For many years Norway has been in the forefront of promoting electromobility. Today, Norway has the world’s highest per capita fleet of plug-in electric cars. In 2021, 1.6% of the cars in the EU fleet were plug-in electric vehicles, whereas their share was 21% in Norway. Part of the successful market take-up rate is due to wide-ranging tax exemptions. Increasing plug-in electric vehicles numbers causes tax revenue losses, making exemptions unsustainable. Norway has the ambitious goal that from 2025, all newly registered cars shall be zero-emission vehicles. Keeping tax exemptions in place might be crucial for this goal. The objective of this paper is to provide information to solve this dilemma. Tax exemption reduction and abolition paths which offer a compromise between minimal effects on the development of zero-emission vehicles and tax revenues have been identified. An updated and re-calibrated version of the stock-flow-model SERAPIS was used to simulate and assess different scenarios. Results show that a controlled tax phase-in allows Norway to reach its environmental targets of 100% zero emission vehicles by 2025 and a 55% decrease of CO2-emissions in 2030 relative to 2005 while simultaneously increasing public revenues significantly.
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