Look to Norway – Lessons for the world on the reputation journey of electric vehicles
Earlier this year, following a visit to Norway, a journalist from the Financial Times declared, with good reason, that the electric vehicle future has already arrived in the Land of the Midnight Sun. In many ways this is true; however, several hurdles still stand in the way of a fully electric future for passenger vehicles but other countries can learn from Norway’s experiences.
With a remarkable eight out of 10 new passenger vehicles sold in Norway in 2022 being electric, and more than half a million electric vehicles on Norwegian roads, Norway is undeniably a leading light in the global electric vehicle transition. By comparison, electric passenger vehicles only accounted for 14% of global passenger vehicles sales in 2022, according to the IEA – the International Energy Agency.
Yet as 2025 approaches, the year Norwegian authorities hope to terminate sales of new petrol and diesel vehicles, the goal of complete electrification of the passenger vehicle sector still seems a long way off. Why? The simple answer is that electric cars, at least for now, are not complete substitutes for their petrol and diesel predecessors in every sector of the car market. Should Norwegian authorities get their way in 2025, some car buyers may find themselves in the unusual situation of not being able to buy a new vehicle that fulfills their transportation needs – a phenomenon almost certainly set to spread to car markets across the globe.
One well-known issue is that electric cars are not able to tow loads as heavy as their petrol and diesel counterparts – a dealbreaker, especially for many commercial users. And especially so in a country where motorists are known for their love of trailer towing. As long as there are only a limited number of zero-emission towing vehicles available, this will mean that those vehicles that are currently on the road and are still to be sold before a proposed petrol and diesel ban will have to be kept in service longer. This, again, begs the question of what can be done to reduce the emissions of the petrol and diesel vehicles which cannot, at this stage, be replaced by electric vehicles. Synthetic fuels could be part of the solution, alongside hydrogen which for heavy goods vehicles seems an unavoidable part of the future energy mix.
An additional issue – and one that has plagued the reputation of electric vehicles since their post-year-2000 renaissance – is that in countries like Norway with a cold-winter climate and long distances, electric vehicles are not a practical proposition for all drivers because in certain cases struggle to reach the destination within the expected time frame. By comparison, countries with warmer climates are spared from shorter winter range, yet are left to contend with a charging infrastructure which leaves much to be desired compared to that of the Norwegians. Admittedly, range issues will become less prevalent as electric passenger vehicle technology improves; however, in 2023 it still has a negative impact on the reputation of electric vehicles and their appeal to certain segments of the car-buying public.
Despite these issues, the story of electric vehicles and the reputation they have earned in Norway has been an unrivalled success. To the outside world, it has been easy to leap to the conclusion that Norwegian motorists are particularly eager to be green as well as a nation of early technology adopters, and to a point this analysis is correct, yet alone these two factors do not explain the strong foothold of the electric vehicle.
It must be remembered that the lack of purchase taxation for electric cars has been a crucial additional driver of the Norwegian electric vehicle popularity. An almost-forgotten financial framework, originally tailored for Norwegian EV manufacturers Think and Buddy, was crafted to support the emerging industry ahead of the highly successful Winter Olympics in Lillehammer in 1994. Both brands went bankrupt in 2011, and with only 5,000 EVs on the road at that point, there was still a way to go for the reputation of electric cars as cheap, fun, and fast alternatives to take hold.
This reputation journey was aided by the fact that Norwegian vehicle purchase taxes have traditionally been very high, particularly for powerful cars. Imagine, for instance, when, back in 2013, Norwegian car buyers were for the first time given the chance to purchase cars such as the Tesla Model S – a luxury American luxury sedan with more than 400 break horsepower and a retail price less than half that of the petrol and diesel competition thanks to the substantial governmental tax discount. Sales success was a given for Tesla. A strong rise in electric vehicle popularity was inevitable. And, if anyone needed proof that strong financial incentives work to change buyer behaviour, there was no need to look further.
However, Norwegians still own and drive more than two million petrol and diesel vehicles which, with an average life span of 10.8 years, still have a decade or two left on the road, especially as replacement for some will become increasingly harder to come by. The introduction of the EU enforced E10 petrol standard this year will do something to reduce the emissions of these vehicles, as will the increased use of biodiesel. Still, there remains an opportunity for further eco-friendly, sustainable fuel alternatives compatible with the existing fleet of combustion engine vehicles without modification such as synthetic fuels.
The most recent chapter of the Norwegian story began on January 1st this year when, in recognition of the fact that Norwegian vehicle tax revenues had sunk to an unacceptable level due to record EV sales, the first stage of EV vehicle purchase taxes were introduced. Unsurprisingly, this boosted sales during the last months of 2022, while sales in 2023 have dropped significantly. Once demand returns, the question is how appealing electric cars will be to buyers, given their obvious practical drawbacks, if they come with a similar price tag to petrol and diesel vehicles.
So, what can be learned from the Norwegian EV story?
Despite record sales and a fast-approaching end to the sale of combustion engine vehicles, a very large number of petrol and diesel vehicles will remain on Norwegian roads in coming years. Replacing less eco-friendly vehicles with more eco-friendly vehicles, while at the same time making use of eco-friendly fuels for combustion-powered vehicles still on the road, appears the most effective and practical approach. In addition, there is little doubt that financial incentives can do much to sway buyers, especially if steps are taken to secure the infrastructure required to make electric cars a practical proposition for the majority of the car-buying public.
Should the world, as American President Franklin D. Roosevelt suggested in his famous wartime speech, look to Norway also when predicting the future of electric passenger vehicles beyond the Norwegian borders? The answer is yes. Because the transition to electrical vehicles in any country will be forced to contend with many of the same problems already experienced and overcome by the Norwegians.