Norway to World: Our Generous Electric Car Policies Might Not Work for You (If You Have a Dirty Electrical Grid)

Despite having a total population of just over 5 million people — smaller than the population of Metro Atlanta — the Kingdom of Norway has the highest electric car adoption rate of any country in the world, with electric car sales now accounting for more than fifteen percent of all new cars sold.

That huge market share is thanks in part to Norway’s generous electric car incentives, which include exemption from sales tax, permission to drive in bus lanes, and free parking and charging in most of Norway’s towns and cities.

Norway loves electric cars, and now it is home to the world's largest universal rapid charging station complex.

Norway loves electric cars, but its incentives only work in a country where most of the electric grid is powered by renewables.

But while Norway’s generous incentives might work in Norway, they might not work elsewhere in the world, warned Norway’s Minister of Transportation, Ketil Solvik-Olsen back in February during an interview with (via ecomento). 

“Our experience might not work in countries with a strong automobile industry,” he said of Norway’s electric car incentive program. “We succeeded in increasing electric car sales, because we kept high taxes on regular cars and cut taxes on electric cars.”

Essentially a carrot and stick approach, Norway’s car tax system rewards those who drive smaller, more efficient vehicles by charging them a lower sales tax than those who drive large-engined, low-mpg cars like SUVs or high-performance sports cars. Buy a high-end luxury Porsche for example, and you’ll find yourself paying sales taxes that are equal to one hundred percent of the pre-tax sticker price.

Because they have zero tailpipe emissions, electric cars are exempt from sales tax, representing a triple-whammy for all involved: car companies sell more electric cars because they don’t have a massive sales tax; car buyers find their car-buying budget goes further with no tax to pay; and Norway removes heavy-polluters from the road and replaces them with electric cars.

 Norway loves the Tesla Model S

Norway loves the Tesla Model S

Yet it’s that last fact — combined with Norway’s incredibly green electrical grid — which makes Norway’s electric car incentives work in Norway, said Solvik-Olsen. Try to replicate Norway’s electric car incentives in places where the electrical grid is less green, he said, and the net effect would simply be one of moving pollution.

Before electric car mass-adoption can be entertained, the electricity grid must be made greener.

“Norway has a surplus of energy from the hydroelectric power plants because we are building a lot of wind farms and hydro generators,” he said. “But if countries start building power plants to feed the electric car grid, shifting from car to plant emissions, it might not be worthwhile.”

In other words, electric car mass-adoption must be part of a wider adoption of greener, sustainable solutions to modern life in order to provide the maximum benefit, something we’re sure many of our readers have thought for some time.

Do you agree with Solvik-Olsen? Do you think plug-in car incentives could help even where there’s a massively dirty electricity grid?

Leave your thoughts in the Comments below.


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