OSLO (Reuters) -- Norway is reviewing its subsidies for electric vehicles after generous government incentives made the country the biggest user of EVs in the world, hurting state revenues.
Norway registered its 50,000th electric car on Monday, almost three years earlier than expected thanks to government schemes that have cut taxes and provided a range of benefits, including an exemption from tolls and parking fees, free recharging stations and the use of bus lanes.
A fifth of all new cars sold in Norway have been electric so far this year and Norway, with just 5.1 million people, accounted for a third of all European EV sales last year, official data showed.
"Our goal is to present a final agreement on the review of the future of automotive and fuel taxes," the country's finance ministry said. "The outcome of the review will be announced in the revised budget (due in May)."
Tesla sales
The current incentive scheme has been in place since 2012, but it came under criticism last year when sales of the Tesla Model S sedan soared and the budget lost 3 to 4 billion crowns ($380 million to $510 million) in expected revenue.
Teslas S sedans start at about $70,000 and retailing for about $100,000 with extras. The cars accounted for three percent of sales last year, prompting calls to end subsidies for wealthy buyers.
Sales of the Nissan Leaf and Volkswagen e-Golf have also risen.
The Norwegian Electric Car Association argues that the benefits need to be maintained longer as only two percent of the cars on the road are electric, still a relatively small figure even if Norway leads the rest of the world by a wide margin.
Norway generates nearly 100 percent of its electricity from hydropower so the shift to battery-powered cars results in a net reduction in greenhouse gas emissions -- part of the country's plans to reduce emissions by at least 40 percent by 2030 compared to the 1990 level.
