The green transition: Norway leads the way in electric vehicles adoption

At the moment, one of the main themes in the automotive industry is the gradual switch to electric vehicles (EV), in order to fight pollution, climate change, and tackle the problem of fossil fuels scarcity.
After an uncertain start in the early 2000s, international trade flows of electric vehicles experienced a significant growth in the last decade. SIUlisse data¹ show an acceleration since 2014, as you can see from the graph below.

Major markets

In terms of EV sales, China is the undisputed leader: in 2017, more than half of the world’s EV sales took place there. The second biggest market in terms of sales was the US (17.2%), followed by Norway (5.4%).
As regards imports, since 2016 Norway is on the podium as world’s largest importer of EV. The interactive chart below allows you to analyze the evolution over time of electric vehicles imports on the major world markets: it shows not only the present ranking of the biggest importing countries, but also the main developments that took place between 2000 and 2018.

From the analysis of the 2018 ranking you can infer two interesting points:

• Norwegian EV imports exceed China’s, even if China’s sales of EV exceed those of Norway. This means that China is developing a significant domestic production capacity, while Norway relies on imports.
• Norway is the world’s EV largest importer, even if its population (5 million people) is much lower compared to the other countries on the podium (US and China, 326 million and 1.4 billion inhabitants, respectively). This means that the EV market share on new registrations is much higher in Norway compared to the other countries.
  According to the last data released by Norwegian Electric Vehicle Association, in 2018 battery electric vehicles (BEVs) reached a 30% market share and plug-in hybrids (PHEVs) recorded a 19% quota. If we consider them jointly, electric vehicles sold in Norway in 2018 amount to almost 50% of total car sales.

Going electric: public policies and incentives

Norway’s case study can be useful to investigate the main factors that sustain EVs’ adoption on a large scale. According to the paper “Electric vehicle capitals of the world” (International Council on Clean Trasportation), the key drivers for electric vehicles uptake are:

• financial and nonfinancial incentives;
• widespread presence of charging infrastructure;
• use of electric means of public transport, so that citizen can get familiar with the new technology;
• government research and campaigns.

In Norway, the first two factor have played a relevant role. Since 1990s, the country has put in place a solid system of incentives to foster the purchase of EVs and reach the “zero emissions” goal by 2025. Some examples of incentives still in force are the following:

• absence of purchase/import taxes;
• exemption from VAT on purchase;
• exemption from annual road tax;
• access to bus lanes.

Infrastructure is essential, as well. At the moment, in Norway there are more 10.000 public charging points, while in Italy, for example, there are just 3000 of them: this is consistent with the electric car fleet, which is still small in Italy. Even if the southern Europe country is the fifth largest importer of electric vehicles, last year registrations of alternative fuel cars have been lower than 10%; among these, electric vehicles amount to 0.6%, while LPG prevails. Unlike Norway, for Italy there is still a long way to go in the field of EV trasition.

1. You can access SIUlisse data through exportplanning.com, section Market Research>Analytics.