Norway leads the way on electric cars: 'it's part of a green tax shift'
Nearly a third of all new cars sold in the country this year will be plug-in models, and experts expect that share to jump
Electric cars parked in Oslo. Photo.
As tourists explore Oslo's history in the foundations of the centuries-old Aerschus Fortress, the city's future is heralded beneath their feet.
Here in the catacombs are dozens of Teslas, Nissan Leafs and BMW i3s, all plugged into the charging point of the world's largest public electric car garage.
Walter Mauling is on his first visit to the garage and is excited about the opportunity to park and charge his electric VW Golf for free. "We're in the future," he says.
Norway is the undisputed world leader in electric vehicles, driven almost entirely by the country's rich hydroelectric resource. Almost a third of all new cars sold in the country this year will be a plug-in model - either all-electric or hybrid - and experts expect this share to rise to 40% next year.
The Capital is a look at what's in store in the UK, where electric cars account for just 2% of new car sales, but registrations are growing at a rapid rate, to 38% this year. In Oslo, the streets are filled with quiet, gliding cars, from large ones like the Tesla X to smaller models like the Renault Zoe. For the drivers of these cars, the motivation is simple - they just make financial sense.
Norway's lead on electric cars has been driven by the government to support them with a wide range of generous incentives and benefits to meet its climate change ambitions. Buyers pay no import tax and no VAT on plug-ins, shaving thousands of pounds off the initial cost. Running costs are lower because electricity is cheaper than petrol and diesel and road tax has been cut - and will fall to zero next year.
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Electric car owners do not pay the patchwork of road tolls, ferry fees and city emission charges that other Norwegians face. They can also park for free and bypass traffic by driving in some bus lanes.
"For my type of driving, it's perfect," says Vibek Kron, the pension fund's executive director. She uses a Mercedes B250e, which replaces an old diesel, to drop her kids off at school, drive to work and run errands.
"We have one [gasoline-powered] car that we drive in the mountains and a small electric grid for the city," says Kron, who works from home and says her only complaint is that there are no more public charging points.
Despite the successful deployment of electric cars in Norway, there is no guarantee that there will continue to be political support for battery power. The government topped headlines in October with its proposal to end tax exemptions for the heaviest electric cars in 2018, quickly dubbed the "Tesla tax" as it would initially only affect two Tesla models.
For Jørgen Næsje, a minister in Norway's finance department, the rationale was simple. "[Those] people who have the money to buy these very expensive and heavy cars can afford to buy some import taxes," he told the Guardian, adding that the party did not see cars as a "cash cow".
But electric car advocates say the change is too soon and the minority government's partners forced it to cancel the measure during negotiations on the tax package. Christina Blue, the secretary-general of the Norwegian Electric Vehicle Association, said the change would hamper adoption of new large family models that are needed and will hit the market next year, such as the Jaguar I-PACE.
"Norwegians like to buy big cars because they want to go to the mountains and things like that. If you want to go to 100% share, you have to help electric cars in the large segment," she says, referring to Norway's target of 100% of new zero-emission cars by 2025.
Victor Irle, market analyst at EV-Volumes, which tracks electric car sales globally, says demand in Norway is currently so high that there are months of waiting lists for new models such as the I-PACE and Hyundai Ioniq.
Ending the exemption for heavier vehicles would make sense in the years to come - but it would shake up the market, he says, adding, "I think it's important to show stability from a political point of view."
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Ola Elvestuen, the deputy leader of the Liberal Party, was pleased that the Tesla tax proposal was defeated, but acknowledged that government support would have to be withdrawn eventually. "Over time, gradually, EV owners have to start paying. But it has to be done in such a way that you don't stop the transition," he says.
Elvesuen is also relaxed given that the fuel tax is falling as electric cars dominate, arguing that the overall effect will be revenue neutral as taxation moves to other parts of the economy.
"Of course, the government needs its revenue.
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