Despite being one of the richest oil-rich countries in the world, Norway’s love affair with the electric car is well documented. The Scandinavian nation is one of the world’s largest and most influential electric vehicle markets. Last year, over 54% of new car registrations were electric, and an additional 27% were plug-in hybrid (PHEV) models.
Norway is also seeking to ban the sale of petrol and diesel cars by 2025, five years earlier than the UK. But this kind of mass adoption doesn’t happen overnight; Norway has championed the electric car for almost three decades now.
Indeed, incentives for electric vehicle buyers in Norway have shamed the recently reduced UK government subsidy for plug-in cars. In addition to being exempt from the country’s 25 percent VAT rate, electric cars in Norway are exempt from road tax, while drivers also benefit from reduced road and ferry tolls, as well as discounted parking. Electric vehicle owners can even use dedicated bus lanes without fear of retaliation.
These far-reaching incentives will continue at least until the end of this year, when they will be “reviewed and adjusted in line with market developments”. The VAT exemption has been approved by the European Free Trade Association (ESA) Supervisory Authority until the end of 2022.
But how does a country with a daily oil surplus of nearly two million barrels find itself in such a forward-thinking and eco-conscious position?
It all happened quite quickly, as Christina Bu, general secretary of the Norwegian Electric Vehicle Association, tells us, comparing the progress in her home country with that on the other side of the world. “In Australia right now there is a lot of debate about electric vehicles. There are a lot of myths and a lot of anti-VE political communication because the coal lobby is very strong, ”she said.
“It could have happened in Norway too, but it’s not really the case. In the 90s nobody really cared, and suddenly around 2010-2011 something started to happen. Those who could have been negative didn’t really see it happening, the transition was so quick.
In addition, the majority of Norway’s electricity needs can be met by renewable energy – almost all of its domestic electricity comes from hydropower – so its dependence on oil to power its national grid is almost nil. Contrary to popular belief, the money it makes from fossil fuels has little to do with subsidizing zero-emission transportation solutions or strengthening public charging infrastructure.
“The rest of the world thinks ‘Norway can afford it because it has all this oil revenue,’” Bu tells us. “But the point is, we’ve had very high car taxes for years. Norway has state budget income that other countries do not. What Norway has done, however, is not to tax some cars – and that’s electric vehicles. So these are not really subsidies, it is a tax exemption, ”she adds.
The body Bu works for was founded in 1995, when Norway was building its own urban electric vehicles; the Kewet (recently Buddy) and TH! NK City. Early adopters loved them, but adoption was low and the market didn’t really change until cars like the Mitsubishi i-MiEV and Nissan Leaf brought the automobile to the masses in the late 1980s. 2000s and early 2010s.
The Norwegian Electric Vehicle Association now has more than 90,000 paying members and for more than two decades has participated in major discussions regarding the deployment and taxation of electric vehicles in Norway, defending electric mobility for the benefit of the climate and the environment. .
“In Norway you were able to buy an electric car for about the same price [as a petrol or diesel car]Bu tells us. That’s a comparison clearly stated on the association’s website, where the purchase price of a gasoline-powered VW Golf is compared to that of the now-discontinued all-electric e-Golf.
Although the base import price is over 10,000 euros (around £ 8,600) more, the electric model is cheaper to buy when you take into account the various taxes applied to combustion engine cars. internal (ICE). ICE drivers in Norway pay separate taxes on CO2 and NOx, plus a “weight tax” and VAT; combined, these fees add nearly $ 12,000 to the cost of a modest family hatch.
It’s savings like this that have helped EVs to dominate Norway’s top-selling car list in recent years. Four of the five biggest sellers in 2020 were fully electric; the Audi e-tron SUV finished first, ahead of the Tesla Model 3, Volkswagen ID.3 and Nissan Leaf in second, third and fourth. The gasoline, diesel and plug-in hybrid Golf was fifth.
List prices and tax breaks are only part of the country’s success. Take into account the average price of household electricity of just NKr 0.87 (7.3 pence) per kilowatt hour, compared to a price of NOK 17.23 (£ 1.46 / liter) for gasoline, and the savings become even clearer.
Assuming the gasoline-powered Golf did 50 mpg, you would pay around £ 1,327 for fuel over an average year or 10,000 miles. If you charge the EV at home and use an average of 4.5 mi / kWh, you’ll only spend £ 162 to cover the same distance and time period.
Top up the amount Norwegian EV drivers will save on parking and tolls, and the real price makes an electric car a no-brainer. Norway is also working to strengthen its public charging infrastructure: over the past decade, the number of electric vehicles per charger has fallen from over 160 to less than 120.
Despite the UK government’s grant of £ 2,500 for electric vehicles costing less than £ 35,000, electric vehicles in Britain are generally more expensive than equivalent petrol or diesel cars. Additionally, the cost of electricity is higher than in Norway (around 17.2 p / kWh in the UK), which means the savings are less substantial if you choose to use an electric vehicle here.
Bu believes other markets will soon see the adoption of electric vehicles overtake Norway’s. “The mentality is now completely different from what it was then,” she tells us. “It’s not like the Norwegians are more environmentally friendly. [Electric car uptake] will perform even faster in other markets.
Norway is not the only country to offer incentives to push new car buyers to buy electric or hybrid cars. Italy and Spain have programs offering up to € 6,000 for the cost of a new low-emission or zero-emission car when an older model is traded in and scrapped. Germany has teamed up with manufacturers to cut prices for electric cars by as much as 9,000 euros. All things considered, the UK’s incentives seem out of step with its bold EV ambitions.
|Volkswagen e-Golf||Volkswagen Golf|
|Import price||€ 33,037||€ 22,046|
|CO2 tax (113g / km)||N / A||€ 4,348|
|NOx tax||N / A||206 €|
|Weight tax||N / A||€ 1,715|
|Disposal costs||€ 249||€ 249|
|25 percent VAT||N / A||5 512 €|
|Retail price||€ 33,286 (£ 28,427)||€ 34,076 (£ 29,103)|
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