How Norway created a structure & culture around EV vehicles

Finance Minister Nirmala Sitharaman on Friday announced a slew of incentives to promote buyers and sellers of the electric vehicle (EV) industry in the form of income tax rebates and reduction of GST from 12% to 5% in a bid to give a fillip to zero emission vehicles.

However, the Scandinavian country Norway, started promoting emission-free vehicles since the early 90s and today EV vehicles have more than 50% of the market share in the country.

The Norwegian Parliament has decided on a national goal that all new cars sold by 2025 should be zero-emission (electric or hydrogen). As of May 2018, there are 2,30,000 registered Battery Electric Cars (BEVs) in Norway. Battery electric and plug-in hybrid vehicles together hold a 50 % market share.

The most important part of the EV policy is a car tax system that promotes zero emission cars. If you buy a new car in Norway, there is a higher tax for polluting cars based on the emissions that they make. There is zero tax for zero-emission cars. Electric vehicles are comparatively cheaper or their price is at par with gasoline or diesel. Toll is free and parking is at 50% of standard costs.

Industry experts opine that it is a win-win game. "Car dealers and manufacturers are benefitted by the long term policy. They can invest without risk. This makes Norway the leading market in the world for EV cars. It reduces fuel emissions and brings down pollution in the city," said Petter Haugneland, Assistant Secretary General, Norwegian Electric Vehicles Association.

However, beyond tax cuts, the trend grew due to behavioural changes brought about among Norwegians. Norway is a power surplus country with a 100% renewable hydro-electricity grid. EV owners were satisfied and happy as electricity cost was low. The tax system just promoted it and made it affordable.

If a vehicle is charged at home, it costs a Norwegian 1 Norwegian Krone or Rs 7.96 for One Kilowatt hour, which becomes 4 Norwegian Krone or around 32 rupees for One Kilowatt if charged on a private charging station.

Norwegians charge their cars when they are working or at night. On highways, there are charging stations as well. However, Haugneland opines that the country could do better with more charging stations. Currently, there are 10,000 publicly available charging points where 1,500 cars can fast-charge at the same time.

Norway-based marketing professional, Ashish Sahoo thinks that both price and pollution are touch points that drive people's preference for EV cars.

"I rent electric cars because they are cheaper than petrol cars, plus the additional incentives such as no toll charges, parking, etc," said Sahoo, Marketing Manager, Cambi, Norway.

It is notable that the Norwegian Parliament plans to reach this goal with a strengthened green tax system, and not a ban.

Behavioural Change

Beyond tax cuts, the trend grew due to behavioural changes brought about among Norwegians. Norway is a power surplus country with a 100% renewable hydro-electricity grid.  EV owners were satisfied and happy as electricity cost was low. The tax system just promoted it and made it affordable