the three reasons behind the explosion in electric car sales in Norway
Europe’s largest gas producer and champion of carbon-free mobility worldwide. Here is a nice list of achievements for Norway. By 2022, almost 80% of new cars registered will be electric, according to figures from the Road Traffic Information Council published on Tuesday. The country, the world champion in zero-emission cars, broke its own record set in 2021 (64.5%). Result: today, one in five cars on Norwegian roads is fully electric, another world record.
For example, a performance not unlike that observed in France, which has only 13% of electric vehicles in their fleet of new vehicles registered in 2022. But then, what is Norway’s secret? And why has France failed to follow its example?
Also read: In Norway, 80% of new cars are electric, in France 13%
Strong tax incentives
The first explanation for the success of Norwegians converting to all-electric comes from the decision of successive governments to heavily subsidize the purchase of electric vehicles. Norway has also set a very ambitious goal: that all its new cars will be zero emissions (electric or hydrogen) from 2025, i.e. 10 years ahead of the goals set by the European Union. To meet this challenge, the country has doubled the incentives to drive electric cars: exemption from all taxes, including VAT, reduced or even free rates for urban ferry tolls and parking in public car park. Electric car drivers have even been able to drive in bus lanes for years to further entice Norwegians towards zero-emission vehicles. As a result, in 2022, the shortfall in tax revenue for the Norwegian state is estimated at nearly 40 billion kroner (3.8 billion euros). “The sums at stake are greater than in France “said Mikaël Le Mouëllic, associate director at Boston Consulting Group and specialist in the automotive sector. In comparison, in 2020, the National Federation of Transport User Associations (Fnaut) estimates the amount paid by the French State for aid for the purchase of an electric vehicle at 700 million euros.
However, this policy has been slow to roll out in car purchases. Because it took almost ten years for the share of electric vehicles in the Norwegian car fleet to increase from 0 to 10% in March 2020. When this period of slow adoption passed, things suddenly accelerated. The share of electricity in the circulation of vehicles increased from 10 to 20% between 2020 and 2023. As a reminder, this proportion barely reached 1% in France in October 2021 according to the Ministry of Transport. ” They had economic consistency for 20 years, tax exemptions at charging stations, advantages on the highway. It was this consistency over time that had such a powerful effect », Estimates Guillaume Crunelle, consultant at Deloitte, specialist in the automotive sector.
And all these years, this very aggressive policy has met with almost no resistance since then “The country has no thermal automobile heritage to defend “, added the expert. On the contrary, France, like many European countries, has not been able to implement a policy as aggressive as the Nordic countries for fear of seeing its national manufacturers destabilized and forced to close the thermal car factories and lay off a large number of employees.
An affluent population that can afford new electric cars
A second explanation for this Norwegian success in the transition to all-electric can be found in the purchasing power of the Nordic inhabitants. ” It is a country with a large income. GDP per capita in Norway is 80,000 dollars when it is 35,000 dollars in France “remembers Guillaume Crunelle. Better purchasing power that allows many Norwegians to invest in a new and electric car, generally more expensive than a second-hand thermal car.
A purchasing power that is also reflected in Nordic motorists’ choice of vehicles. 12.2% of the total sales of new passenger cars in the country will be Tesla in 2022. High-end and expensive cars (more than 50,000 euros) that notably allow motorists to travel long distances in the country of 385,000 km2.
Also read: Volkswagen Taigo: like the end of the thermal reign
A simpler network of charging stations in Norway
The possibility of being able to travel the country without the risk of losing electricity is also seen as a third argument that won over the population.
” In Norway, you can cross the whole country at once with a car with 350 km of autonomy, while in France you have to recharge 2 or 3 times to do Paris Marseille “, study by Mikäel Le Mouëllic.
Convenience for motorists highlighted by the good density of charging stations in the country. Norway has 17,000 terminals for 5.5 million inhabitants compared to 77,000 terminals for 67 million inhabitants in France. But above all it is the arrangement of these terminals that reassures the Norwegians. ” In the south where most of the population lives, people charge their cars at home. But two-thirds of the north of the country is well covered by terminals, to meet the needs of travelers “, refers to the director associated with BCG.
The good network of these terminals, difficult to reach in France, finally convinced the Scandinavians.
Norway focuses on small cars
After converting its population to all-electric, the Norwegian government now wants to encourage them to buy small cars, which produce less pollution. So, since January 1, the VAT exemption (at a rate of 25%) when acquiring a new electric vehicle is only valid within the purchase price limit of 500,000 kroner. (46,000 euros), sums above this ceiling, for expensive and large vehicles, subject to tax. Finally, the tax on new cars has also been changed to take into account their weight and also applies to electric models.