NOR­WAY SEES BOOM IN ELEC­TRIC CARS, FU­ELED BY THE GOV­ERN­MENT

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A silent rev­o­lu­tion has trans­formed driv­ing in Nor­way.

Eerily quiet ve­hi­cles are ubiq­ui­tous on the fjord­side roads and moun­tain passes of this wealthy Euro­pean na­tion of 5.3 mil­lion. Some 30 per­cent of all new cars sport plug-in ca­bles rather than gaso­line tanks, com­pared with 2 per­cent across Europe over­all and 1-2 per­cent in the U.S.

As coun­tries around the world — in­clud­ing China, the world’s big­gest auto mar­ket — try to en­cour­age more peo­ple to buy elec­tric cars to fight cli­mate change, Nor­way’s suc­cess has one key driver: the gov­ern­ment. It of­fered big sub­si­dies and perks that it is now due to phase out, 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,” says Cli­mate and En­vi­ron­ment Min­is­ter Ola Elvestuen, who helped push through a com­mit­ment to have only sell zero-emis­sions cars sold in Nor­way by 2025. The plan sup­ports Nor­way’s CO2 re­duc­tion

tar­gets un­der the 2015 Paris cli­mate ac­cord, which na­tions last agreed rig­or­ous rules for to en­sure emis­sions goals are met.

To help sales, the Nor­we­gian gov­ern­ment waived hefty ve­hi­cle im­port du­ties and reg­is­tra­tion and sales taxes for buy­ers of elec­tric cars. Own­ers don’t have to pay road tolls, and get free use of fer­ries and bus lanes in con­gested city cen­ters.

These perks, which are cost­ing the gov­ern­ment al­most $1 bil­lion this year, are be­ing phased out in 2021, though any road tolls and fees would be lim­ited to half of what gaso­line car own­ers must pay. Grad­u­ally, sub­si­dies for elec­tric cars will be re­placed by higher taxes on tra­di­tional cars.

Reg­is­tra­tion tax on new cars is paid on a slid­ing scale with a premium for the amount of emis­sions pro­duced. Elvestuen pledges that the in­cen­tives for elec­tric ve­hi­cles will be ad­justed in such a way that it does not scup­per the 2025 tar­get.

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

Us­ing taxes to en­cour­age con­sumers to shift to cleaner en­ergy can be tricky for a gov­ern­ment — protests erupted in France this au­tumn over a fuel tax that hurt the liveli­hood of poorer fam­i­lies, es­pe­cially in ru­ral ar­eas where driv­ing is of­ten the only means of trans­porta­tion.

In this sense, Nor­way is an out­lier. The coun­try is very wealthy af­ter ex­port­ing for decades the kind of fos­sil fu­els the world is try­ing to wean it­self off of. In­comes are higher than the rest of Europe, as are prices.

Some 36 per­cent of all new cars sold are SUVs, which pro­vide safety in the coun­try’s tough win­ters. Tesla’s SUV, the Model X - the mo­tor of choice for well-to-do en­vi­ron­men­tally-minded Nor­we­gians - costs around 900,000 Nor­we­gian kro­nor ($106,000).

“Buy­ing a Tesla model X is not much more ex­pen­sive than buy­ing a stan­dard premium Volvo be­cause gaso­line cars are taxed heav­ily. That is also the rea­son Tes­las sell well,” says Christina Bu, Gen­eral Sec­re­tary of the Nor­we­gian Elec­tric Ve­hi­cle As­so­ci­a­tion.

The premium gas-pow­ered Volvo XC90 SUV, for ex­am­ple, starts at 919,000 kro­ner ($107,100) in Nor­way com­pared with $47,700 in the U.S.

To date, with its longer bat­tery life, Tesla has dom­i­nated the up­mar­ket fam­ily car space for elec­tric ve­hi­cles, but more premium mar­ques are en­ter­ing the mar­ket, like the Audi Qu­at­tro e-tron. De­mand is still out­strip­ping sup­ply, with Nor­we­gians hav­ing to wait up to a year to get their hands on the steer­ing wheels of their new elec­tric ve­hi­cles.

Nor­way has pledged to re­duce emis­sions of green­house gases by 40 per­cent by 2030, com­pared with 1990 lev­els. The coun­try has work to do: by 2017, emis­sions were up 3 per­cent com­pared to the 1990 base­line. Cut­ting emis­sions from road trans­port will al­low Nor­way to re­duce the amount it has to spend buy­ing up emis­sions cer­tifi­cates from other Euro­pean coun­tries to meet its tar­get. The sav­ings are likely to run into bil­lions, po­ten­tially bal­anc­ing out the cost of sub­si­diz­ing elec­tric cars.

Nor­way is look­ing to China for help in de­vel­op­ing the mar­ket.

China has in­vested heav­ily in elec­tric ve­hi­cles as it looks to meet its own Paris cli­mate ac­cord com­mit­ments, to clean up its chok­ing cities and to get in early in a grow­ing area of man­u­fac­tur­ing. In Oc­to­ber, 6 per­cent of new cars were elec­tric, ac­cord­ing to the China As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers, up al­most 50 per­cent from a year ear­lier. The mar­ket has huge growth po­ten­tial, ex­perts say, and like Nor­way, the mar­ket boom has re­lied on gov­ern­ment in­cen­tives.

The hope in Nor­way is that the sheer size of China’s mar­ket will en­cour­age the in­dus­try to de­velop the tech­nol­ogy more quickly — im­prov­ing bat­tery life, for ex­am­ple — and force down prices.

Ex­perts say the elec­tric ve­hi­cle mar­ket needs to de­velop more for sales to keep grow­ing.

Bat­tery life on smaller ve­hi­cles is slim and the re­sale mar­ket is untested. Fast bat­tery charg­ing points are slow com­pared with gaso­line pumps, and on Nor­way’s of­ten empty moun­tain roads, these points are un­eco­nom­i­cal de­spite gov­ern­ment sub­si­dies for the pri­vate com­pa­nies that set them up.

Even in city cen­ters, con­struc­tion of such points has not kept pace with sales. At one sta­tion in Oslo, a Tesla driver cracks open his lap­top while his car charges. An­other, Ida Vi­hovde, drums her fingers as she waits for a charg­ing sta­tion to free up.

“If the gov­ern­ment put up more of these it would be OK,” she says be­side her elec­tric VW Golf. “Right now there are no more charg­ers so I have to sit and wait.”

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