Tesla leads EV race in Norway as it aims to end combustion engine cars in two years

Elon Musk’s all-electric Tesla sold more cars in Norway than any other brand for the second year in a row, with a 12.2 percent share of the overall market ahead of Volkswagen AG’s 11.6 percent, registration data showed.

While China is by far the biggest car market, Norway, with its 5.5 million inhabitants, has the world’s highest proportion of electric vehicles helped by generous subsidies, making it a testing ground for automakers to roll out models.

Sales of battery electric vehicles (BEVs) will rise to 79.3 percent of all new cars by 2022 from 65 percent in 2021, up from 2.9 percent a decade ago, the Norwegian Road Federation (OFV) said.

The Tesla Model Y was the single most popular car of the year, ahead of the Volkswagen Electric ID.4 in second and the Skoda Enyaq in third.

In an effort to end the sale of petrol and diesel cars, oil-producing Norway has until now exempted battery-electric vehicles from taxes on rivals that use internal combustion engines.

While the tax breaks help reduce emissions, they cost the state 39.4 billion crowns ($4 billion) in lost revenue in 2022, the finance ministry said, and the center-left coalition government is seeking to cap gains from premium cars.

Those who bought an electric Porsche Turbo S last year had to pay at least NOK 1.7 million, but if it were taxed like petrol cars, the price would be more than NOK 2.1 million.

The Norwegian Automobile Federation (NAF), an interest group representing car owners, said the new weight-based car tax could also have a negative impact on BEV sales because electric engine systems are heavier than fossil fuel systems.

NAF spokesman Thor Egil Braadland said: “We are concerned that sales will drop as the government proposes a new tax based on weight.”

The government has also failed to adequately address one of the main practical issues facing EV owners, which involves charging stations and how to pay for their use, he said.

“In Norway, you need 10-15 apps to become a fully prepared EV owner, and we know many people put off buying an EV because of this,” Braadland said.

NAF is promoting an “e-roaming” solution that would allow users to pay at all charging stations without multiple apps.

The government has defended its EV policy.

“Electric cars are the new normal car for Norwegians, which means we have to look at how we spend society’s money,” said Johan Vasara, State Secretary at the Norwegian Ministry of Transport.

“We are very confident that electric vehicles are here to stay,” Vasala said, adding that the government needed to focus its measures on other transport sectors, including heavy goods vehicles.

First published date: Jan 3, 2023 at 09:04 AM CST