Eco-sustainability, electrification and incentives. The Norwegian model

Approximately 70 percent of cars on the road in Norway are all-electric. That’s the latest record-breaking statistic involving Norway and electric vehicles (EVs), as the Scandinavian nation looks to halt sales of fossil fuel cars by 2025.

The numbers could be even higher, but thousands of Norwegians find themselves on long waiting lists as dealers struggle to import enough vehicles. According to industry data, 11,518 electric vehicles were registered in Norway in the first quarter of 2020, twice as many as the previous year. The new Tesla Model 3, Nissan Leaf and Volkswagen Golf account for the majority of registrations.

Although unit sales in China and the United States are much higher, it is Norway that remains the country with more EVs on the roads as a proportion of total vehicles than anywhere else in the world. Headlines in recent years have left many people wondering why a small Scandinavian nation with a population of just over 5 million is leading the electric vehicle revolution. The answer is simple: favorable environmental math and financial incentives.

Despite its reputation as a major player in the petroleum industry, nearly all of Norway’s domestic energy comes from hydropower. Because much of the country’s electricity is renewable, the switch to electric vehicles is a much greener equation than it would be for countries whose electricity comes from highly polluting coal-fired power plants. To make the switch happen, the Norwegian government has invested heavily in financial incentives and charging infrastructure.

The big changes began to come at the turn of the millennium, when the road tax was lowered, toll road and public ferry fees were removed, and free parking was offered in some municipal parking lots. All of which were advantages for those who were heading toward the purchase of an electric vehicle.

Norway’s 25 percent sales tax was eliminated on the purchase of new electric vehicles in 2001, and drivers have been able to use bus lanes since 2005. Although the country’s extensive charging infrastructure was started with government money, private companies are now taking over operations, and there has been a great deal of interest from overseas.

The government reached its goal of 50,000 zero-emission vehicles on the road three years ahead of schedule. Despite this, the current center-right coalition has kept most of the incentives in place through at least 2021.

While the political will may be environmental, many Norwegians have benefited financially. Buying a high-end electric vehicle, with government subsidies and reduced costs, would make an endothermic powered car more expensive.

Norwegian cities such as Bergen have suffered so much from pollution that drastic measures have been introduced to limit the amount of cars by restricting the use of fossil fuel cars every other day and based on the license plate of the vehicle.

Norway’s willingness to pursue this path looks set to continue beyond cars. Avinor, the state-owned operator of most of the country’s airports, has announced its desire to use electric-powered aircraft on short-haul flights by 2030. Meanwhile, Scandinavian Airlines is collaborating with Airbus on hybrid research.

In addition to the skies, electrification is also being tested in the seas, where a fully electric passenger ship is already operating on the Nærøyfjord, following the desire for the Norwegian fjords to become zero-emission zones by 2026.

In the rest of Europe, it remains to be seen how these models can be replicated and, above all, how to push the economy forward in a virtuous way.