Thursday 1st Feb 2018
As part of the twin fights against climate change and air pollution, governments around the world have been trying to encourage drivers to replace fossil fuels with electricity. The results are mixed, but one nation stands head and shoulders above the rest.
That nation is Norway. In 2016, according to the International Energy Agency, Norway had 133,260 plug-in cars on the road. That's 255 electric cars for every 10,000 Norwegians. For comparison, the UK has just 13 plug-in cars for every 10,000 people.
And that figure is growing fast. In 2017, 21% of all newly-registered cars in Norway were pure electric vehicles, and another 18% were plug-in hybrids. That’s a combined electric market share of 39% — much higher than their 2% share here in the UK.
And, as the graph below shows, that share has risen dramatically in the last few years.
Subsidies for electric vehicles
So, how has Norway done it? Mostly, it’s been through generous government subsidies. Electric cars are exempt from both the purchase tax and the 25% VAT rate that apply to sales of other new cars. Those exemptions can lower the cost of buying an electric vehicle by more than £10,000, making the UK’s Plug-in Car Grant (worth up to £4,500) seem small by comparison.
Electric car drivers in Norway also benefit from various freebies that reduce the day-to-day costs of motoring. They don’t have to pay tolls to use motorways and tunnels, and, in many places, they get free parking and free use of charge points too.
Will electric cars keep receiving benefits in the future?
These policies certainly seem to have worked. However, with electric vehicles rising in popularity, some politicians believe that it's time to roll them back a little. So in 2016, the national policy of free parking for all plug-in cars was lifted, although many cities retained their versions of the policy.
Last year, the Conservative-led minority government proposed ending the tax exemptions for the largest electric vehicles – a policy that was nicknamed the ‘Tesla Tax’. However, that proposal was later dropped as part of the Government’s Budget negotiations.
So, the generous support for electric vehicles is not over yet. Far from it, in fact. The Government has set an ambitious target of making all new cars zero-emission by 2025. Given Norway’s impressive record so far, we wouldn’t bet against them achieving it.