The Norwegian success story is first and foremost due to a substantial package of incentives developed to promote zero-emission vehicles into the market. The incentives have been gradually introduced by different governments and broad coalitions of parties since the early 1990s to speed up the transition. Learn more about the Norwegian electric vehicle success story.
In 2020, Norwegians actually bought more electric cars than any other types of cars altogether. A country far north, stretching way above the Arctic Circle, with long driving distances, rugged mountains and a very cold climate is not the most likely place to start a transportation revolution, but electric vehicles (EVs) are suddenly the new normal here. How did it happen?
Local governments allowed to decide incentives
Since 2017 it has been up to the local governments to decide the incentives regarding access to bus lanes and free municipal parking. The Parliament has agreed on implementing a 50 % rule, which means that counties and municipalities cannot charge more than 50 % of the price for fossil fuel cars on ferries, public parking and toll roads.
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80% of new cars sold this year will probably be EVs
“In 2020, 54% of the new cars that were sold in Norway were EVs. And it is important to note that when we talk about EVs, we mean fully electric cars. Plug-in hybrids aren’t part of that number. If we included those like they do in many other countries, we would get to a whopping 74 per cent!” says Christina Bu, secretary general of the Norwegian Electric Vehicle Association.
Almost 65% of new passenger cars sold in Norway in 2021 were electric; in addition, 22% were plug-in hybrids. EVs are purchased all over the country. It took only 10 years to move from 1% to 65%, and this year the number will probably pass 80%. The Norwegian Parliament has decided on a national goal that all new cars sold by 2025 should be zero-emission (electric or hydrogen).
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“But the maybe strongest incentive is that we heavily tax the purchase of polluting petrol and diesel cars”, Christina Bu explains. Most cars are purchased secondhand, and people in the secondhand market are dependent on the choices made by new-car buyers. The government therefore taxes the sales of new polluting cars heavily but does not tax EVs at all, making EVs, which are more expensive because of their production costs, a competitive and appealing option.
The VAT exemption for zero-emission vehicles in Norway has been approved by the EFTA Surveillance Authority (ESA) until the end of this year.
Electric cars are cool
Another important aspect is that electric cars are cool! They don’t smell bad. They are silent. And you can drive them for several hundred kilometers before you need to charge them. Not that charging is a problem in Norway – there are more than 16,000 charging stations, including 3,300 fast chargers, all over the country. So, no need for range anxiety.
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Economical beneficial to choose zero and low emission cars
The overall signal from the majority of political parties is that it should always be economically beneficial to choose zero and low emission cars over high emission cars. This is obtained with «the polluter pays principle» in the car tax system. High taxes for high emission cars and lower taxes for low and zero-emission cars. Introducing taxes on polluting cars can finance incentives for zero-emission cars without any loss in revenues.
“Even in the northernmost parts of Northern Norway – an area with huge distances, more reindeer than people, and really low temperatures in the wintertime – you can easily get around with an EV”, Christina Bu claims.
The Norwegian Electric Vehicle Success Story, written by Tor Kjolberg