"This Is A Tax Bomb": Norway Considers Massive "Tesla Tax"

Tyler Durden's picture

Elon Musk can't seem to catch a break lately with cash burn rates surging to new highs every quarter and embarrassing rumors suggesting that the company, one that was supposed to be the most technologically sophisticated auto manufacturer in the world, has been making parts by hand to try to get Model 3s on the road.

Now, after being one of the largest contributors to Musk's taxpayer-funded enrichment scheme for years, the country of Norway may have just decided that enough is enough with legislators considering a new tax for buyers of electric cars that weigh over two tons...which, as of now, would pretty much only include Teslas.  As the Financial Times notes today, the proposal could tack on a massively punitive $10,500 tax to the purchase of every Tesla in Norway.

Norway is proposing a “Tesla tax” that would hit owners of the heaviest electric cars in a move that critics say will undermine the Scandinavian country’s standing as a pioneer of zero-emission vehicles.

 

Sales of electric cars and hybrids accounted for 60 per cent of new vehicle sales in Norway last month, fuelled by extensive subsidies in taxes, tolls and parking fees.

 

But the centre-right minority government in Oslo is now proposing a one-off tax on all electric cars that weigh more than two tonnes — something that at present would predominantly target Teslas and potentially add up to NKr82,800 ($10,500) to the cost of buying one.

 

“This is a tax bomb. This is gambling with the whole electric vehicle market. It is a bad signal to send and will affect consumers,” Christina Bu, general secretary of the Norwegian Electric Vehicle Association, told the Financial Times.

To date, Norway has been by far the biggest adopter of electric cars and has vowed to sell only zero-emission new vehicles by 2025. But critics argue that their popularity comes down to an extremely generous set of subsidies that can cut the price of the most expensive Teslas by about NKr450,000.

When and how to withdraw those subsidies has sparked a huge political debate. Some Norwegian politicians point out that many of the early adopters of electric cars were rich households buying Teslas. Bus drivers in the richest parts of Oslo complain that bus lanes are clogged with electric cars, which are permitted to use them.

 

Before the tax proposal on Thursday, Andreas Halse, environmental spokesman in Oslo for the opposition Labour party, said although electric cars generated no emissions they contributed significantly to congestion in the capital as well as damaging roads because of their weight. “It is not just about emissions; there are other considerations, too, such as the use of cars versus public transport,” he added.

 

The new tax proposals would add at least NKr36,000 and as much as NKr82,800 to the cost of the Tesla Model X, a sport utility vehicle popular in Norway because of its ability to tow trailers, a feature appreciated by families who own mountain cabins.

Of course, as Morgan Stanley recently pointed out, Teslas and other EVs have recently been found to actually generate more CO2 than they save in many countries around the world.  As a stark reminder to our left-leaning political elites who created these companies with massive taxpayer funded subsidies, Morgan Stanley pointed out that while Teslas don't burn gasoline they do have to be charged using electricity generated by coal and other fossil fuels.

This is where Tesla, along with China’s Guoxuan High-Tech fall short.

 

“Whilst the electric vehicles and lithium batteries manufactured by these two companies do indeed help to reduce direct CO2 emissions from vehicles, electricity is needed to power them,” Morgan Stanley wrote. “And with their primary markets still largely weighted towards fossil-fuel power (72% in the U.S. and 75% in China) the CO2 emissions from this electricity generation are still material.”

 

In other words, “the carbon emissions generated by the electricity required for electric vehicles are greater than those saved by cutting out direct vehicle emissions.”

 

Morgan Stanley calculated that an investment of $1 million in Canadian Solar results in nearly 15,300 metric tons of carbon dioxide being saved every year. For Tesla, such an investment adds nearly one-third of a metric ton of CO2.

Could it be that Tesla might one day have to compete in a world without the benefit of massive taxpayer-funded subsidies?  One can dream...

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2banana's picture

Telsa are coal powered cars.

Their owners pay no gasoline taxes but expect the roads to be maintained.

These cars are purchased by wealthy households who expected massive government subsidies 

What could go wrong?

JohninMK's picture

One of the biggest things going wrong is very little discussed, its the loss of tax revenue on sales of gas and diesel. In Europe in particular they are very heavily taxed yielding lots of revenue.

In trailblazing Norway the Government has been hit with a 60% loss of that tax, plus loss of other taxes and income on car sales and use along with increased costs due to additional road wear (just imagine the road wear due to one of these Teslas on studded winter tyres) and increased congestion in towns. This is not sustainable there or elsewhere.

At some point Governments are going to have to bite the bullet and tax electric cars equitably.

Again in Norway, there could be a serious political problem if they tried to do this by raising the cost of electricity to all users!

JRobby's picture

Just send Musk's subsidies directly to Norway

Lumberjack's picture

In other transportation news...

‘You don’t know where they are going to be’: Amish buggy crashes unsettle another Maine town

http://bangordailynews.com/2017/10/12/news/you-dont-know-where-they-are-...

land_of_the_few's picture

Sure, but Norway is an unusual case, its electricity is 98.5% generated by hydropower

Offthebeach's picture

Yeah, but what price can you put on smug virtue signaling?

A Tesla way trumps a beat up old 240 with a faded "Free Tibet" bumper sticker

Moe Hamhead's picture

Count the phones you have in your cabinet with worthless batteries.  Now count the laptops in the bottom of your closet.  OK, now how about that old kindle that needs charging after ten minutes.  You're going to need a bigger garage for the five year old Teslas you can't drive more than 20 miles.

DCVoyeur's picture

Mr empty head electric cars have a charge recharge cycle with 10 years at 80% efficency.  So stop spreading lie.

hooligan2009's picture

wow... teslas weight two tonnes? in my younger days i drove a full steel bodied porsche 911 S and that only weighed one tonne.

teslas aren't cars they are self proeplling batteries.

what happens to batteries when they die - do they convert back to fossils?

electric cars need to weigh 0.5 tonnes at most, that is ridiculous - any accident at speed would feel like being t-boned by a dump truck - i bet the death rates for victims of tesla smashes are multiples higher - what's the insurance on these "incredible bulk" duracell bunnies?

Eyes Opened's picture

Yep...

Plastic-moulded monocoque body and a bank of light SuperCaps for power storage....

Light weight = lower energy requirements & less mass in accidents. ..(notwithstanding the weight of "other" vehicles, airbag tech helps here)

No un-recyclible lithium mammoths...

MEFOBILLS's picture

Tesla's do well in crash testing, and with autopilot avoid wrecks.  

Let's not skew data with confirmation bias.  The facts can speak for themselves.

https://www.youtube.com/watch?v=9_Abd7EiSBs

haruspicio's picture

I do wish the media would stop referring to Teslas as 'zero emissions'. It takes emmissions to make the steel, it takes emissions to make the electricity that fuels the Tesla. The batteries have a limited life and will need expensive new ones leading to more emissions and a pollution problem of what to do with the old batteries which cintain all sorts of nasties. 

 

THEY ARE NOT ZERO EMISSIONS.

julian_n's picture

The only true zero emissions is walking - even a bike takes electricty to manufacture.

Problem is, I fart when I walk - so I guess even that is not true zero emission.

 

Kina's picture

put a hose from your butt to mouth, can recycle gasses then.

Zero emissions.  Except when you dies, unless you go to Siberia and get frozen.

waspwench's picture

+ 1,000,000 upvotes

ELECTRIC CARS ARE NOT ZERO EMISSION VEHICLES.

shutterbug's picture

All this bullshit about electric cars being more eco friendly... they are NOT ...

when you compare them in total context, so from fabrication, all maintenance and the needed power generation in the whole link...

which is the only good way to compare them.

fattail's picture

They aren't eco friendly.  But the oil producers in the middle east are going to go bankrupt once the price of oil goes back to $9, so that is a huge positive.  I would buy an electric vehicle just to stick it to those bastards.

BrownCoat's picture

Ethanol was a bust. I'm hoping for a breakthrough on a synthetic carbon chain liquid fuel to replace gasoline.

MEFOBILLS's picture

Ethanol at current oil prices is a bust.  A liquid fuel like ethanol could be used, so there is really no energy shortage.  As long as the sun shines, its energy is converted to carbon, or in the case of solar cells, photons become electrons.

dogismycopilot's picture

Interesting. Because of Norway's tax laws, it is much cheaper to buy a Tesla fully loaded than say an Audi A6....this is going to fuck Musk in Norway very hard. 

erk's picture

Sounds reasonable, cars over 2,000kg are absurd.

The Telsla Model 3 is 1,610kg.

 

 

MEFOBILLS's picture

Tesla builds heavy cars because of range anxiety.  It is a market driven decision.  In reality, most users travel maybe 50 miles per workday.  Charging overnight means that the battery could be 1/4 the size of today.  But, the average person wants to drive long distance.

Having available gasoline cars to rent for long distance travel would be a way around the problem.  Or, the batteries can be standardized and easily swapped, using a lease system.  

If a human is an independent economic actor, then they are more likely to say f-you to their illuminist overlords.  In other words, economic independence has electricity in the future, in the form of solar roofs, and electric cars.

farmboy's picture

Netherlands same with large tax subsidy on EV thanks to no brain leftist politicians.

Eyes Opened's picture

SUBSIDIES....

DESTROY....

INNOVATION....

DCVoyeur's picture

Perhaps the federal government should stop subsidizing oil extraction?  

Subsidies are in place to support the adoption of new technologies.  AND solar and wind is now cheaper than coal in many areas of the US and the solar prices are falling. 

The US walked away from solar which will be the largest industry in the world in another few years.  We  gave away the lead to the Chinese cause a Republican administration controlled by the oil companies killed incentives in the seventies and eighties.  

 

We did and are doing the same with Molten Salt Reactors. Look up LFTR and ask why billion are not being spent to bring a production model to market.

Weisshorn's picture

"Sales of electric cars and hybrids accounted for 60 per cent of new vehicle sales in Norway last month, fuelled by extensive subsidies in taxes, tolls and parking fees."

Norwegian men are totally cucked, Brievik was the last one with a pair of real gonads.

DCVoyeur's picture

YESS SUR REE BOB only real mens drive huge SUVs.  Them other guys are pussies.    You must drive a hummer and have no money in the bank for retirement causin your a REAL man. 

 

What a FOOL

Last of the Middle Class's picture

Don't they know Tesla doesn't pay taxes!!! Damn guys, listen up here. Their economic model is to spend you tax money! All the while making you feel warm, fuzzy and green on the inside while hiding the massive open pit lithium mines and the massive energy needed to produce those fire traps in another country far far away. . .

DCVoyeur's picture

And you dont pay attention fool.  What alt right propogand outlet did you get this BS from??

Swamp Yankee's picture

"The carbon emissions generated by the electricity required for electric vehicles are greater than those saved by cutting out direct vehicle emissions.”

 

And the laws of thermodynamics said "DUH!"

 

'Comon vikings, U R supposed to be smarter than this!

 

Long on Denmark 4 a change.

TacticalTrading's picture

This is Bullish for Tesla as are all articles written about Tesla, because people are that stupid.

Call this a Tax Subsidy Claw Back 

The perils of succes at the expense of the tax paying public

Payback is a bitch

surf@jm's picture

Tessla and Musk are an Obama era crony green corporation......

like Obamacare, if you took away the taxpayer teat, it would all dry up and blow away.....

DCVoyeur's picture

The good news is that obese people like you will die early and so will your ignorance.

TrueNorth0691's picture

I am still unclear on the data. I have, for many years, argued that electric vehicles are only as clean as the source of electricity. This I have always been certain of and I am very clear on this point. The problem is getting clear information on the the indirect sources of emissions depending on the  1) electricity generation mix where the car is being used and 2) the energy mix and emissions going into making the car and it's components, including the batteries. This article is only marginally helpful because there will still be a major difference between sources for electricity that are, for example, 75% carbon free vs 100% coal. And for some there will be a difference, not in carbon emission, but risk, of say nuclear vs. hydro. I am sure the info exists, but there are "info wars": one side are global warming zealots blinded to facts by zealotry for a cause, and the other are zealots who either don't care if there is warming or refuse to believe there are anthropomorphic issues for a variety of reasons including political ideology and economic. Both sides main goal is to win an arguement not to get the facts on the table as part of smart decision making.

DCVoyeur's picture

Dag nabit those "warming zealots"  concerned about the world warming 7 C and every coastal city being flooded and 1/2 or more of the worlds species dying.  Bunch of pansies cause real men smoke and give lead toys to their children and drink water down stream from a chemical plant.  That way they can have more intelligent children like themselves. 

Wow the world id using only nuclear and coal as a choice for electricity.  Just ignore that 25% compounded growth rate for solar and wind.  Cause we all know that compounding is of no use.  

 

Those new battery technologies being pursued by 20 different companies with a doubling or more in capacity and costs that are 1/4 of the existing batteries will have no impact.  Tye chicken or the egg so lets kill the chicken as fast as possible using your logic

RationalExuberance's picture

ZH portfolio: long bitcoin, short TSLA. 

Madison's_Ghost's picture

Here's a "Bomb' for you , Norway - All of your electric cars are powered by Oil.

 

Have a nice day!

warsev's picture

Electric cars don't run on electricity. They run on the source of energy used to make electricity. The problem of CO2 from fossil fuels is a short term issue that pales in comparison to the thousands of tons of high level nuclear waste sitting in pools that nobody knows what to do with and that will have to be kept safe for tens of thousands of years.

MEFOBILLS's picture

that pales in comparison to the thousands of tons of high level nuclear waste sitting in pools that nobody knows what to do with and that will have to be kept safe for tens of thousands of years.

http://www.arcnuclear.com/arc-100-reactor

 

Re-use of Nuclear Waste
The ARC-100 can be used to recycle traditional nuclear waste and generate energy, burn or transform plutonium that could be used for weapons and eliminate the need to bury or store large quantities of nuclear waste.

The problem with nuclear is economic:  Human's take short cuts to then make more profit.  Diesel generators are below Tsuanmi level, etc.  The U.S. Navy has a pretty good track record handling nuclear power.   

LeftandRightareWrong's picture

"electricity is needed to power them"

These geniuses just discovered Physics and the Laws of Thermodynamics? People let them manage their money?

DCVoyeur's picture

Well well if Morgan Stanley says it causes more carbon then it must.  Stanley is such an expert on the environment that is why they are known as the environmental publication.