Update: Reader Kåre Kristiansen comments below that electric vehicle owners also get “free electricity for electric cars at some public charging places and no payment for an electric car on ferries.”
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Germany’s online daily TAZ has an article on how an electric car has reached the No. 1 position when it comes to new car registrations in Norway. This will certainly cause tree-huggers globally to run out and praise the Scandinavian country as a model of green, responsible living and demand that the rest of the world adopt its way.
Nissan Leaf no. 1 seller in Norway. Photo source: M 93, licensed under the Creative Commons Attribution-Share Alike 3.0 Germany license.
The TAZ writes that the Nissan Leaf took the number one spot in new-car registration in the Nordic country in both September and in October, reaching a market share of 5.1% and 5.6% respectively. And because almost 100% of Norway’s electricity comes from hydro-electric power plants, transportation with an electric car is practically carbon-neutral (so long you do not look at the car’s manufacture).
Norway is the first country in the world to be able to boast having an electric car as the no.1 seller. The TAZ reports that the electric car market in Norway has doubled in one year alone and that 50,000 electric vehicles will be registered in the sparsely populated country by 2016. That would be about 2% of the country’s entire fleet.
Made attractive with $90,000 in subsidies
So why all the success in Norway? Has there been some kind of technological breakthrough that has made electric cars attractive to consumers? The answer is no.
All the good news ends as soon as you take a look at the price tag that’s been attached to entice consumers to buy the electric vehicles. It’s a whopper.
The TAZ writes that each vehicle gets subsidized to the tune of up to €70,000 per car (more than $90,000). So do not expect to see too many environmentalists running around preaching the virtues of the Norwegian electric car model. Very few countries, even among the rich ones, are able to afford that kind of money.
So what do all the subsidies include? First the TAZ writes that buyers are exempt from paying Norway’s notoriously formidable 25% value added tax on the purchase of the vehicle. Moreover they are also exempt from paying the registration fees, import duties (Norway doesn’t have a domestic auto manufacturer), and buyers are allowed to deduct more expenses with e-cars when filing their income taxes. Furthermore, electric vehicle owners are exempted from paying tolls on highways and bridges.
Another perk is that electric car drivers also are free to use bus lanes in bigger cities. Everything together tallies up to big money. The TAZ writes:
Calculations showing that state coffers subsidize buyers of luxury electric cars like the Tesla S to the tune of 60,000 to 70,000 have sparked a debate on whether or not the state subsidies are exaggerated.”
Norway’s prosperity stems largely from oil and gas
Ironically Norway’s high standard of living is in large part due to its huge North Sea reserves of fossil fuels, mainly gas and oil, which have been exploited over the last decades. What made Norway rich is today being villianized. Gas and oil are what has helped to make the country prosperous and made it possible for the country to afford its current foray in costly electric cars.
How much would it cost the USA to adopt and implement Norway’s model, ignoring the cost of expanding the electric power generation needed to charge the cars? According to Wikipedia there are approx. 250 million cars on the road in the USA. Subsidizing every electric car with say $50,000 per car in order to replace the fossil fuel cars would produce a price tag of $12.5 trillion – an astronomical sum of money. Never mind the monumental technical problems involved.
The sheer size of the subsidy needed to get people to buy the electric vehicles alone tells you that they have a very long way to go before they make any economic sense. In fact, technological progress in the improved design and efficiency of internal combustion engines have resulted in far greater fuel savings than any green energy subsidy program has ever yielded thus far.
More on Norways’s electric cars here in English.
What are the export opportunities?
As a German, you can shop anywhere in the EU. What is there stopping you popping over the border and getting one?
We wouldn’t be able to use the tax deductions and toll road perks.
This is a wonderful example of how the modern ultratax state can control its citizens simply by exempting some activities from the plundering.
Imagine what economic activities would be possible were it not for the 50% of GDP public sector in Germany and the theft financing it.
Hello Pierre
You are wrong with regards to subsidies on purchases of electric cars in Norway. We do not do that. The only subsidies we do have is free electricity for electric cars at some public charging places and no payment for an electric car on ferries.
The advantage an electric car has in Norway lies not in subsidies, but in absence of taxes, absence of parking fees, absence of toll payments on roads. Absence as in 0 tax. Add access to bus lanes and you have a winner, the last part might save you two hours a day if you are commuting in our capital, substantially less in other parts of Norway.
For me, absence of toll payments and free parking is in the order of 3000 € a year. Add in absence of fuel taxes, and you are closer to 4000€ a year.
We punish all other motorised vehicles.
By the way, thank you for an excellent site!
Depends on definition of a subsidy. I feel here a quarrel exists simply because two different people have different definition for a term. The TAZ and I feel that exemption from a tax is a subsidy. It appears you don’t think the same way. Exemption from taxes for certain behavior is a subsidy. You say yourself in your case you’re saving €4000 per year (i.e. the government is forgoing €4000 per year).
Overall I’m quoting the German TAZ, which I think here in this case is reliable. Any disagreements on the meaning of the word “subsidy” you may have should be directed to the TAZ.
There is another side to this. Very many e-car owners have an SUV or similar as well, and use their e-car for commuting from suburbs. Instead of using public transport. It is an ongoing debate in Norway about how long these benefits can be prolonged. Already bus companies are complaining about congestion in bus lanes, and some tens of thousands more e-cars will most likely put a stop to this advantage.
Many people in Norway think one should concentrate on shifting commuter traffic from private cars (including e-cars) to public transport, instead of giving privileges to one type of cars.
Again this is a system where the state rewards one small group for entering into a contract by punishing the others who don’t. This is a negligent interference into the free market that eventually becomes unsustainable.
Typical 19th Century Karl Marx thinking. Everyone has the right to an acre of land to plant his own potatoes with his own donkey. And when he want to take his potatoes to market, the state will lay on a bus for him.
In South America (Brazil) they had a military dictatorship which broke the back of the old established parties. When civilian rule returned new parties with new agendas were formed. Some guys realised that more than 50% of the population own motorcars and started politicking on that basis, promising new motorways, etc. should they get elected. The city of Nova Lima is a prime example of urban renewal and new motorways being built.
What we need in Europe is motorcar motivated political parties.
The Socialists just enjoy public transport and all the union members it entails. They can hold the government to ransom with the treat of a strike. They cannot do that with motorways unless their union members block the motorways – a favourite trick in France. Once a motorway is built, the union member involvement is nearly zero, and that the socialists, who want to meddle in every aspect of a citizens life, hate!
“What we need in Europe is motorcar motivated political parties.”
Maybe start with introducing democracy first.
I am not sure I agree with this democracy thing anymore. It leads in principle to what the majority want for themselves. The only ideology is that everyone “thinks” they have a voice, but it is clear that one man’s democracy is not the others. It seems as though the democracy that is “demanded” across the world is really just a mechanism for gaining control.
Part of the control mechanism is to make people believe in something that they will then vote for. Once the people “believe” then it is hard for an opposition to oppose the given belief system so it tries to improve it, or show the weaknesses of the other parties view of it.
“Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” Churchill.
So we are stuck with this in whatever form it takes, though most of those who know anything about it know it doesn’t really exist. See the EU parliment for example.
“Part of the control mechanism is to make people believe in something”
Well, and who makes them believe? Corrupt and censored media. Those would have to go; I’m looking at you, ARD and ZDF. They were less bad before the EU decreed its hatecrime laws. So the media we have now are already dictatorship media; which explains the complete dumbing down of the Germans.
“Almost 100% of Norway’s electricity comes from hydro-electric power plants”
But with connected grids between countries, that means somewhere else fossil fuel has to be burned to compensate for hydropower consumed instead of exported.
I suppose it is impolite to ask how this is going to be of any benefit to Norway. Is this supposed to keep sea level rise from flooding parts of the country? Is there fear of an invasion of Palm trees? Have they nothing better to do with this massive subsidy?
Sea level rise is not a problem for Oslo: http://www.psmsl.org/data/obtaining/stations/62.php. The country is actually rising.
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