Norway Moves To Phase Out Electric Vehicle Incentives By 2027

Norway will gradually end its EV tax benefits by 2027 after nearly achieving full electrification, sparking debate among automakers and environmental groups.

Norway is approaching the final stage of one of the most successful transitions in modern automotive history — the shift to electric vehicles. In September 2025, 98.3% of all new cars sold in the country were fully electric. The government now believes the mission is complete and plans to phase out the generous tax incentives that helped make it possible.

Finance Minister Jens Stoltenberg announced that the country has achieved its goal of making new passenger cars fully electric, and it is time to wind down the benefits. Under the 2026 draft budget, the VAT exemption threshold for EVs will be reduced from 500,000 to 300,000 kroner, and the benefit will be completely removed by 2027. Today, buyers save up to 125,000 kroner on tax and are exempt from import, road, and registration fees — incentives that have made EV ownership highly attractive.

The decision has sparked debate. The Norwegian EV Association points out that around 70% of all vehicles on the road still rely on combustion engines, arguing that the transition is far from complete. Northern regions, where charging infrastructure remains limited, are particularly concerned about the potential slowdown in adoption.

Importers and dealers are also wary. Industry data shows that 96% of new EV models are priced above 300,000 kroner, meaning most buyers will face a 25% VAT as soon as 2026. Some warn this could widen regional disparities and slow fleet renewal.

Despite this, Norway continues to lead Europe in charging infrastructure, with more than 9,000 fast-charging stations according to the NOBIL database. Authorities emphasize that expanding this network will remain a priority to sustain demand even after tax breaks end.

In an international context, Norway’s move stands out. While Germany plans to reintroduce EV subsidies and countries like the UK and China have seen sales dip after reducing incentives, Oslo is testing whether a mature electric market can sustain itself without financial support. If the experiment succeeds, it could serve as a model for nations aiming for similar electric balance.