Battery-powered vehicles accounted for almost four out of five new cars sold in Norway throughout 2022, setting a new record, with Tesla the top-selling brand for the second year in a row, registration data showed Monday.
Yet some in the industry say new taxes could thwart the Scandinavian country’s goal of becoming the first to end the sale of petrol and diesel automobiles by 2025.
Elon Musk's electric-only Tesla sold more cars in Norway than any other brand for a second consecutive year, clinching a 12.2% share of the overall market ahead of Volkswagen with 11.6%, registration data showed.
While China is by far the biggest car market overall, Norway with its 5.5 million inhabitants, has achieved the world's highest proportion of electric vehicles with the help of generous subsidies, making it a proving ground for automakers launching models.
The share of battery electric vehicles (BEV) sold rose to 79.3% of all new cars in 2022 from the previous record of 65% in 2021, up from 2.9% a decade ago, the Norwegian Road Federation (OFV) said. Some 138,265 new electric cars were sold in the Scandinavian country last year.
In comparison, electric cars made up just 8.6% of new car registrations in the European Union over the first nine months of 2022.
The Tesla Model Y was the single most popular model of the year in Norway, ahead of Volkswagen's electric ID.4 in second place, and Skoda Enyaq in third.
Seeking to end the sale of petrol and diesel cars, oil-producing Norway has until now exempted battery electric vehicles from taxes imposed on rivals using internal combustion engines.
"Eight out of 10 people choosing fully electric instead of combustion engines is a considerable step towards Norway reaching its climate goal of 100% BEV sales in 2025," said Christina Bu, Secretary-General of the Norwegian Electric Vehicle Association.
About one in five cars on Norwegian roads are currently electric. Norway aims for all new cars to be "zero emission" – in other words, electric and hydrogen – by 2025.
"Our message to the rest of the world is crystal clear: Now there is no excuse for the internal combustion engines' unnecessary pollution when the climate crisis is so urgent to solve," Bu said in a statement.
But while tax exemptions help cut emissions, they cost the state 39.4 billion Norwegian crowns ($4 billion) in lost revenue in 2022, the Finance Ministry said, and the center-left coalition government is seeking to curb benefits for high-end vehicles.
Those who bought an electric Porsche Turbo S last year would have paid at least 1.7 million Norwegian crowns, but if it had been taxed like its petrol-fueled equivalent, the price tag would have been above 2.1 million.
A new auto tax based on weight could also negatively impact the sale of BEVs as electric engine systems are heavier than their fossil-fueled equivalents, said the Norwegian Automobile Federation (NAF), an interest group representing car owners.
"We are concerned that the sales will drop because the government has proposed a new tax based on weight," NAF spokesperson Thor Egil Braadland said.
The government has also failed to sufficiently address one of the main practical problems for electric car owners, which involves charging stations and how to pay for their use, he said.
"You need 10-15 apps to be a well-prepared EV owner in Norway, and we know that many are delaying their purchase of an EV because of that," Braadland said.
NAF is pushing for an "e-roaming" solution that would enable users to pay at all charging stations without needing multiple apps.
The government defended its policy for electric vehicles.
"The electric car has become the new normal car for Norwegians, and that means we have to look into how we are using society's funds," Labour's Johan Vasara, a state secretary at the Norwegian transport ministry, said.
"We are very confident that the electric car is here to stay," Vasara said, adding the government needs to focus its measures on other transport segments, including heavy goods vehicles.