What Norway’s Journey Can Teach Other Markets

Norway has a huge EV adoption rate advantage and in this article, EV infrastructure expert, Chris Chamberlain explores how Norway got here and where the US and UK stand in the key factors that helped Norway become a global leader.

If you’ve travelled across the Europe, you’ll notice that Norway leads the way in EV adoption rates with over 82% of new car sales being electric in 2023. CNBC recently posted a documentary¹ exploring how Norway got to this point and what lessons the US can take away from the journey. The main factors that helped Norway get to where it is today are the incentives for owning electic vehicles and the rapid rollout of the charging network.

Incentives

Norway’s policies to support green transport started in the 1990s. Over the years they have used incentives including zero registration tax, free tolls, free parking, zero value-added tax and use of bus lanes. The zero value-added tax had the biggest impact. However, the measures did not work until EVs became readily available, and Tesla’s entry played the biggest role. The incentives made EVs more affordable to buy and operate than ICEs. Nowadays, individuals can also benefit from a big used EV market. 

Charging network

In the early stages, EV charging was also subsidized. For example, the city of Oslo invested heavily into providing infrastructure and made charging free at the beginning. Norway has large networks of EV chargers, both residential and rapid. Commercial providers such as stores and restaurants also recognized the importance of having EV charging stations at their locations. In Norway, cars came before the chargers, with early adopters charging at home. The charging network also requires enough power. A big advantage that Norway has is the use of hydropower, which is a cheap, renewable source that helps them power the grid. They also have big plans to harness wind power. Grid companies work alongside charging providers to make improvements as it gets more and more difficult to add additional chargers to an electrical network that is already strained. 

Where the UK stands

In the UK, there are no tax benefits when it comes to the acquisition or ownership of EVs for individuals, however, there are some tax benefits in the form of preferential tax rates for electric and ultralow emission cars for companies. There are incentives for the purchase of EVs where drivers can save 35% of the cost of an electric car (up to a maximum of £2,500) depending on the model² .

Norway’s approach is more comprehensive, encompassing significant tax exemptions, operational benefits, and infrastructural support. Norway’s policies have resulted in making EVs more economically attractive than ICE vehicles much earlier, fostering a robust market for both new and used EVs. The UK’s measures, although beneficial, are not as extensive in scope and impact as those implemented in Norway.

Government support is stronger when it comes to charging infrastructure, mostly in the form of grants. Homeowners can benefit from the EV Chargepoint Grant for Residents/Flat Owners, covering 75% of the cost. Landlords have access to a separate grant scheme, the EV Chargepoint Grant for Landlords, to equip their properties. Apart from LEVI, local authorities can apply for funding through the On-Street Residential Chargepoint Scheme (ORCS). Businesses are not left out either, the EV Infrastructure Grant for Staff and Fleets helps smaller businesses install chargers, while the Workplace Charging Scheme (WCS) supports larger entities with the cost of workplace charging stations³ . Based on public opinion in September 2023, while the number of public chargers is growing, especially on residential streets, consumers still feel there aren’t enough.

There are also regional differences, London has the most chargers but lags behind some European cities in charger density. Another challenge is that most chargers are slower AC chargers, while the faster DC chargers are less common. Additionally, most government grants have gone to car park charging, even though most completed projects were for home charging. These disparities make EV ownership less convenient for some and highlight the complexity of the issue⁴ .

Where the US stands

The US federal government offers tax credits for consumers and fleets looking to acquire clean vehicles, as well as tax credits for dealerships and EV manufacturers. For example, taxpayers purchasing an eligible vehicle may qualify for a tax credit of up to $7,500 for new vehicles and up to $4,000 for pre-owned vehicles. Eligibility is based on several requirements, including income and specific vehicle criteria. There might also be additional incentives on state or local government levels⁵ . While this is a welcome benefit, it still pales in comparison to the tax exemption that made zero emission vehicles so much more affordable than ICEs in Norway.

The US has dedicated a significant amount of funds to grants supporting EV charging infrastructure. Many significant plans are funded by the Bipartisan Infrastructure Law (BIL) which provides billions of dollars for states not only to build charging stations but also to deploy electric buses and school buses, and invest in American-made batteries and manufacturing. States are responsible for developing plans, offering incentives, and managing funding distribution. Major BIL programs include the $5 billion NEVI Formula Program for EV chargers along highways, $1.25 billion for Alternative Fuel Corridor Grants and $1.25 billion for Community Alternative Fuel Infrastructure Grants⁶ .

The availability of EV charging stations is increasing rapidly in the US, with the number of stations more than doubling since 2020. This growth is concentrated in urban areas, where most Americans (60%) now live within a mile of a charger. Proximity to chargers influences EV ownership and consideration, with those living closer being more likely to own or consider an EV and support the phasing out of gasoline cars by 2035. Despite the rise in infrastructure, only 17% of U.S. adults are very confident in the country’s ability to build the necessary EV support, though this confidence is higher among those living near public chargers⁷ .

The key takeaways

In a way, other developed markets have an advantage, as they are operating in a different world than when Norway first began the transition. For example, EVs are already readily available and the charging infrastructure is not being built from scratch, furthermore, they get to learn from the case studies of other countries that are farther down the zero emission journey. The main takeaway goes to the governments which have to give a first nudge to get individuals to buy the vehicles and operators to build charging networks. 

Norway’s journey hasn’t been mistake-free. They first encountered range anxiety (which might still occur in rural areas), followed by charger anxiety with typical problems such as queues and out-of-service chargers, nowadays charger anxiety is connected to payment options as there is a lack of standardized systems with charging operators using various apps. The push towards EVs has also meant a push towards cars as fewer people are opting for public transport and entering cities and personal vehicles. They have lowered public transport rates to incentivize people to use it. 

Future steps for Norway 

The future steps for Norway include dealing with some problems they have encountered such as installing card terminals in charging stations. As EVs become the new normal it is time to start phasing out the incentives and ruling back subsidies, this includes limiting the use of public lanes, the discount on parking, the free use of ferries, and the exemption from road tolls. The next steps also include the electrification of heavy trucks. The country is working on making public transportation fully electric, in Oslo they have already succeeded and have electric buses and ferries. With such a large number of EVs on the road, there is also the issue of handling and recycling batteries once the vehicles come to the end of their life cycle.

Sources:

[1] https://www.cnbc.com/2024/02/17/what-the-us-can-learn-from-norway-when-it-comes-to-ev-adoption.html
[2] https://www.acea.auto/files/Electric-cars-Tax-benefits-purchase-incentives-2024.pdf
[3] https://uk.mer.eco/news/government-guide-incentives-grants-for-evs/
[4] https://www.statista.com/topics/11913/electric-vehicle-charging-infrastructure-in-the-united-kingdom/#topicOverview
[5] https://afdc.energy.gov/laws/ev-tax-credits#:~:text=The%20maximum%20credit%20is%20%247%2C500,battery%20or%20fuel%20cell%20EVs
[6] https://afdc.energy.gov/fuels/electricity-infrastructure-state-planning
[7] https://www.pewresearch.org/data-labs/2024/05/23/electric-vehicle-charging-infrastructure-in-the-u-s/#:~:text=in%20China%2C%20Europe-,Distribution%20of%20EV%20charging%20stations%20in%20the%20U.S.,Fast%20chargers%20in%20the%20U.S.&text=That%20is%20a%20more%20than,roughly%2029%2C000%20stations%20in%202020.