Companies such as Tesla, Ford, Nissan, BMW and Chevrolet have all released electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) to tackle the imminent danger of carbon emissions in our atmosphere. These cars come with some advantages, from government tax breaks and credits to cheaper running costs. However, if they are so advantageous, why have they struggled to hit the ground running in most economically developed countries?
To give you some background, the USA has led the way by registering just under 15 million PEVs (a combination of EVs and PHEVs) in Q1 2015, an inordinate 392.3% more than Q1 from the previous year. Do not let those numbers fool you – great as this achievement is when you look at the USA as a whole these stats represent a mere 0.8% of total vehicles registrations on US roads, the same as it was in 2014. We should instead look to Norway. Although Norway has fewer PEVs, Norway also has a smaller population size. Therefore, Norway can boast over 33.1% of vehicles on their roads run on electricity.
In Q1 of 2016, 24.4% of all newly registered vehicles in Norway were either EVs or PHEVs. To give some perspective of how unusually high, this is, the next highest percentage per capita was 1.8% from their Nordic neighbour, Denmark.
So what exactly are Norway doing that the rest of us aren’t?
Firstly, Norway has invested a substantial amount of their internal resources into EV infrastructure. The premise of these vehicles is that they run on renewable batteries which need regular charging. Norway reportedly had close to 6,000 charging points in 2014, approximately 1 per 900 people – quite remarkable given that there were fewer than 500 charging points in the country, or 1 per 10,295 people, as of 2009. The UK in comparison has 4,091 charging stations, which equates to almost 1 per 16,000 people.
Secondly, the Norwegian government has provided generous subsidies and tax breaks to those who own EVs. Positive incentives, such as VAT (25%), purchasing tax exemptions and allowing EVs free access to toll roads and bus lanes, seem to be working. Meanwhile, other positive incentives, such as tax rebates or credits provided by the UK, US, French and Spanish authorities, have been far less successful. However, as the purchasing tax in Norway is unusually high government officials have decided that their legislation has been too relaxed on EV drivers and as of 2018, EV drivers will have to pay half of road tax, and by 2020 they will be paying it in full.
Lastly, and more importantly, Norwegians know a lot about electric cars. Can the average Briton name any model of EV? Can the typical American give you directions to their local EV charging point? Most likely, the answer is no. Venture over to Norway and the story changes. Car dealers and the Norwegian government have been working for close to three decades on promoting awareness for these vehicles around the country. Some might find this surprising, given that the Norwegian economy is heavily reliant upon oil and gas. However, due to the effect of the volatile oil prices in recent years, particularly in January, the transition from oil and gas to electric energy could be seen as a clever way for Norwegians to diversify themselves, mitigate risk and counteract future volatility in oil prices.
Will The World Follow?
It will be interesting to see if other OECD nations will follow in Norway’s footsteps and try to reduce their carbon footprint by investing in, not only these vehicles but the philosophy behind them. Worrying signs are coming from the US, as the state of Georgia has recently repealed a $5000 tax credit for EV’s and climate change sceptics, like Donald Trump, are beginning to rise the ranks in US politics.