Four out of five new cars sold in Norway in 2022 were electric, led by Tesla, but some industry insiders say the new taxes could derail the country’s goal of becoming the first to phase out gasoline and diesel cars by 2025. according to the data. Reuters.

Tesla Inc. Elon Musk’s all-electric car sold more cars in Norway than any other brand for the second year in a row, with a 12.2 percent share of the total market, ahead of Volkswagen’s 11.6 percent, according to registration data.

While China is the world’s largest car market, Norway, with its 5.5 million inhabitants, has achieved the world’s largest share of electric vehicles thanks to generous subsidies, making it a testing ground for carmakers to launch new models.

The share of battery electric vehicles (BEVs) sold will rise to 79.3% of all new cars in 2022, up from 65% in 2021, up from 2.9% a decade ago, according to the Norwegian Road Federation (OFV).

The Tesla Model Y was the most popular model of the year, ahead of Volkswagen’s electric ID.4 in second place and the Skoda Enyaq in third.

In an effort to end the sale of petrol and diesel cars, oil-producing Norway has so far exempted battery electric cars from the taxes imposed on rivals that use internal combustion engines.

But while the tax breaks help reduce emissions, they are costing the state 39.4 billion kroner ($4 billion) in lost revenue in 2022, the finance ministry said, and the center-left coalition government is seeking to limit the benefits to high-end vehicles.

Those who bought an electric Porsche Turbo S last year would have paid at least NOK 1.7 million, but if it were charged like its gasoline equivalent, the price would be more than NOK 2.1 million.

The Norwegian Automobile Federation (NAF), an interest group representing the interests of car owners, said the new weight-based car tax could also have a negative impact on BEV sales because electric motor systems are heavier than their fossil fuel equivalents.

“We are concerned that sales will decrease as a result of the government’s proposed new weight-based tax,” NAF spokesman Tor Egil Bradland said.

According to him, the government also failed to adequately resolve one of the main practical issues for electric car owners, related to charging stations and payment methods for their use.

The government has defended its policy on electric cars

“The electric car has become the new normal car for Norwegians, and that means we have to look at how we use public funds,” said Johan Vasara, state secretary of Norway’s Ministry of Transport, a member of the Labor Party.

“We are very confident that the electric car is here to stay,” Vasara said, adding that the government should focus its efforts on other transport segments, including heavy trucks.