Norway has taken the lead in terms of electric car ownership. This autumn, the best selling cars in this Nordic country were the US’ Tesla Model S and the Nissan Green Leaf. As a result, Norway has the largest market penetration of electric cars in the world.
Electric cars are usually a lot more expensive than regular cars. This is not the case in Norway. In fact, purchasing a conventionally powered car is surprisingly high in Norway, even when taking into consideration the high income of the local population. Consumers need to pay several taxes based on the car’s weight and oil consumption, which can double the initial car price. However, if they choose an electric car, they are exempt from VAT and other taxes. This makes electric cars more attractive and rather competitive.
Moreover, even though Norway is one of the top twenty oil-producing countries, taxes on petrol prices are still very high.
The government is encouraging the population to acquire electric cars not only by using financial incentives but also by making electric car drivers’ life much easier. Thus, electric car drivers enjoy such privileges as free parking or the right to use bus lanes.
Can this trend be exported to other countries, to China in particular?
There is a paradox in the introduction of electric cars in Norway. If the government is able to subsidise the electric vehicle market so heavily, it is mainly thanks to its revenue from oil. There are very few countries that could finance these policies. Furthermore, in most Norwegian households, electric cars are used as second cars. Norwegians can therefore afford to own two cars, which is not the case for the Chinese.
Electric cars will remain a “luxury good” for the next few years, but the Norwegian example will convince car makers that there is a demand for electric cars. As the market grows, prices will decrease, expediting electric car ownership. Then maybe by 2030, petrol stations will be replaced by power stations… Hopefully, renewable energy will also replace coal as China’s main source of energy by this time.