Norway has become a model for the transition to electric cars. Official government data shows that by 2024, almost nine out of every ten cars sold will be electric. According to the International Energy Agency, by 2023, (the latest year for which data is available) the share of electric vehicles worldwide was just 18%.
The Scandinavian country has made a remarkable commitment to combating climate change, driven by strong government policies, solid infrastructure and solid public support.
Norway aims to have all passenger cars sold with zero emissions by the end of 2025, putting it a full decade ahead of the EU, of which it is not a member.
Wealth, small population and strong incentives
Norway’s wealth and size have undoubtedly played a role in the success of electric mobility. The country has a population of 5.5 million and is one of the richest countries in the world, thanks to its significant oil reserves – the largest in Europe after Russia. However, these factors do not fully explain the remarkable progress made.
Robbie Andrew, a senior research fellow at the CICERO Center for International Climate Research in Oslo, believes that Norway's decade-long commitment to the transition to electromobility is a decisive factor. The expert recalls that Norway has been working on the creation of electric vehicles since the 1990s, and the lack of a powerful lobby in the local automotive industry has facilitated these efforts.
Although the first attempts to produce electric vehicles had limited commercial success - only a few thousand cars were sold - they raised public awareness, which quickly adopted the new trend. This, in turn, paved the way for the widespread distribution of electric cars from global manufacturers such as Tesla and Volkswagen.
Tax breaks as a powerful factor
Favourable government policies have undoubtedly helped the smooth transition to electric vehicles. Norway does not impose VAT or import duties on electric vehicles, which can account for between a third and almost half of the price of a new car.
Electric vehicles are also exempt from road and parking fees. They can even use bus lanes in the capital Oslo and the countryside. Higher-income groups have benefited the most from the tax breaks, and a newly purchased electric car was initially a second family car.
After almost reaching its goal of a complete switch to electric cars, the government has recently withdrawn some of these incentives. For example, VAT was partially refunded for large and luxury electric cars that cost more than 500,000 kroner (42,500 euros). But car owners in lower income groups are still benefiting from other available incentives, as well as the falling prices of electric cars.
Bjorne Grimsrud, director of the Oslo-based Transport Research Centre TOI, believes that government incentives are very expensive for the country, but it can afford them because it is very rich and also very keen to become climate neutral by 2050.
Other countries are also cutting subsidies
Other countries, including Germany, have been accused of failing to meet climate targets by reducing subsidies for new electric vehicles long before the target is reached. Earlier this week, the Federal Office of Transport (KBA) announced that in 2024 In Germany, Europe's largest car market, 27.4% fewer electric vehicles were registered than a year earlier.
It is clear that Germany, a major producer of electric vehicles, will have to reconsider its subsidy and tax policy if it wants to achieve its goal of having 15 million electric vehicles on the country's roads by 2030.
For Norway, home charging stations are a priority
Another advantage of Norway is its electricity grid, which is one of the greenest and most stable in the world. More than 90% of Norway's electricity is produced by hydroelectric power plants, which usually provide a surplus of energy, making it easy to charge electric cars at home.
About three-quarters of electric car owners live in single-family homes, making it easier to install home charging stations. A report by London-based consultancy LCP found that 82% of electric cars in Norway are charged at home. Lance Noel of the Center for Sustainable Energy in San Diego believes that the ability to charge cars at home, rather than at a public charging station, has played a significant role in the adoption of electric cars in Norway. In this regard, he advises other countries to also emphasize this type of charging and not prioritize faster public charging infrastructure.
Trump is unlikely to repeat Norway's success
Many Americans fear that Donald Trump will deviate from policies aimed at promoting electromobility.
The newly elected Republican president has promised to end federal tax breaks of up to $7,500 for the purchase of electric vehicles, as well as impose new tariffs on foreign automakers, which could lead to higher prices. Several US states also plan to reduce local incentives for electric vehicles. This is despite the forecast by Cox Automotive that the share of electric vehicles in the US will reach only 8% last year.
In recent months, the US has also seen a slowdown in electric vehicle sales due to problems with accessibility and a lack of charging infrastructure. Last week, Tesla reported its first sales decline in more than a decade.