The Effect of Tax Exemption on the Demand for Electric Vehicles: The Case of Tesla in Norway

Abstract

Using the data of Norwegian automobile market, where electric vehicles have gained much popularity, estimated is the demand model of passenger vehicles with a focus on the consumer preference for each fuel type. The result of the estimation is then applied to derive the new equilibrium price of each product for the prediction of the counterfactual sales of electric vehicles, as the exempted tax is put back into the budgetary consideration of consumers.