In Oil-Producing Norway, Electric Cars Are All The Rage
Electric cars are becoming a significant percentage of cars on the road in Norway. But are they really the future?
OSLO — Electric vehicle (EV) owners living around Oslo have an extra incentive to wake up early. That's because in the Norwegian capital's city center, parking spaces equipped with charging devices are in short supply.
"If I get here after 6:45 a.m., I can be sure I won't find anywhere to park and charge my car," says Henning Heitmann, a well-dressed professional in his 40s. Heitmann is in the third level of a bunker-like underground parking. He works in a legal office not far from the parking area. And like many other people, he commutes to work in downtown Oslo every day from his home, some 40 kilometers away.
There's a reason these 1,200 EV parking spaces are so sought after: They're free, as is the electricity they provide. And since the purchase of electric vehicles is exempt from the 25% value-added tax (VAT) and EV drivers don't have to pay tolls on the highways to the center of Oslo, a growing number of Norwegians are making the switch. It's a boon in a country that has one of the highest costs of living in Europe.
Norway is the world's 13th biggest oil producer. But it is also a pioneer in electric mobility, earning praise overseas from environment activists and car manufacturers alike.
Electric cars offer other advantages, too.
"We're allowed to drive in the bus lanes in and out of Oslo," Heitmann explains. "It's a lot faster."
Sweetening the deal
Launched in 1990 and expanded since then, the push to encourage EV use has borne fruit. Norway is the country with the highest proportion of electric cars per capita. Late last year, the Norwegian Electric Vehicle Association celebrated the sale of the 100,000th all-electric car. In 2016 alone, 24,222 new vehicles were sold, representing 16% of the total number of cars sold that year — a world record. Add the 20,063 hybrid vehicles sold, and the share rises to 29%.
Government incentives played a crucial role in this breakthrough.
"The abolition of the VAT made all the difference and makes these vehicles very competitive," says Christina Bu, secretary general of the Norwegian Electric Vehicle Association. Her face has become familiar to Norwegians, who have gotten used to seeing her making her case in the media.
Bu acknowledges that EV technology is still developing and that the charging-station infrastructure "is imperfect." That's why the government incentive package worth several hundred million euros is so vital. "It would have been impossible to attract so many consumers otherwise," the EV association head explains.
The Norwegian authorities want to give green cars every opportunity to develop, especially given that close to 100% of the cheap electricity the country produces comes from its hydropower stations. Norway has taken the lead in that sector thanks to a few stubborn engineers who, in spite of all the jibes, designed their own vehicles more than 25 years ago. Celebrities — including the Crown Prince Haakon and the lead singer of A-ha — played their part as well by giving electric vehicles a glamorous appeal.
Switching to electric cars is also a way to reduce carbon emission; which, in turn, helps boost the country's image and reputation. Norway is the world's 13th biggest oil producer. But it is also a pioneer in electric mobility, earning praise overseas from environment activists and car manufacturers alike.
"We're used to our comfort"
Norway's minister of transport, Ketil Solvik-Olsen, is well aware of that. He recently went to meet representatives of Tesla and other manufacturers to assess the state of technological progress in what, on a global scale, remains a niche. "We need help from the manufacturers to succeed," Solvik-Olsen said in the wings of a Nordic Electric Vehicles Summit in February near Oslo.
He and the right-wing Progress Party he represents are no big fans of public subsidies or high taxes. Far from it. But in this respect, as well as in others, they've made some compromises since entering the government led by the conservative Erna Solberg in 2013.
Solvik-Olsen himself has a gas-guzzling 1985 Cadillac that, by his own admission, he "pampers." But he supports the government's EV-incentive regime.
"Of course we need to tackle the impact of cars on the environment, the noise and public spaces," he says. "The market won't do it without the government's intervention. That's why we're investing in public transport infrastructure. We don't want 16-lane highways running in and out of Oslo. We prefer more bus lanes and more trains."
The problem is that for now at least, the public infrastructure doesn't match the needs or expectations of commuters. On weekdays, at rush hour, local busses are packed, meaning that during the long winter, people often need to go on foot.
"It's not easy. We're used to our comfort," says Per Knusden, a commuter in his 50s. A monthly bus ticket costs between 80 and 200 euros per month, depending on the areas. And when the bus lanes started to jam because of the increasing number of electric cars authorized to drive on them, more people gnashed their teeth.
Since then, the legislation has been amended. Any electric car entering or leaving Oslo now must transport at least two people — driver included — to be able to drive in a bus lane at rush hour. But some still find ways to cheat, by taking the babysitter with them and paying the bus-ride back home for them or by installing a mannequin on the passenger seat.
Another upcoming change is the end of the toll exemption for electric cars. Starting next year, though, the rate will be five to six times lower than that for other vehicles.
"There must be an incentive to use electric vehicles; but at the same time, they need to contribute a little to funding public transports and in the fight against air pollution," explains Sture Portvik, the EV expert at Oslo's city hall.
The municipal government, run by a left-wing coalition since 2015, also wants to move EV parking spaces from downtown Oslo to peripheral neighborhoods. The stated goal is to reduce the use of private cars — even electric ones — as much as possible. That's prompted more grumblings from commuters.
The government is planning to stop sales of vehicles that emit carbon by 2025, thus marking the beginning of a new era — the era of "zero emission vehicles."
"I don't quite get the logic of this measure," says Lowe Lindroth, a banker who owns two electric cars, one for longer family drives and the other to go to work.
The new charging stations outside the city are being installed in partnership with private companies. And users will have to pay at a kilowatt-hour rate that is actually twice as high as the normal household price.
Christina Bu calls the charging station shortage "the main obstacle preventing electric vehicles from taking off." She hopes to see the number of electric cars in Norway (only 3.5% of the total number of cars so far, despite all the government subsidies) top 400,000 by 2020.
But time is running out, as the VAT exemption is expected to be removed that same year. At the same time, the government is planning to stop sales of vehicles that emit carbon by 2025, thus marking the beginning of a new era — the era of "zero emission vehicles." Incentives or no incentives, consumers may soon have no choice but to join the EV revolution.