Posted by on October 13, 2017 6:45 am
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Categories: Business Carbon Emissions China Economy Electric car Electric vehicles Elon Musk Environment Gambling Government incentives for plug-in electric vehicles Labour Party Morgan Stanley Norway Norwegian Electric Vehicle Association Plug-in electric vehicles in Norway Sustainable transport Technology Transport Zero-emissions vehicle

Elon Musk can’t seem to catch a break lately with cash burn rates surging to new highs every quarter and embarrassing rumors suggesting that the company, one that was supposed to be the most technologically sophisticated auto manufacturer in the world, has been making parts by hand to try to get Model 3s on the road.

Now, after being one of the largest contributors to Musk’s taxpayer-funded enrichment scheme for years, the country of Norway may have just decided that enough is enough with legislators considering a new tax for buyers of electric cars that weigh over two tons…which, as of now, would pretty much only include Teslas.  As the Financial Times notes today, the proposal could tack on a massively punitive $10,500 tax to the purchase of every Tesla in Norway.

Norway is proposing a “Tesla tax” that would hit owners of the heaviest electric cars in a move that critics say will undermine the Scandinavian country’s standing as a pioneer of zero-emission vehicles.

Sales of electric cars and hybrids accounted for 60 per cent of new vehicle sales in Norway last month, fuelled by extensive subsidies in taxes, tolls and parking fees.

But the centre-right minority government in Oslo is now proposing a one-off tax on all electric cars that weigh more than two tonnes — something that at present would predominantly target Teslas and potentially add up to NKr82,800 ($10,500) to the cost of buying one.

“This is a tax bomb. This is gambling with the whole electric vehicle market. It is a bad signal to send and will affect consumers,” Christina Bu, general secretary of the Norwegian Electric Vehicle Association, told the Financial Times.

To date, Norway has been by far the biggest adopter of electric cars and has vowed to sell only zero-emission new vehicles by 2025. But critics argue that their popularity comes down to an extremely generous set of subsidies that can cut the price of the most expensive Teslas by about NKr450,000.

When and how to withdraw those subsidies has sparked a huge political debate. Some Norwegian politicians point out that many of the early adopters of electric cars were rich households buying Teslas. Bus drivers in the richest parts of Oslo complain that bus lanes are clogged with electric cars, which are permitted to use them.

Before the tax proposal on Thursday, Andreas Halse, environmental spokesman in Oslo for the opposition Labour party, said although electric cars generated no emissions they contributed significantly to congestion in the capital as well as damaging roads because of their weight. “It is not just about emissions; there are other considerations, too, such as the use of cars versus public transport,” he added.

The new tax proposals would add at least NKr36,000 and as much as NKr82,800 to the cost of the Tesla Model X, a sport utility vehicle popular in Norway because of its ability to tow trailers, a feature appreciated by families who own mountain cabins.

Of course, as Morgan Stanley recently pointed out, Teslas and other EVs have recently been found to actually generate more CO2 than they save in many countries around the world.  As a stark reminder to our left-leaning political elites who created these companies with massive taxpayer funded subsidies, Morgan Stanley pointed out that while Teslas don’t burn gasoline they do have to be charged using electricity generated by coal and other fossil fuels.

This is where Tesla, along with China’s Guoxuan High-Tech fall short.

“Whilst the electric vehicles and lithium batteries manufactured by these two companies do indeed help to reduce direct CO2 emissions from vehicles, electricity is needed to power them,” Morgan Stanley wrote. “And with their primary markets still largely weighted towards fossil-fuel power (72% in the U.S. and 75% in China) the CO2 emissions from this electricity generation are still material.”

In other words, “the carbon emissions generated by the electricity required for electric vehicles are greater than those saved by cutting out direct vehicle emissions.”

Morgan Stanley calculated that an investment of $1 million in Canadian Solar results in nearly 15,300 metric tons of carbon dioxide being saved every year. For Tesla, such an investment adds nearly one-third of a metric ton of CO2.

Could it be that Tesla might one day have to compete in a world without the benefit of massive taxpayer-funded subsidies?  One can dream…

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