Norway again sets record for electric car sales

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Almost one in three cars sold in Norway last year was purely electric, setting a new world record for the country as it moves toward phasing out sales of fossil fuel vehicles by 2025.

The record is driven by heavy government support: Norway exempts most taxes on battery driven cars and offers benefits like free parking and charging points to hasten the shift from diesel and petrol driven engines.

The government is due to phase out these perks soon, but only so long as electric cars remain attractive to buy compared with traditional ones.

“It should always be cheaper to have a zero emissions car than a regular car,” Climate and Environment Minister Ola Elvestuen, who helped push through a commitment to have only zero-emissions cars sold in Norway by 2025, told the Associated Press.

It’s a huge reversal for a country that has made its vast fortune exporting oil to the rest of the world. But the country is putting part of that wealth to work in the apparent hope that it can make up for past mistakes.

The electric car-only plan supports Norway’s carbon dioxide reduction targets under the 2015 Paris climate accord, by which nations agreed to develop rules to meet greenhouse gas reduction goals

Øyvind Solberg Thorsen of the Norwegian Road Federation, cautioned against too much enthusiasm over the new electric car figures, remarking to Reuters that two thirds of the cars sold in Norway last year still run on traditional polluting fuels.

For now, however, the government stimulus is hitting a sweet spot. The federation reports that in 2018, 31.2 percent of all cars sold in Norway were electric, up from 20.8 percent last year, and only 5.5 percent in 2013.

These figures soar above other nations. According to the International Energy Association, which uses slightly different criteria, which include hybrids that can be plugged in, Norway’s share of such cars was 39 percent in 2017, far ahead of second placed Iceland with 12 percent, and Sweden as six percent.

Larger countries – and bigger carbon emitters – like China and the United States lag even farther behind on the IEA scale for the same year. In China, electric cars and hybrids accounted for 2.2 percent of all cars sold, followed by the US, with 1.2 percent.

Still, Norway’s electric car figures for 2018 might have been even higher had overall car sales not fallen slightly – down 6.8 percent to 147,929 in total, according to NRF data. The overall dip in car sales, however, is still good news for cutting Norway’s emissions, and seems to suggest that cars run on traditional fuels are becoming less popular.

Indeed, many people are still waiting for electric cars that haven’t been delivered yet. As of October, some 30,000 electric SUVs and sedans produced by Audi and Tesla were on pre-order for Norwegian owners, according to reporting from NRK, the Norwegian public broadcaster.

All of this suggests the government’s plan to stimulate the growth of electric car purchases is coming in on target.

The bonuses for e-car owners are considerable. To stimulate their purchase, Norway waives hefty vehicle import duties and registration and sales taxes. Owners don’t have to pay road tolls, and they get free use of ferries and bus lanes in congested city centers.

But the government has calculated these perks are losing it almost $1 billion a year, and plans to phase them out by 2021, though any road tolls and fees for electric car owners would be limited to half of what gasoline car owners must pay.

Registration tax on new cars in Norway is paid on a sliding scale with a premium for the amount of emissions produced. Minister Elvestuen pledges that the adjustments for e-car incentives will not thwart the 2025 all-electric goal.

“What is important is that our aim is not just to give incentives,” he told the Associated Press. “It is that we are taxing emissions from regular cars.”

The question is: can Norway’s enthusiasm for electric cars last? Part of the answer lies in where these cars get parked. At present, one of the bigger barriers to expanding e-car sales is the lack of places to speedily recharge them.

Lasse Fridstroem, an economist with the Institute of Transport Economics, told Reuters that too many Norwegian drivers don’t have access to private parking places, and thus are unable to establish a charge point at home.

At the same time, even fast battery charging points are still slow compared with traditional filling stations. This makes a big difference on Norway’s remote mountain roads, where private energy firms say rapid chargers don’t make economic sense – even when the government helps underwrite them.

 

Charles Digges

charles@bellona.no