Published on November 30th, 2013 | by Zachary Shahan408
Top-Selling Cars In Norway Now Electric Cars (Two Months In A Row) — 4 Reasons Why
November 30th, 2013 by Zachary Shahan
For two months in a row, the top-selling car in Norway has been an electric car. (Yes, the #1 best-selling car of any kind was an electric car in both September and October.) Interestingly, it wasn’t the same car. In September, it was the Tesla Model S that led Norwegian auto sales. In October, it was the Nissan Leaf.
Now, there’s a lot of speculation about why Norway is kicking serious ass in electric car sales. Some people think it’s “this,” some think it’s “that,” etc, etc. But can anyone say what it really is?
Well, at EVS 27 in Barcelona last week*, the best presentation that I saw at the whole symposium was one on exactly this topic, which was given by Francisco Carranza, Manager of Corporate Planning at Nissan Europe. Clearly, Nissan is interested in knowing why its Leaf has sold so well in Norway. And it’s also interested in having that level of per capita sales in many more markets. So, it has a good incentive to communicate its best research findings on this matter to as many influential people as possible. I think Francisco really nailed it, and I’ll do my best to share what I learned from that presentation and others (there were a lot of presentations on Norway’s EV success) below and in follow-up posts.
I’m going to jump to the big point right now: while Francisco noted that it was a combination of many important components that has made Norway such a great EV market, he said that the thing that really stands out in Norway is electric vehicle awareness. However, there are some other critical components as well, which he and questioners/commenters brought up. The “big four” which other countries/markets could really try to replicate (at least loosely) include:
1. Electric Vehicle Awareness. Francisco noted that Norway had been working to raise awareness about electric vehicles for 30 years, and the results are clear. A common Norwegian on the street knows what an electric vehicle is and knows which EV models are on the market (unlike the average person in the US). They know about the benefits of EVs. They know about EV incentives. They know where they can charge. And so on and so on. So, Francisco’s biggest recommendation to those working for the EV revolution in other countries was: find ways to raise awareness about electric vehicles!
2. Negative Incentives. This actually came from the Q&A after the presentation. It’s not something Francisco brought up, probably (as the moderator noted) because he represents all of Nissan, which is still trying to sell its gas-powered vehicles as well. But this could potentially be #1, as one commenter in the audience noted. Negative incentives (e.g., taxes) on gasoline-, diesel-, or natural gas–powered vehicles are pretty significant in Norway, more so than perhaps any other country. These negative incentives push people away from dirty vehicle options and push them towards electric vehicles much faster.
3. Incentives For EVs. Francisco and others did note that Norway has some quite helpful incentives for electric vehicles. It actually doesn’t have rebates or tax credits for EVs (the key incentive used by the US, the UK, France, Spain, and several other countries). However, EVs are exempt from Norway’s rather hefty VAT and sales taxes. Furthermore, what seem to be the biggest incentives for Norwegian EV drivers (based on EV driver surveys) are free access to toll roads and access to bus lanes (see the chart above). Outside of these strong incentives, there are also free parking (ranked quite high in importance), free charging, and free ferry incentives; and a low annual road fee (ranked quite high in importance). However, one of Francisco’s main points was that such incentives are available in many other places, so these don’t explain why Norway is so far ahead of other countries. (Nonetheless, that’s not to say these incentives aren’t super helpful and one of the key building blocks of success.)
4. A Decent EV Charging Infrastructure. Again, this is something that exists in other places, but Norway is certainly one of the leaders on this front. It is building out a pretty good network of EV charging stations. One of the other speakers noted that big EV charging parking lots are prominent right in the center of Oslo — you can’t miss seeing them. (Again, this is actually one of the ways in which awareness about EVs is raised.)
In the Q&A session, I posed a couple questions regarding the importance of 1) what I would call virality as a result of market saturation; and 2) high wealth per capita. Some on the panel (who had also presented on Norway’s EV success) did indicate that they thought that market saturation element was part of the story. (Familiarize yourself with technology adoption curves if you haven’t yet.) Regarding high wealth per capita, Francisco noted that Norwegians made a lot of money but that they also paid high taxes. He also noted that Norwegians weren’t the richest people and there were other nations with high per capita wealth. True, but I think this is still one of the many factors that contribute to Norway’s EV success.
A couple things against Norway, however, are also worth noting. The country is very large, geographically, and spread out. It’s also a very cold country. So, in those respects, it’s surprising that it is a leader on the EV front.
But Norway is a clear leader, so I think other countries would do well to take note of the above 4 points. (#5 is, of course, something that comes about naturally as the market grows; and #6 is something that countries can’t exactly bring about quickly, and they’re constantly looking to bring about anyway).
Any more thoughts on Norway’s electric vehicle success?
*Keep an eye on all my EVS 27 coverage here.
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