Norway's electric-car perks burn hole in government's pocket

Tesla Model S was country's best-selling car for a period of time

Norway is the wealthiest country you'd never suspected of actually being wealthy (it's all that North Sea oil and gas), but electric-car perks and incentives are becoming too much even for the deep pockets of the Norwegian government, Reuters reports.

Electric cars have enjoyed benefits such as free public parking, special lanes, tax exemptions and toll-free road access in the Scandinavian country. These perks sound sweet, and they're even sweeter when one considers the monetary value of items like road tolls in northern Europe, where it can sometimes cost tens of Euros just to cross a bridge.

The benefits make a tremendous difference in the costs of car ownership, and the citizens of Norway have been buying up electric cars in droves, registering one of the highest electric-car adoption rates in Europe and the world. One in five cars sold in 2015 in Norway was battery-powered, bringing the nation's fleet up to approximately 50,000 cars, accounting for 2 percent of all cars on the road. Subsidies for electric vehicles have reached such levels that for a short period of time, the Tesla Model S was actually the country's top-selling car. Reuters says that Norway accounted for one-third of all European battery-powered car sales in 2015.

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The Norwegian government is forecasting a tax shortfall of 2 billion kroner ($267.79 million) for this year due to the generous value-added tax breaks given to buyers of electric cars. On Tuesday of this week, the government announced that it would review the issue of car taxes for 2016 but stopped short of saying that other benefits would be curbed. Tax breaks for electric cars are expected to be kept until 2017 and then gradually phased out.

The government also announced plans to give municipalities greater authority in determining which benefits electric-car owners will enjoy, such as the freedom to use bus lanes or parking for free.

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