News reports out of Norway highlight a large cutback in sales at Oslo’s largest Mercedes dealer, Bertel O Steen. Norwegian car sales have increased by 4 percent over last year, but there has been a large shift away from gas and diesel vehicles, and toward electric vehicles.
With the Tesla Model 3 available in Norway since February, sales of competing brands have suffered. Bertel O Steen has seen its passenger car sales drop a full 33% in the first four months of the year as compared to the same period last year. The CEO, Bjorn Maarud, sent a message that they have set a goal to cut operating costs by 200 million NOK (which is approximately $23 million) this year. With annual turnover of 10 percent a year and natural retirement, they hope to minimize the need to layoff people. They do plan to invest heavily in electric cars in the future, including the Mercedes EQC, Kia Soul EV, and Kia Niro EV. The CEO admits that their suppliers are a bit out of step with demand in the Norwegian market, but is confident that for 2020, their portfolio looks completely different.
Notably, the Tesla Model 3 accounted for 31% of all passenger auto sales in Norway in March. Due to Tesla’s cyclical delivery schedule, March was an abnormal month that basically represented the quarter’s sales for Tesla in Norway, but still, the Model 3 is far and away the top selling car in Norway in 2019 so far.
It is perhaps a good time to review the graph here (on the bottom) by Nicholas Felton. Norway is far ahead in the EV adoption curve, but we expect other countries will be in the same place within 5 or so years.
This should serve as a warning to companies like Toyota that take a “wait and see” attitude toward EVs. As Tony Seba describes more clearly than anyone else I know, although a disruption starts slowly, when things hit a tipping point, demand shifts quickly and those unprepared for the change must suffer the effects of the disruption.
Editor’s note: Yes, that’s me at the beginning of the video. I was the co-host of rEVolution 2018 and enjoyed introducing Mr. Seba.