Popular electric vehicles in Norway include the Think and Buddy, which are both produced by Norwegian car makers, as well as Nissan’s Leaf and Tesla models. An electric vehicle currently fails to turn heads, especially in the nation’s capital of Oslo.
Norway had a fledgling electric car industry of its own years ago. In order to boost sales and reduce emissions, a very generous package of incentives was offered to Norwegians. The most salient and economical one were no taxes. In a country where taxes can double or even triple a car’s purchase price, that’s huge.
Transport Minister Ketil Solvik-Olsen said the original picture of an electric vehicle as being “tiny, kind of plastic cars seating two people, where you would freeze to death during the wintertime.” Therefore, sales were not expected to be brisk in snowy, mountainous Norway.
Parliament decided the tax break would end when the country’s EV total reached 50,000, or in 2017, whichever came first.
Norway’s electric car industry had pretty much fizzled in 2013, but California-based Tesla was cranking them out, kick-starting other major automakers into action. Tax incentives became a lot more alluring.
Norway became the first country last year to ever have an all-electric vehicle top the monthly best-seller list: the Tesla Model S. In October, it was a different all-electric model: the Nissan Leaf.
There are other many incentives to switch to electric: no tolls, free use of the bus lanes, free parking, free ferry rides and free charging at municipal stations. Norwegians with gas-powered cars pay about $9 a gallon to keep them moving.
In just one year, Norway’s EV population doubled to its current total of almost 25,000. A onetime target of 50,000 could be met by the summer of 2015.
EV proponents are ecstatic. Electric cars, they say, are quieter and good for the environment. That’s especially true in Norway where 99 percent of generated electricity comes from clean hydropower.
Could there be a possible fly in the ointment? Bjart Holtsmark, one of the few vocal critics of Norway’s EV policy, has crunched the numbers and figures that Norway is currently subsidizing each Nissan Leaf – about half the EV population – to the tune of $8,000 per year.
In the U.S., by comparison, EV owners are eligible for a one-time federal tax credit of up to $7,500.
Using that $8,000 figure, Holtsmark goes on to calculate that, in terms of its EV policies, Norway is paying $13,500 per ton of CO2 reduction. A ton of CO2 on the European permit market costs $5.
“If we should have such high subsidies for electric cars in Norway, it must be the goal that electric cars could be a solution for the rest of the world also. You can’t have these subsidies only to introduce electric cars in Norway,” Holtsmark says.