions and its low-wage reputation.

The turbulence around Tesla’s operations in Denmark doesn’t end there. The Tax Ministry suspects Tesla of using bulk purchases of its own vehicles to circumvent up to
$120 million in Danish taxes. Tesla has refuted the claim.