Electric Mobility: Norway Races Ahead

Electric vehicles took center stage at this year’s Geneva Motor Show which ends on Sunday.

Mnet 207560 Electric Car Stock

Electric vehicles took center stage at this year’s Geneva Motor Show which ends on Sunday. Facing tougher emissions standards in Europe, countless manufacturers showed off their latest vision of a battery-powered future, with both concept cars and market-ready models featuring heavily.

Despite robust growth and record levels of electric vehicle sales in most of the largest automobile markets, combustion engines still dominate passenger car sales around the world. The share of plug-in electric vehicles in total passenger car and light vehicle sales/registrations was below five percent in all but four markets in 2018, with Norway the most notable exception at 49 percent. With Iceland, Sweden and Finland also featuring in the top 5 countries with the highest share of EVs, the Nordics are adopting electric mobility quicker than any other part of the world. China, which is by far the largest market for electric cars in terms of unit sales, ranks sixth behind Finland with a share of 4.44 percent.

While Norway’s policy measures (e.g. tax exemptions, toll exemptions and other incentives) did prove highly effective in promoting electric cars, the Norwegian model cannot be easily transferred to other countries. First and foremost, the country imposes hefty vehicle import duties and car registration taxes, which makes cars significantly more expensive than say in the United States. By waiving these duties for electric vehicles, Norway is effectively subsidizing EV purchases at a level that a larger country such as the U.S. couldn’t afford. Secondly, Norway is a very wealthy country (ironically thanks to its oil reserves) with a high level of income. According to Norway's national statistical institute, the country’s median household income after taxes was nearly $60,000 in 2017, which is roughly in line with the United States but more than twice as high as the EU average.

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