How Norway Became The EV Capital Of The World -- Lessons For America
Norway didn't invent the electric vehicle. It isn't home to Tesla, the EV pioneer, either.
But it is the EV capital of the world, offering valuable policy lessons for others to follow, including the U.S.
According to Statista, Norway has 81 EVs per 1,000 residents. The figure was well ahead of Iceland, which came in second with 36.8 EVs and far ahead of the U.S., which came in eighth with 5.2 EVs.
Residents of areas that have fewer gas-burning automobiles on the streets know the perks: less pollution and less noise. EV drivers aren't suffering the anxiety of higher gas prices that crush family budgets, as has been the case in most countries worldwide, including the U.S.
How did Norway do it?
Norway has used a package of incentives far more comprehensive, more generous and more consistent than the U.S. These incentives have made it a far more appealing proposition than gas-fueled vehicles.
Scott Case, CEO of data science company Recurrent, told International Business Times about the other benefits, beginning with acquisition costs. Norway has zero or reduced import taxes, VAT and an effective carbon tax.
"They made EV-acquisition costs competitive upfront for years compared to conventional automobiles," he said. "The U.S. has sort of done this with the federal EV tax credit and some state sales tax reductions, but those are phasing out long before EVs reach saturation. Norway is still going strong even at 80% of new sales EV."
Then there's the cost of operating the EVs.
"Norway made EV ownership a better and cheaper experience, with zero or reduced annual registration fees, toll fees and parking fees, continuing today," Case said. "The only state that had anything comparable was California with its carpool lane access decals, which have been getting phased out since 2018 but were responsible for tons of early adopters who simply wanted to avoid traffic jams. On the contrary, most states are adding [or considering adding] EV-specific costs to annual vehicle registrations since road maintenance is largely paid for via gasoline taxes."
As it did with acquisition costs, Norway kept operation incentives in place rather than scaling them down as the U.S. did.
"So, incentive-wise, the U.S. has done comparably little and is pulling even those measures before EVs crack 5% of vehicles on the road and instead is looking towards ICE sales bans in 2030 and 2035," Case said. "Norway has stuck with its incentive packages through close to universal adoption and won't even need to employ an ICE ban in coming years. No one in Norway wants to be the last person to buy a combustion engine vehicle that'll have no resale value in 5-10 years."
What does all that mean for the U.S. EV policy in the future?
First, to catch up with Norway, the U.S. needs to do more to lower the cost of acquiring and operating EVs. Second, the U.S. needs to keep these incentives as EV adoption grows.
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