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.”
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.
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.