Realist, not conformist analysis of the latest financial, business and political news

Norway and Electric Cars

How fast can you build the factory?

From our Swindon Correspondent:

From The Guardian

“Once you are well over 200 miles per range, and you’ve got a really good charging infrastructure, it becomes a no-brainer. We’ve seen that in Norway,” said David Bailey, a professor of business economics at the University of Birmingham.
Norway is selling something like 50% electric cars. Far more than anyone else. Here’s a question: why only Norway? Here’s something I noticed:-
There aren’t many good roads across Norway. There’s 4 reasonably large population areas, a long distance from each other (4+ hours) and sod all between them. The distances are so large that you’re into long-distance trains or flights.
My guess is that most people in Oslo potter around the Oslo area. If it’s empty and barren beyond 50 miles (and most of the places seem to be barely more than large villages beyond that) an electric car is going to be fine. You’re never going to have range anxiety. When they have to go to Bergen (if at all), they don’t drive.

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HJ777
HJ777
1 month ago

This may also explain things. The Norwegian EV incentives: No purchase/import taxes (1990-) Exemption from 25% VAT on purchase (2001-) No annual road tax (1996-) No charges on toll roads or ferries (1997- 2017). Maximum 50% of the total amount on ferry fares for electric vehicles (2018-) Maximum 50% of the total amount on toll roads (2019) Free municipal parking (1999- 2017) Parking fee for EVs was introduced locally with an upper limit of a maximum 50% of the full price (2018-) Access to bus lanes (2005-). New rules allow local authorities to limit the access to only include EVs… Read more »

Quentin Vole
Quentin Vole
1 month ago

True. Also, most of Scandiland imposes huge taxes on car purchases (which is why there are so many 20yo Volvos driving around). If you can avoid these tariffs by buying electric, that’s an attractive proposition.

Leo Savantt
Leo Savantt
1 month ago

Over 93% of Norway’s electricity is generated by hydro, that makes Norway able to power electric cars in a “green” manner, whereas in other countries electric cars are powered by burning coal, China and the USA being the more obvious examples. However, the reason the Norwegian government is able to afford to subsidise and incentivise the purchase and use of electric cars is that Norway exports huge amounts of oil and natural gas. Electric car use in Norway, even with hydro, relies on a massive output of CO2.

TD
TD
1 month ago

I suppose most of us do most of our driving around town, but yes, I can see the argument that subsidies combined with considerable inconvenience to taking a long drive might help propel electric car sales.

Barks
Barks
1 month ago
Reply to  TD

If the list of ‘subsidies’ above is correct, it is a wonder that the EV take up is so low. Why would one purchase other than an EV with the tilted play8ing field?

TD
TD
1 month ago
Reply to  Barks

Perhaps some Norskies do take long drives, or perhaps have a truck that they load up and thereby lose a lot of range.

james morgan
james morgan
1 month ago

Right. Plus:

• 97% of Norway’s electricity comes from hydropower; its electricity prices are 40%-70% of European levels

• In Norway, EVs are exempt from VAT taxes and receive a 50% discount on toll roads and parking fees while ICE cars are subject to a 25% VAT, a CO2 tax, an NOx tax and a weight tax. As a result, Norwegian ICE cars are more expensive to buy and 75% more expensive to operate 

From: https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/eye-on-the-market/future-shock-amv.pdf

Nila24
Nila24
1 month ago

Good point.

Matt
Matt
1 month ago

The purchase taxes on conventionally powered cars in Norway is eye-watering. For reference, a few years ago I bought a BMW M140i new in the UK, and it cost around £32k optioned up. A Norwegian colleague noted that a similarly specced car in Norway would be over £70k equivalent because of the purchase/registration taxes. Offering electric cars free of these taxes is not the small discount it might be in just about every other country in the world.

Mark
Mark
1 month ago

So, essentially 100% cheap and reliable hydro power, a small population concentrated in a relatively few areas and most journeys within a feasible milk float range. It still requires this fantastic level of subsidy (i.e, piling massive costs on real cars) to even get to 50% milk float.

So that’s what a revolution looks like!

Phoenix44
Phoenix44
1 month ago

And I doubt if they do much long range driving at all in the winter.

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