The Effects of Tax Exemption on the Sale of Electric Vehicles in Norway

Abstract

This paper estimates a structural demand model on a large data set, and performs counterfactuals that show that if electric vehicles were treated similarly to combustion engine vehicles in the Norwegian car tax system, their overall market share would be around 4-5 percent, as opposed to the actual 28 percent, and Teslas sales would be reduced by a factor of almost 100, from 2,772 units to 29 units per year.