Pure electric cars and hybrids, running on both batteries and combustion engines, accounted for 52% of all new car sales. This represented a significant increase of 12 p.p., compared to the 40%, recorded in 2016. Norway managed to reach this record due to a set of generous subsidies, thus becoming a leading country in the transition to sustainable mobility.
Norway’s approach includes exempting new electric cars from almost all taxes, while granting perks such as subsidised parking, recharging and use of toll roads, ferries and tunnels.
The country also generates most of its electricity from hydro power, so electrifying vehicles contributes to reducing air pollution and climate change.
International Energy Agency recognition
Norway’s leading position is additionally acclaimed by the International Energy Agency (IEA), which considers it as far ahead of countries like the Netherlands, Sweden, China, France and U.K. in electric car sales.
Based on IEA’s data, which excludes hybrid cars with only a small electric motor that cannot be plugged in, electric car sales in Norway increased to 39% in 2017, from 29% in 2016.
Leading car models sold in 2017 were Volkswagen’s Golf, BMW’s i3, Toyota’s Rav4 and Tesla’s Model X. Among these models, only Tesla is a pure electric, while the others have both electric and hybrid versions. Hence, Norway is becoming “a role model for how electric mobility can be promoted through smart incentives”, according to BMW.
An example of Norway’s incentives is the significantly decreased taxes on imported electric vehicles. A Volkswagen e-Golf electric car can be bought for 262,000 crowns ($32,300) in Norway, slightly above the import price of 260,000. A gasoline-powered Golf, on the other hand, imported at 180,000 crowns, can be purchased for 298,000 after including VAT, carbon tax and another tax related to the vehicle’s weight.
Meanwhile, the high prices of electric cars, limited ranges between recharging and long charging times in most other countries, besides the U.K, California and the Netherlands discourage many buyers from opting for electric cars.
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Zero emissions goal
Previously in 2017, Norway’s parliament also set a non-binding goal to sell exclusively zero-emissions cars by 2025. Countries like France and U.K. also plan to ban sales of ICE cars by 2040, while nations like Germany and Poland are preparing for a gradual phasing in.
Electric cars are widely accepted among Norway’s population of 5.3 million people. Sales of diesel cars declined mostly in 2017, dropping from 31% in 2016, to 23%. This was the result of measures to promote electrification and discourage diesel cars sales by implementing higher road tolls.
Norway’s unique measures are affordable due to the country’s high revenues from oil and gas production, that have created the world’s biggest sovereign wealth fund, worth $1 trillion. Nonetheless, the incentives for electric vehicles still drain Norway’s budget, in spite of its wealth advantage.