„EV-Incentives Have Been Gradually Introduced”

Expert Interviews – Wednesday, January 15, 2020

Interview with Petter Haugneland, Assistant Secretary General of the Norwegian EV Association Norsk Elbilforening, about the Norwegian market for e-mobility

Every second car registered in Norway runs on electricity. What makes e-mobility so successful in your country?

Almost every second new car sold, runs on electricity, 44 percent so far in 2019, because people can afford them. Buying a car in Norway is expensive, as they are heavily taxed based on emissions and weight. An electric car can more or less compete when it comes to the price – because it is exempt from taxes. EV-incentives have been gradually introduced by different governments and broad coalitions of parties since the early 1990s to speed up the transition. The Norwegian success story is first and foremost due to a substantial package of incentives developed to promote zero-emission vehicles into the market.

What are the main reasons why people buy an electric car?

When we ask our nearly 80,000 members why they choose to by an EV, 77 percent answers lower operating costs, and 62 percent honor free/reduced fares in tollroads and 60 percent because the EV is environmental friendly.

The shorter ranges of electric cars do not play a role for the Norwegians in their decision?

Cars with long range are important for the Norwegian consumers, especially if it is the only car in your household. Tesla Model 3 is the number one selling electric car in 2019. In 2020, 20 to 30 new models will be on the market with long range and more affordable prices.

Where do people charge their cars: mainly at public charging points or at home and why there?

EV-owners mainly charge their cars at home, that’s the cheapest way. Almost everyone charges at home on a daily or weekly basis. Public normal charging points or fast chargers are mainly used on a weekly or monthly basis. 80 percent have access to homecharging and 14 percent have access to shared homecharging, according to our Norwegian EV owner survey 2019.

In Norway there are a number of discounts for electric mobility. Which government measures have proven to be particularly effective?

When you buy or lease an EV, there are no purchase tax and Zero VAT, that’s the most important incentive for buying an EV. When you own an EV you don’t pay annual road tax, and when you use your EV you pay max 50 percent on tollroads, ferries and public parking. As an EV-owner you also have access to bus lanes.

How has the high increase in the number of electric vehicles affected the power supply?

If all passenger cars in Norway where fully electric, they would only use 5-6 percent of the total hydro power production in Norway. The power grid has to be enforced for several reasons, and EVs could be a resource to do so by storing energy when the demand is low and provide electricity to the grid during peaks.

Package of incentives developed in Norway to promote zero-emission vehicles into the market include:

  • No purchase and import taxes (since 1990)
  • No annual road tax (since 1996)
  • No charges on toll roads or ferries (1997- 2017).
  • Exemption from 25 percent VAT on purchase (since 2001)
  • Access to bus lanes (since 2005). New rules allow local authorities to limit the access to only include EVs that carry one or more passengers (2016)
  • Exemption from 25 percent VAT on leasing (2015)
  • Fiscal compensation for the scrapping of fossil vans when converting to a zero-emission van (2018)
  • Parking fee for EVs was introduced locally with an upper limit of a maximum 50 percent of the full price (since 2018)
  • Company car tax reduction reduced to 40 percent (since 2018)
  • Maximum 50 percent of the total amount on ferry fares for electric vehicles (since 2018)
  • Maximum 50 percent of the total amount on toll roads (2019)
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