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Transportation

Norway Is Running Out of Gas-Guzzling Cars To Tax (wired.com) 290

Posted by msmash from the moving-forward dept.
When it comes to sales of electric cars, Norway is in a league of its own. In September, battery-powered electric vehicles accounted for 77.5 percent of all new cars sold. That figure makes Norway a world leader by a long way -- leapfrogging over the UK, where 15 percent of new car sales were electric as of October, and the US, where that number is just 2.6 percent. From a report: Norway's electric dream has been credited to a series of tax breaks and other financial carrots that mean brands like Tesla can compete on price with combustion engines. But these incentives -- and their success -- have created a unique predicament: Norway is running out of dirty cars to tax.

It's quite a big problem. The previous government -- a center-right coalition that was replaced by a center-left minority government in October -- estimated that the popularity of EVs was creating a 19.2 billion Norwegian krone ($2.32 billion) hole in the country's annual revenue. While EVs might be great news for the environment, their rapid success in Norway is now forcing some serious fiscal consternation. The road to this point has been long -- and offers lessons to other countries racing to ditch gas-guzzling combustion engines. In Norway, the most progressive electric vehicle policies in the world started with a pop group, an environmentalist, and a small red Fiat Panda. It was 1988 when activist Frederic Hauge, along with fellow green campaigners from the band A-ha, traveled to the Swiss city of Bern, where they found the red Fiat. A previous owner had converted the car to run off a lead battery, and the group planned to use the vehicle to persuade the Norwegian government to encourage electric vehicle uptake.

The Fiat became the centerpiece of a nine-year campaign in which Hauge and members of A-ha drove the car on Norway's toll roads without paying. The fines racked up, and when they remained unpaid, the vehicle would be impounded and sold at auction, where Hauge would buy it back and repeat the cycle of toll dodging. A-ha's celebrity members added glitz to the crusade against toll fees for EVs and Hauge -- who has led an environmental group called Bellona since 1986 -- courted press attention to demand incentives for electric cars. "By being a positive vigilante, he made the media and also the politicians aware of the electric car," says Oyvind Solberg Thorsen, director of Norway's Road Traffic Information Council, which publishes statistics about the country's roads and vehicles.
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Norway Is Running Out of Gas-Guzzling Cars To Tax More

Norway Is Running Out of Gas-Guzzling Cars To Tax

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  • OK.... (Score:5, Insightful)

    by timeOday ( 582209 ) on Monday November 22, 2021 @12:28PM (#62010437)
    This is like complaining about loss of employment in the medical field due to the polio vaccine.

    Yeah, some adjustments will be needed in road taxes everywhere.

    • Yeah, some adjustments will be needed in road taxes everywhere.

      Last I checked, electric vehicles still use roads. Countries can put a yearly use fee on all the electric vehicles in place of a gas tax.

      • Last I checked they also use...electricity. Guess what next will be taxed.

        • Last I checked they also use...electricity. Guess what next will be taxed.

          Taxes are already included in electricity costs (at least in the U.S.) so all that would happen is either an additional tax would be added or an existing tax would be increased.

        • Re: (Score:2)

          by bjwest ( 14070 )

          Last I checked they also use...electricity. Guess what next will be taxed.

          It would be easy to tax electricity at the public charging stations, but not so easy at the home chargers unless they add an additional meter at the charge port, but then that wouldn't take into account the chargers that plug into a normal 110 or 220 outlet. I think the best method would be to add a mileage based tax to the yearly registration fees.

    • Re: (Score:2, Interesting)

      by pz ( 113803 )

      From the standpoint of what is best for the governed rather than the government, the most obvious thing to do is to eliminate the tax levied against gasoline, and reinstate it against tires instead, with appropriate scaling and adjustment so that road upkeep can continue to be funded.

      Forget this privacy-violating tracking of who drives where --- just tax tires. If you must, use annual odometer readings with a multiplicative factor for weight class of vehicle, but both of those factors are automatically tak

      • People will drive till the tires fall off, encouraging bad safety.

        • Re: (Score:2)

          by AmiMoJo ( 196126 )

          They have regular inspections over there. You have to have your car checked for roadworthiness every year or two.

          They note the odometer reading at that time so tax could be levied on distance traveled.

      • Re: OK.... (Score:5, Insightful)

        by backslashdot ( 95548 ) on Monday November 22, 2021 @12:49PM (#62010515)

        A tax on tires will suck. Tires are replaced every few years, therefore the tax would need to be hundreds of dollars. That will piss off a lot of people and encourage people to drive around dangerously on bald tires or even steal/smuggle tires.

        • A tax on tires will suck. Tires are replaced every few years, therefore the tax would need to be hundreds of dollars. That will piss off a lot of people and encourage people to drive around dangerously on bald tires or even steal/smuggle tires.

          That would only happen if the tax is levied as a sales tax. It could be implemented as an incremental tax applicable when a car is registered in its most simple form.

          But even then, that seems complicated. It doesn't need to suck, and it can be made very simple, but it does seem to me like the wrong tool/thing to tax.

          A better way to legitimately and soundly fill in public coffers is to tax road usage (tolls), an additional increment on sales taxes (over a large, country-wide number of transactions, a 0.1

          • Or fees on power bills for each registered EV owned or operated in a household or business.

            Now that would kill EV adoption.
            Let's say I have an EV and I use electric heating at home. This proposal would make me pay more for heating and I would become really interested in replacing the EV with a gasoline-burning car to lower my electricity bill.

          • Re: OK.... (Score:4, Interesting)

            by tlhIngan ( 30335 ) <slashdot&worf,net> on Monday November 22, 2021 @03:42PM (#62011057)

            Or just tax your mileage. I mean, every year you just report what the odometer says and you get charged a road tax based on how much you drive. The tax rate can vary by vehicle - drive an SUV and your taxes per mile would be higher than someone driving an EV.

            Make it so you buy it in blocks - if you know the average person drives 12,000 miles a year, then you bill the average. If they drive less you give them a refund and if they drive more you charge them what their new average is. If you scrap the vehicle then you probably want to make sure that you get a receipt for the mileage so you can claim back the unused road tax.

        • Re: (Score:2)

          by NFN_NLN ( 633283 )

          It's comical that the discussion has basically devolved into a conversation about taxing. As if the government needed any help in taxing citizens. Hahaha.

      • Re:OK.... (Score:5, Interesting)

        by Anonymous Coward on Monday November 22, 2021 @01:02PM (#62010555)

        Much better plan:

        Keep the tax on gasoline, and raise it so that it's paying for 100% of the roads until all cars are electric. (Yes, that means the end will come more quickly once most of the cars have been switched, since nobody is going to be paying a billion dollar per gallon tax on gasoline.)

        Then stop taxing cars and move entirely to a heavily progressive income and wealth tax system. Don't tax tires, don't tax electricity, don't tax miles driven. Just tax money and property.

        And make it truly progressive. Start with a 1% income tax for people making 200% of poverty (below that you pay no tax). Gradually increase the marginal tax, until it hits 100% at $10 million/year, every penny over that is tax. Tax capital gains as what they are, income. Tax wealth over $500 million at 100%, just a strict cutoff so that there can be no billionaires. Tax inheritance over $10 million at 100%. Adjust for inflation as necessary.

      • Better for a couple of reasons would be to simply increase the price of vehicle registration/license plates, perhaps have it paid monthly so people aren't hit by once a year huge bills.

        One reason being that that way you aren't putting the burden of collecting taxes on private businesses that sell tires which would cause some shrinkage due to administration and the gov't is already setup to collect these fees.

        Another being as others said, you'd get some people driving on unsafe tires to avoid the taxes.

        • Better for a couple of reasons would be to simply increase the price of vehicle registration/license plates, perhaps have it paid monthly so people aren't hit by once a year huge bills.

          That is unfair to people that do not drive much and, hence, do not contribute nearly as much to road wear as those that drive many miles.

          And no, I will not stand for govt. run, managed and tracked mandatory GPS in my car either.

          *BUZZ*.

          Gotta come up with something else.

          But ever since I work from home, hell I don't fill my

          • Re: (Score:2)

            by tragedy ( 27079 )

            That is unfair to people that do not drive much and, hence, do not contribute nearly as much to road wear as those that drive many miles.

            Yeah, but the whole thing is unfair if you base it on road wear. The amount of wear and tear caused to a road by a passenger vehicle relative to an 18-wheeler is so insignificant that it shouldn't really be counted. If things were "fair" that way then the tax would basically be paid by those large commercial vehicles. Ultimately the cost would be passed on to the products that everyone buys though. It all really depends on how you measure "fair".

            • Yeah, but the whole thing is unfair if you base it on road wear. The amount of wear and tear caused to a road by a passenger vehicle relative to an 18-wheeler is so insignificant that it shouldn't really be counted. If things were "fair" that way then the tax would basically be paid by those large commercial vehicles. Ultimately the cost would be passed on to the products that everyone buys though. It all really depends on how you measure "fair".

              Well, right now, I believe that in fact is mostly the case.

              T

              • Re: (Score:2)

                by jbengt ( 874751 )

                The amount of wear and tear caused to a road by a passenger vehicle relative to an 18-wheeler is so insignificant that it shouldn't really be counted. If things were "fair" that way then the tax would basically be paid by those large commercial vehicles.

                Those big trucks use a LOT more fuel than private automobiles and since fuel taxes pay most of the road bills, they do pay more their fair share for "road wear".

                The amount of extra fuel used by those big trucks is not proportional to their share of damage they do to the roads. The rule of thumb is that road damage is proportional to the fourth power of axle weight, which means that cars do almost negligible damage to the roads and the heavy trucks do almost all of the damage. Based on fuel taxes alone, they would pay far less than their fair share for road wear. (they have other fees and taxes, too, but those still don't add up to a "fair share of road wear")

              • Those big trucks use a LOT more fuel than private automobiles and since fuel taxes pay most of the road bills, they do pay more their fair share for "road wear".

                They use more fuel, but they cause a lot more wear. For example, see https://www.gao.gov/products/1... [gao.gov] - I'm pretty sure the truck isn't using 9,600 times more fuel than the automobiles.

                a five-axle, tractor-trailer loaded to the 80,000-pound Federal limit, has the same impact on an interstate highway as 9,600 automobiles.

              • The big trucks use less than an order of magnitude more fuel, but do more than two orders of magnitude more damage. They are obviously not paying their fair share.

          • How about everytime you get on the road, it's a toll road and you "get" to pay a toll for every segment you drive on. I bet that's unacceptable to you too.

            • That would make congestions worse, since stopping, paying and starting wastes time.

              • Cashless tolling (no booths, no stopping) has been a thing for a while now. I live in the northeast US, in an area with lots of toll roads, and they are rapidly being converted to cashless. In areas where tolls are being proposed, adding booths is not on the table.

              • since stopping, paying and starting wastes time.

                Are you familiar with the concept of electronic tolling? No need to stop and pay, even if you don't have a transponder -- license plate readers can be used and the bills sent to the registered owner of the vehicle.

      • I don't think road taxes in and of themselves have any real justification (other than pushing EVs for the moment) but you want to keep gas and purchase tax approximately equal to bordering countries to avoid problems in an unified market. They'll just get tires over the border.

        • Roads needs to be maintained.
          Road taxes pay for that.
          We could just privatize all the roads and then you pay for road maintenance through incessant tolls.

          That was sarcasm, BTW

          TANSTAAFL

      • Comment removed based on user account deletion

      • > From the standpoint of what is best for the governed rather than the government, the most obvious thing to do is to eliminate the tax levied against gasoline

        No, the best thing would be to increase the taxes levied on gasoline, because it's absolutely to the benefit of the governed to stop using fossil fuels.

        As someone else mentioned, since tires are not purchased regularly, the taxes required for an equivalent to the existing fuel tax would be absurd. Figure you get a new set of tires every 50,000 mile

        • Re: (Score:2)

          by Serzen ( 675979 )
          Also a New Yorker. They already record my odometer reading when I get my annual inspection, and I have long anticipated that the goal was specifically to issue a tax based on miles driven/year. And since our inspection certificate is also tied to our vehicle registration, which also records the vehicle's weight, I'd not be surprised to see it snuck into registration fees. Given that it's NY, I'd be more shocked if it wasn't billed as both part of the inspection AND the registration.

          • The problem with putting it on the registration fee is who pays for it - if I drive 15K miles in a year, and sell it to you, are you liable for paying 15K miles worth of taxes when you register it?

            Assuming 1:1 replacement of NY gasoline taxes with mileage at a nominal 30MPG, 15K miles works out to roughly $200.

            Registration costs up to about $70 for a 2-ton vehicle, plus $75 if it's your first registration (plates + title). Plus $32.50 every other year if it has an engine larger than 4cyl.... then sales tax

            • The problem with putting it on the registration fee is who pays for it - if I drive 15K miles in a year, and sell it to you, are you liable for paying 15K miles worth of taxes when you register it?

              Don't the buyer and seller have to report the mileage when transferring ownership? Or, you could institute a system whereby the taxes must be paid within a month prior to any transfer of ownership.

      • Re:OK.... (Score:5, Insightful)

        by swillden ( 191260 ) <shawn-ds@willden.org> on Monday November 22, 2021 @02:13PM (#62010787) Journal

        Forget this privacy-violating tracking of who drives where --- just tax tires. If you must, use annual odometer readings with a multiplicative factor for weight class of vehicle, but both of those factors are automatically taken care of if you just tax tires instead. Just tax tires.

        Others have pointed out the obvious problems with taxing tires, I just want to point out that mileage tracking isn't privacy-invasive if you only track and tax heavy commercial vehicles. This is easily justifiable if you figure taxes should be apportioned to the vehlcles by the amount of road damage they do. Road damage by vehicles is proportional to the fourth power of vehicle weight, so light passenger vehicles should only be paying <<1% of the maintenance. Given that, it's reasonable to simply ignore light passenger vehicles and collect all of the necessary revenue from heavy commercial vehicles -- and their driving is already heavily tracked for other reasons, so it creates no (new) privacy concerns.

        Of course, doing this will have the effect of making shipping much more expensive, but I'd argue that's a benefit, not a cost. Right now we're giving the trucking industry a massive hidden subsidy by providing all of their roads. This is an economic inefficiency that, like all broad economic inefficiencies, ultimately makes everything more expensive for all of us. If highway freight had to bear the full cost of the road maintenance, we would reduce our use of trucks and transition more freight to rail, which is far more cost-effective per ton-mile due to lower rolling resistance and lower wind resistance.

        Eventually this might push enough freight off the roads that it again creates the problem that we're trying to solve: Not enough people paying taxes to maintain the roads. Even though eliminating most of the heavy trucks will dramatically reduce road damage and the resulting maintenance costs (even more if we ban heavy trucking from some routes entirely, allowing us to build lighter, cheaper roads), the costs won't go away completely and the legitimate share that accrues to light passenger vehicles would rise, requiring us to figure out how to tax light vehicles again. But by then many other things will likely have changed, so I think it makes sense to solve the immediate problems (disappearing gasoline taxes and the economic distortion of trucking subsidies), and then re-examine the issue when it returns.

      • Re: (Score:2)

        by PPH ( 736903 )

        just tax tires

        Pardon me while I plan my bi-annual vacation road trip to Spain. I'll be staying at the Barcelona hotel just down the road from Confortauto Pneumatics Montigala.

      • Re: (Score:2)

        by pesho ( 843750 )

        I would imagine that if your goal is to support road maintenance, than you would need to tax the weight of the vehicle, the number of axles, and the type of suspension. Then I would look if someone (say Norway) hasn't come up with similar idea [skatteetaten.no]. This is not entirely fair, as owning a vehicle does not mean you drive it. Some of the consumption tax on electricity can be redirected towards road maintenance.

        Taxing tires creates incentive for having unsafe vehicles on the road. Gasoline tax does not do that, as

      • The NHTSA recommends that tires be replaced every six years and depending on how much you drive, they can last longer. The sticker shock of years worth of road-taxes at once would be enormous and it wouldn't work so well as it would just be a strong incentive to drive a few hours to a neighboring country for your tires.

      • A lot of this was from toll roads. And the lobbying was to allow EVs to skip paying the toll. But if there's going to be 80% EVs then there's a distinct lack of tolls... They probably need to slowly reinstate the tolls, while still keeping a differential between the classes of vehicles.

    • There's no need for road taxes, just needless complexity. Driving doesn't need to and shouldn't be treated as a sin, just pay it out of the default taxation (which should be property tax with primary residence exemption).

      • A portion IS paid out of the general fund, but only a portion... And that portion is often used to blackmail states and localities into implementing programs that are sometimes unwanted and/or unrelated.

        Take your pick

    • The author doesn't understand how percentages work.

    • Re: (Score:2)

      by tomhath ( 637240 )
      Norway is the sixth largest exporter of oil in the world. They have plenty of money.

  • What they lose in Gas taxes (Score:5, Insightful)

    by MarkWegman ( 2553338 ) on Monday November 22, 2021 @12:32PM (#62010451)
    They probably make up for in health costs. Norway has universal health care. ICE cars emit pollution that's expensive to treat when it gets into a human body. They've saved that expense and it may go a long way to compensate for their lost revenue.
  • Just keep selling it to all those countries who can't afford to move to electric.

  • Not an issue (Score:5, Insightful)

    by Midnight Thunder ( 17205 ) on Monday November 22, 2021 @12:56PM (#62010543) Homepage Journal

    Knowing it is called a "tax break", it should be clear that this will expire at some point. Once the tax break has achieved its intended goal, then taxes will be adjusted as necessary. In terms of electric vehicles it is increasing the tax, while still making its petroleum based equivalent less appealing.

    We hate taxes, but we want services, infrastructure and a state that takes care of us, so of course we will need to pay the piper at some point. These luxuries still need to be paid for somehow. At the same time don't get me started on how the side effects of the suburban dream are creating deficits for cities, due to the imbalance of maintenance costs versus tax revenue.

  • The EU is beginning in July next year for all new cars.

  • Norway has spent decades pulling in obscene amounts of tax revenue from various sources including citizenry and business, with the goal of building a massive rainy-day fund (per article below may be $1T or more by now). Losing $2.32B in revenue is a drop in the bucket compared to the rest of their economy, and even that is a drop in the bucket compared to how much money they have in the bank.

    https://www.bbc.com/news/world-europe-24049876

  • ....did someone ultimately think what, that the tax needs that gas taxes filled* were going to go AWAY?

    When that /method/ is no longer tenable for raising the funds needed to maintain roads, bridges, and infrastructure (and it honestly wasn't bad as a scalable user-fee in that role), they will come up with another /method/ no longer counting gallons but, perhaps, miles regardless of power source.

    *and lets remember, none of that $ was going to environmental mitigation, ie the 'cost' to the world due to ICE v

    • Re: (Score:2)

      by PPH ( 736903 )

      and lets remember, none of that $ was going to environmental mitigation

      None ever does on the government side. Carbon credit trading schemes work because people who offset their carbon use get a financial benefit by selling the credits to those who can't economically offset. But governments just shovel it down a rat-hole with no accountability.

  • Where is Norway going to get the energy for BEVs? (Score:3)

    by MacMann ( 7518492 ) on Monday November 22, 2021 @02:54PM (#62010917)

    I'd like to know how Norway plans to provide the energy needed for this transition from fossil fuels to electric. I expect someone is wanting to replay with, "It's Norway you moron, they will use hydro!" The hydro capacity in existence is largely already being claimed to keep the lights on, adding BEVs means they need to add more electricity capacity, and just how much untapped hydro capacity can be left in a nation that has built coal power plants, windmills? That tells me that they are running out of cheap hydro, other sources are costing them less or they would not have built them.

    I have my suspicions on where Norway will have to go to get safe, reliable, abundant, low cost, low CO2 energy. I'll see if others are thinking what I'm thinking. Can someone post some expectation on where Norway will get this energy? And perhaps some links to support why? I expect nobody to provide links to sources because it seems most people on Slashdot lack the mental capacity to do a web search and post the results for everyone. Why would I need someone to post a link if I can do the search myself? Because I need to know which of the millions of possible links that they found most convincing, that way I can have an idea on what they are talking about. Posting numbers is helpful, necessary even, to make one's case but links to reputable sources would be far more compelling so that everyone knows they didn't just pull something out of their ass.

    So, tell me where you think Norway will get this energy, then I'll try to come back and compare notes.

    • Re: (Score:2)

      by Striek ( 1811980 )

      I expect nobody to provide links to sources because it seems most people on Slashdot lack the mental capacity to do a web search and post the results for everyone.

      I notice you provided no links - presumably because you lack the mental capacity to do a web search and post the results for everyone.

      Just sayin'...

    • Re:Where is Norway going to get the energy for BEV (Score:5, Informative)

      by Guspaz ( 556486 ) on Monday November 22, 2021 @03:39PM (#62011045)

      Norway has around 34 TWh of remaining hydro potential. If every passenger car in Norway was an EV and consumed 282 kWh per month (estimate from Finland), they would consume 9.5 TWh per year. This is less power than Norway exports every year due to excess production. Norway has plenty of power.

      Total number of cars: https://www.statista.com/stati... [statista.com]
      Estimated power consumption per car: https://www.virta.global/blog/... [www.virta.global]
      Remaining hydro potential: https://www.regjeringen.no/glo... [regjeringen.no]
      Annual electricity exports: https://www.statista.com/stati... [statista.com]

    • Re: (Score:3, Informative)

      by angel'o'sphere ( 80593 )

      The hydro capacity in existence is largely already being claimed to keep the lights on
      No it is not.

      You are so stupid it is beyond believe.

      Hint: get a damn map.

      Hint: check who was the biggest power exporter during 2020/2021 Covid crisis.

      Sorry to tell you again: you are so stupid and ignorant it hurts reading the second or third line of every of your posts.

      • I'm not going to waste my time on a comment that posts no links to support their claims. I'll post links when you do.

  • they are/were used for anything and everything. How about deciding what services are offered and balance the budget with the proper amount of tax. Can we stop pitting one citizen against another. Everyone benefits form roads. From infants to the old and dying. To say that drivers benefit and others don't is just plain convoluted. The whole point of gasoline taxes was/is to discourage pollution.

  • A drop in the bucket to Norway (Score:5, Informative)

    by Guspaz ( 556486 ) on Monday November 22, 2021 @03:27PM (#62011015)

    Norway has for decades been dumping all the revenues from their oil and gas industry into a sovereign wealth fund that is now worth around $1.4 trillion. It owns around 1.4% of all listed companies worldwide, and produces 6.6% returns per year on average. In 2019 alone, it had $192 billion USD in returns. I think Norway can handle losing $2-3 billion in gasoline car taxes.

  • Sacramento wants to solve the problem of EV's not paying a gas tax by putting GPS trackers in them to charge a distance tax. This makes sense in some ways as the gas tax covers road maintenance and signs. But the legislature are such pin heads that they keep trying to apply the GPS to gas cars too, in order to collect double tax. But not apply it to commercial trucking, which are the bigger contributor to road wear.

    I think it will be difficult to find a way to tax EVs that is both fair and doesn't invade pr

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