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Three quarters of passenger cars sold in Norway in February were EVs, but why are they so popular?

Tags: #ev-sales

February might seem like an awfully long time ago given what has been going on in the past four weeks, but during the month EVs once again grew in popularity across the continent. One country has stood out, and continues to stand out in terms of the level of adoption though: Norway.

During February, 75 per cent of all passenger cars sold in Norway were EVs, according to figures from JATO Dynamics. This is a staggering figure compared to everywhere else in the world, where anything over a 10 per cent market share is good going. Across Europe as a whole, EVs made up 13 per cent of total registrations during February – up 92 per cent when compared to 2019.

Norway's EV sales figures could be higher still if it wasn't for the fact that demand often outstrips supply. Waiting lists are common as manufacturers struggle to fulfil orders, with the Tesla Model 3, Mk7 e-Golf and Nissan LEAF among the most popular cars there. It's a fair assumption that the current global Coronavirus situation, which has led to the shut-down of numerous car manufacturing plants, will only increase those waiting lists.

Behind Norway is Sweden at 33 per cent of passenger car registrations, followed by Finland at 31 per cent. But what makes Norway – a country whose entire population is significantly less than that of London – stand head and shoulders above every other nation on earth?

Government incentives

There are several major push-pull factors in play in Norway. Perhaps one of the biggest push factors is the fact that the Norwegian government is aiming to stop sales of petrol and diesel cars by 2025 – a whole decade before the UK plans to follow suit. But Norway couldn't simply pull the rug out from under petrol and diesel car buyers' feet – it had to introduce some strong pull factors too. These came in the form of financial incentives.

Even 30 years ago, Norway introduced an exemption from purchase/import taxes on EVs which was a significant step for a country where import taxes are lofty, to say the least. Road tax on EVs was abolished in 1996 and in the 20 years between 1997 and 2017 as the market share grew, EVs were exempt from paying road and ferry tolls – a big deal in a country with a lot of toll roads and ferries!

Since then, and as the market share for EVs has matured, some of these incentives have been relaxed, but they still offer many very good reasons why Norwegians remain so committed to sustainable personal mobility. Today, all EVs are exempt from the 25 per cent VAT rate on purchase and now pay a maximum of 50 per cent of the total cost of a toll road, ferry ticket or parking. They can even use bus lanes wherever they are available.

As well as making it cheaper and more convenient to buy and own an electric car, the government has made it more expensive to own a petrol one. A simple example is the relative cost of the previous generation (Mk7) Volkswagen Golf vs. the equivalent e-Golf. On the road the petrol car would cost 34,076 euros after taxes, but thanks to the huge tax savings on EVs, the electric version worked out at 33,286 euros.  

When you lump in the everyday discounts and benefits, it has been a no-brainer for Norwegians to go EV for years.

Charging

Alongside its raft of incentives to buy an EV in the first place, Norway has been active in supporting the installation of an effective charging infrastructure. By the end of 2018 the country had well over 10,000 chargers, with the biggest increase coming from fast and ultra-fast chargers. Those chargers are distributed strategically along major routes, so despite Norway's rugged landscape you're unlikely to be more than 30 miles from a charging point – something that the UK has only just announced as a target for the next five years.

Norway has also been innovative in how it is deploying charging. For example, it is already installing wireless charging in Oslo to help the city reach its goal of having the world's first zero-emissions taxi fleet by 2023. Additionally, the country is a guinea pig for testing a future without petrol stations, with Canadian firm, Couche-Tard replacing fuel pumps at its Circle K petrol stations with electric chargers – again, something that we in the UK are only just moving towards thanks to schemes like that which Shell is undertaking.

Energy sources

Alongside all of the incentives and infrastructure innovations, a key reason why EVs make so much sense in Norway is the country's almost total reliance on renewable energy. It has 20 per cent of Europe's entire hydropower capacity and 50 per cent of the continent's reservoirs created for energy generation.

In total, 95 per cent of Norway's power is generated by the 1600 hydropower plants across the country. A further 3.5 per cent comes from wind power, and is due to grow in the coming years. The remaining 1.5 per cent comes from other sources such as biomass, and to a lesser extent, natural gas.

Given the cumulative positive effect of a clean grid powering clean vehicles, and you have a perfect situation for mass EV adoption where any carbon debt stored within the car during manufacture is paid back rapidly.

Could other countries emulate Norway?

Some potentially could, but Norway benefits from unique circumstances which make mass EV adoption realistic; a low population, prosperity, zero-emissions energy grid and a 'Nordic model' of governance which favours capitalist economics with socialist values making it possible for the government to put legislation in place.

It's feasible that some Alpine countries (e.g. Austria, Switzerland, Slovenia) could emulate Norway in a relatively like-for-like fashion, but again, their circumstances and governance are slightly different. Larger countries, and especially those with much bigger populations, will struggle to implement infrastructure that is as effective as Norway's, and the raft of incentives simply won't make financial sense in many places.

However, this shouldn't stop nations looking to Norway as a bastion of what can be done if the willingness is there. We certainly look forward to a time when 75 per cent of new car sales are EVs with the resulting benefits to air quality and lower emissions.

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