Electric cars to become up to NOK 37,500 more expensive. Norway cuts incentives for drivers
For years, Norway encouraged people to buy electric cars. Now it is gradually taking away their tax privileges. From 2027, VAT is set to apply to a larger portion of the price of a new car. For buyers, this could mean an additional NOK 37,500.
The change would take effect on 1 January 2027
Fot. Norweskie Stowarzyszenie Samochodów Elektrycznych
In its draft budget for 2027, the government proposes lowering the VAT exemption threshold from NOK 300,000 to NOK 150,000. Above this amount, a tax of 25% is charged. The change would take effect on 1 January 2027. For now, it is part of the draft budget, which must pass through parliament.
How much more will a buyer pay?
Let us take a car costing NOK 400,000 before VAT. Here is a comparison of the tax alone:
The difference is NOK 37,500. The calculation assumes that the car's pre-tax price remains unchanged and does not include other charges. The final showroom price will also depend on the seller's offer.
| Calculation | In 2026 | Under the proposal for 2027 |
|---|---|---|
| Portion of the price subject to VAT | NOK 100,000 | NOK 250,000 |
| VAT payable | NOK 25,000 | NOK 62,500 |
| Price including VAT | NOK 425,000 | NOK 462,500 |
First incentives, now higher taxes
This is another stage in scaling back the incentive. In 2025, the VAT exemption covered the first NOK 500,000 of a car's price. In 2026, the threshold fell to NOK 300,000. The plan agreed during budget negotiations in December 2025 provides for a further reduction to NOK 150,000 in 2027 and the complete abolition of the exemption in 2028.
The government explains that electric cars have come to dominate new-car sales and no longer need such extensive support. Reducing the incentives is intended to free up money for other purposes. The drivers' organisation NAF points to the situation of families: more expensive new cars may make it harder for people with smaller budgets to switch to electric vehicles.
What do you think: is it time to end the incentives, or is Norway raising the cost of buying electric cars too quickly? Sources: Norway's Ministry of Finance, Norsk elbilforening, NAF. Own calculations.
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The government explains that electric cars have come to dominate new-car sales and no longer need such extensive support. Reducing the incentives is intended to free up money for other purposes. The drivers' organisation NAF points to the situation of families: more expensive new cars may make it harder for people with smaller budgets to switch to electric vehicles.
What do you think: is it time to end the incentives, or is Norway raising the cost of buying electric cars too quickly? Sources: Norway's Ministry of Finance, Norsk elbilforening, NAF. Own calculations.
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Multinor - translations of documents required to register vehicles from Norway - get a quote
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