Norway Is a Model for Encouraging Electric Car Sales

At a time when the Volkswagen emissions scandal has helped expose the drawbacks of Europe’s heavy reliance on diesel cars, Norway has become a global model of how to get the public to embrace electric vehicles, an experiment that is attracting researchers and policy makers from around the world.

No other country can yet match Norway’s proportion of all-electric cars. Though still only 2 percent, the figure is double that of the runner-up, the Netherlands, and is growing faster than anywhere else in the world. More than one-fifth of new car sales in Norway are of electric vehicles.

Some skeptics wonder whether the Norwegian program is cost-effective, or even an efficient way to reduce air pollutants. And some elements of the program simply may not be replicable in other countries. But for many, Norway is showing a path forward.

“If there’s anyone in the world who should be using electric vehicles, it’s Norway,” said Julian Marshall, an associate professor of environmental engineering at the University of Minnesota. “That’s a place with clean energy.”

Ms. Nordgarden said she and her husband had made do for years with their bicycles, public transportation and a car-share service. It was the government program that induced them to choose a Leaf over a fuel-burning car two years ago.

Making Norway’s project to shift away from fossil-fuel cars all the more notable is the fact that the country is one of the world’s biggest producers of oil and natural gas. But it is also blessed with an abundance of fast rivers, allowing it to generate virtually all of its electricity from hydropower. That makes Norway’s electricity cleaner and relatively cheap — a further impetus for adopting e-cars. (A country where much of the electricity is generated by coal-fired power plants would not see as many environmental benefits from switching to electric vehicles.)

Proponents argue that electric cars are essential for a transition to a low-carbon economy, as they are vastly more efficient than conventional autos, transferring about 60 percent of their energy to the wheels. That compares with only about 20 percent for gasoline motors, which waste most of their energy in the form of heat.

To meet climate goals, “a large share of the new cars have to be electric,” Lars Andreas Lunde, the deputy minister of climate and environment and a Conservative Party politician, said in an interview. Because e-cars are more expensive to make than ordinary cars, “there have to be incentives,’’ Mr. Lunde said. “It has to be more expensive to pollute than to use environmentally friendly fuels.”

After more than a decade of government support, official projections had held that there would be 50,000 e-cars on Norway’s roads by the end of 2017. That number, in fact, was reached this past April, and by September had grown to 66,000 all-electric cars, and an additional 8,000 gasoline-electric hybrids like the Toyota Prius.

Rather than appealing to people’s environmental conscience, Mr. Lunde said, Norway decided to exempt e-cars from vehicle taxes that are among the highest in the world, including a sales tax of 25 percent plus a registration tax that averages more than $12,000, depending on vehicle weight, engine size, nitrogen oxide pollution level and carbon dioxide emissions.

To see how the subsidies translate to the showroom, consider Norway’s best-selling electric car this year, the Volkswagen e-Golf.

At the Moller Bil Ryen Volkswagen dealership in Oslo, a standard diesel Golf retails for about 330,000 Norwegian kroner, or about $40,000. After tax breaks, a comparably equipped version of its electric cousin, the e-Golf, sells for 250,000 kroner, or just under $31,000.

That price advantage would be lost in neighboring Sweden, which does not offer the same level of subsidies. There, the standard Golf would sell for less than $30,000, while the e-Golf would be closer to $40,000.

The cost of operating a car in Norway can also include pricey parking fees, high tolls for bridges and tunnels, and expensive ferry tickets. So e-cars were exempted from those, too. And it doesn’t hurt that fully charging a car battery from the grid costs the equivalent of only a few dollars, while gasoline retails in central Oslo for more than $6 a gallon.

Kasper Arnberg, 30, an Oslo psychologist who bought a Nissan Leaf two years ago, said he and his wife, Camilla Herbern — also a psychologist — had been “idealistic,” in that environmental concerns influenced their decision to go electric.

“But my wife made an Excel spreadsheet,’’ Mr. Arnberg said. And after factoring in tax breaks, fuel costs, tolls, parking and all, “the Leaf came to about half the price” of a gasoline-powered car, he said.

Christina Bu is head of the Norwegian Electric Vehicle Association, which advocates for both consumers and manufacturers. “People aren’t so green that they want to pay a lot extra to buy an electric,” she said. The Norwegian system works, Ms. Bu said, because “it’s constructed to make the least-polluting cars the most attractive.”

Mr. Arnberg, like many Norwegians interviewed for this article, bemoaned the fact that the country’s vehicle-charging infrastructure had not kept pace with the number of new electric cars on the road. It is an issue that plagues other places that have embraced e-cars, including California, where the competition for public plug-in sites sometimes grows hostile.

Oslo now has only about 700 public charging spots, although city officials aim to raise that to above 1,000 before the end of the year. For most people, that means most of their charging is done at home.

City and regional governments in Norway, meantime, have started to complain of a revenue shortfall from all the free-riding e-cars that are not paying fees and tolls.

Mr. Lunde, the deputy climate minister, said changes to the program were inevitable, including more power for local authorities to set rules governing e-cars and phasing out the sales tax exemption. “The incentives were always meant to be temporary,” he said, “just until we achieved a certain market share.”

Some critics say Norway is not getting its money’s worth from the program.

Anders Skonhoft, an environmental economist at the Norwegian University of Science and Technology, estimates that the total value of subsidies works out to about $13,500 a year per electric car over each vehicle’s life. But for all the money Norway has put into the program, he said in an interview, the country has cut its carbon dioxide emissions by no more than one-tenth of one percent.

If the main goal is clearing up unhealthy pollutants at the local level, Mr. Skonhoft said, it would make more sense to discourage the use of diesel engines. But he noted that Norway, like many other European governments, effectively subsidizes diesel fuel by taxing it at a lower level than regular gasoline. As for greenhouse gases, he said, it would be more effective, and cost far less, simply to impose a carbon tax, discouraging use of traditional cars by requiring drivers to pay more to pollute more.

Mr. Lunde acknowledged that “there’s a discussion of whether it’s too expensive.” But, he said, “it’s difficult to criticize in economic terms, because the value of clean air in the city center is difficult to quantify.”

Ms. Bu, of the electric vehicle association, said her group hoped that the incentives would last long enough to change the way people think about transportation. “If we can continue like this until 2020, we will change the car industry,” she said.

And proponents say one near-term spark to e-car sales could be the Volkswagen scandal, in which the German company outfitted 11 million cars — including nearly 150,000 in Norway — with software meant to deceive emissions testers.

Mr. Lunde said some environmentally minded consumers might come to believe that all the automakers were cheating.

“If you buy an electric, at least you’re safe,” he said. “There are no emissions.”

by David Jolly | The New York Times

(Oct. 16, 2015)


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