Mathilde Carlier
Research Expert covering transportation and logistics
Over two out of 10 passenger cars in Norway's vehicle fleet had an electric powertrain in 2022. While internal combustion engine (ICE) vehicles remained the most popular passenger car type across Norwegian roads, ICE and hybrid vehicles only amounted to 11.43 percent of new passenger car sales in 2022. Most new light vehicles sold in the country had a plug, making Norway the European country with the most dynamic new electric vehicle (EV) market.
EVs' growing success in Norway is partly due to governmental policies. Norway offers VAT cuts for electric vehicles, making them cheaper than ICE or hybrid cars. As of 2022, an average of 20,360 U.S. dollars were subsidized for EV purchases in the country, compared to 1,157 U.S. dollars in China and 7,500 U.S. dollars in the United States. Additionally, the government supports a shift toward shared e-scooter services, and public bus fleets are progressively electric-powered. E-mobility can burden the national electricity grid, but Norway boasts a robust renewable electricity industry. Primarily supplied by hydroelectric, Norway's grid has so far coped with EVs' increasing hunger for electricity.
One of these aspects is charging infrastructure accessibility. To cope with the orchestrated growth of battery electric vehicle ownership, the government had to make charging points accessible and widely distributed. Between 2015 and 2022, the number of publicly accessible chargers grew by over 335 percent to around 24,100 units. However, while Norway has considerably scaled its EV charging network, it faces similar challenges to other European countries. Standard type 2 chargers were the most common public charger connector type in the country in 2022. These alternating current chargers tend to be slower than direct current chargers, as the electricity then needs to be transformed into direct current by electric vehicles' onboard charger. Furthermore, as Norway invests in its public charging infrastructure, some counties are left behind in Norway's electrification. Viken, the Norwegian county with the most extensive charging network, had over thirteen times more public charging points than Troms of Finnmark, the county with the smallest charging network.
EVs' growing success in Norway is partly due to governmental policies. Norway offers VAT cuts for electric vehicles, making them cheaper than ICE or hybrid cars. As of 2022, an average of 20,360 U.S. dollars were subsidized for EV purchases in the country, compared to 1,157 U.S. dollars in China and 7,500 U.S. dollars in the United States. Additionally, the government supports a shift toward shared e-scooter services, and public bus fleets are progressively electric-powered. E-mobility can burden the national electricity grid, but Norway boasts a robust renewable electricity industry. Primarily supplied by hydroelectric, Norway's grid has so far coped with EVs' increasing hunger for electricity.
Investments in electric vehicles' success
Norway's national government established incentives for electric vehicle purchases in the 1990s. However, it was not until 2016 that the battery-electric vehicle market exploded. That year, the government set the target of phasing out new fossil-fuel light vehicles by 2025. Between 2017 and 2022, the electric vehicle fleet more than tripled. The world's most extensive electric vehicle subsidies drove this success. In 2022, purchasing a small electric vehicle received average financial benefits of 14,500 U.S. dollars, which climbed to some 27,000 U.S. dollars for large EVs. Electric cars were further boosted by economic benefits for vehicles in operation of an estimated 109 U.S. dollars per annum. Policy instruments included free parking, bus lane access, tax reduction, and toll exemption. However, Norway's unparalleled EV subsidies were rolled back in January 2023 to promote active mobility. VAT exemptions were replaced by a new dynamic VAT scheme in which the most expensive EVs will incur higher VAT fees. The country will therefore have to rely on other aspects of the EV market to keep boosting sales to reach its 2025 goal.One of these aspects is charging infrastructure accessibility. To cope with the orchestrated growth of battery electric vehicle ownership, the government had to make charging points accessible and widely distributed. Between 2015 and 2022, the number of publicly accessible chargers grew by over 335 percent to around 24,100 units. However, while Norway has considerably scaled its EV charging network, it faces similar challenges to other European countries. Standard type 2 chargers were the most common public charger connector type in the country in 2022. These alternating current chargers tend to be slower than direct current chargers, as the electricity then needs to be transformed into direct current by electric vehicles' onboard charger. Furthermore, as Norway invests in its public charging infrastructure, some counties are left behind in Norway's electrification. Viken, the Norwegian county with the most extensive charging network, had over thirteen times more public charging points than Troms of Finnmark, the county with the smallest charging network.
The Norwegian consumer and the EV market
Despite these challenges, the Norwegian government's incentives and investments is paying off. Fully-electric vehicles represented over 79 percent of sales in 2022, despite a car demand deeply impacted by the inflation. In a 2023 survey published in June, 32 percent of Norwegians reported intentions to purchase a car. Under a quarter of respondents to an April 2022 mentioned not being able to afford an electric car and the lack of charging stations as factors leading them to not consider renting, leasing or owning an EV, while range anxiety ranked as consumers' main concern. In contrast, the lack of road charging infrastructure was the main reason inhibiting EV purchases worldwide, according to a March 2022 survey. At 46 percent, insufficient public charging was also the fourth-leading concern for U.S. consumers as of October 2022. Some of the most popular passenger car models in the Norwegian car market are fully electric. The Tesla Model Y was Norway's best-selling model in 2022, with Volkswagen's ID.4 and the Skoda Enyaq also in the top three. As Norway imports most of its vehicles, its passenger car market reflects the EV market worldwide. The Model Y was also the global best-seller in 2022.
