Norway’s passenger car and light duty electric vehicle (PC & LDV EV) sales dropped 71% in January 2026 compared to the opening month of 2025 to just over 2,800 units. The drop came as a result of changes in VAT tax exemptions for battery electric vehicles (BEVs), with the threshold for exemption dropping. Previously just the purchase price over NOK500,000 ($52,700) was subject to a 25% VAT rate, but from 1 January 2026, that threshold dropped to NOK300,000 ($31,600).

How has Norway’s tax landscape for EVs changed?

PC & LDV EV sales dropped 92% month-on-month following a strong pre-buying effect as consumers anticipated the tightening of VAT exemptions for BEVs. This is Norway’s largest month-on-month drop in EV sales since January 2023 when sales contracted 95% to less than 1,800 units due to the initial introduction of VAT for EVs priced over NOK500,000 ($52,700), as well as a weight tax for BEVs on all excess weight over 500kg.

Over the past three years, Norway’s top ten best selling EVs all surpass the new NOK300,000 ($31,600) price threshold. However, the top ten also contained models that were subject to VAT as they were priced over the NOK500,000 ($52,700) threshold, such as the ID.Buzz and ID.7. The reduced threshold does not spell the end of VAT exemption for EVs in Norway, with the base prices of the MG-4 and Renault 5 falling under the new upper limit.

How does this impact Norway’s transition to EVs?

Norway has reached penetration rates high enough to mean that its EV market is the majority of its total vehicle market on a monthly basis. While there was a significant drop in unit sales in January, the market’s penetration rate was 84%[MB3.1][DB3.2]. Which is slightly below its 2025 penetration rate but still above that of any preceding year.

While Norway’s penetration will continue to lead both in Europe and globally, its unit sales for both its total vehicle market and EV market will see a contraction in 2026 relative to 2025. This contraction is likely to persist into 2027, with the Norwegian government proposing to end the VAT exemption enjoyed by BEVs entirely from 1 January 2027.

This data came from Benchmark's EV & Battery Service, for more information get in touch with the team using the form below: