Tesla May Lose Key Norway Advantage As Government Proposes To Cut EV Tax Benefits - Tesla (NASDAQ:TSLA)

Core Insights - Norwegian authorities have proposed revisions to incentives for electric vehicles (EVs), which may negatively impact Tesla's sales in Europe as the company faces declining sales in the region [1][5]. Group 1: EV Market Developments in Norway - Battery Electric Vehicles (BEVs) accounted for over 98% of total vehicle sales in Norway during September, leading authorities to declare that the goal of transitioning to fully-electric vehicles has been achieved [2]. - The Finance Minister of Norway, Jens Stoltenberg, indicated that it is now appropriate to phase out the benefits previously offered to EVs [2]. Group 2: Changes in Taxation and Incentives - Norway had previously exempted EVs from taxes that apply to internal combustion engine (ICE) vehicles but has now introduced a 25% Value-Added Tax (VAT) for EVs priced above 500,000 Kroner (approximately $49,500) [3]. - A revised proposal suggests lowering the cap for VAT exemption to under 300,000 Kroner (roughly $29,700), which could significantly impact the pricing of high-end EVs [3]. Group 3: Impact on Tesla - Tesla's Model Y, priced at 389,990 Kroner (approximately $38,600), and Model 3, priced at 324,990 Kroner (approximately $32,200), will no longer qualify for the incentives under the new proposal [4]. - The reduction in incentives could adversely affect Tesla's sales in Norway, a market where the company has been established for over 12 years and was the first country outside North America to introduce the Model S [5]. Group 4: Production Updates - Tesla's Gigafactory in Texas has recently reached a production milestone of 500,000 units, primarily producing the Model Y and the Cybertruck [6]. - The Gigafactory in Germany is also set to increase production, responding to positive feedback and rising demand from its markets [6].