Norway’s simple but ultra-effective electric vehicle policy

Thanks to an incentive programme based on the “polluter pays” principle, more than 90% of new cars sold in Norway are now plug-in electric.

It’s a strategy that could be replicated across the world, including in developing nations, as it doesn’t require fiscal tradeoffs, Petter Haugneland of the Norwegian EV Association tells me.

Under the policy, buyers of large fuel-guzzling cars pay high taxes, essentially subsidising purchases of low-emissions alternatives.

How it works: Vehicle emissions taxes are calculated based on each car model’s weight and carbon dioxide and nitrogen oxide emissions. The tax is progressive – meaning big sports utility vehicles (SUVs), which are the most polluting, take the hardest hit. Buyers of small, entry-level petrol and diesel cars aren’t overly affected.

EVs have also been granted exemptions from value-added tax (VAT), with the result being that they’re often cheaper to buy than traditional cars – even though they’re more expensive to manufacture (for the time being).

Considering that they’re also cheaper to operate and service, this means it simply makes financial sense to buy an EV.

In the early days, the state helped to install some basic charging infrastructure, but once the EV market gained traction, private companies took over.

Now, nearly a quarter of all passenger vehicles in the country are electric, and they have access to an extensive charging network.

Importantly, the growing share of electric vehicles in the transport mix won’t strain the country’s electricity grid, Haugneland says. Even if every car was electric, EVs would only use about 5% of the nation’s electricity.

Yes, but: While EVs produce less lifetime emissions than fossil fuel-powered cars, they are not as sustainable as cycling and many public transport options, which should’ve been the top priority, according to some experts.