As the push for cleaner energy continues, electric vehicles (EVs) have become the focus of many countries. In Europe, Norway is setting the pace. Last year, the northern European country recorded 54% electric vehicles in all vehicles sold. Thus, it became the first country in the world where electric vehicles accounted for more than half of all cars in the world.
And that’s good news for electric vehicles manufacturers who have been battling to win market shares in Europe. The 54% means huge revenue for everyone who plays the car market game well. And it’s Volkswagen, not Tesla winning the market this time.
Volkswagen’s luxury brand Audi led the market in 2020 with 9,227 of its e-tron vehicles in Norway, while Tesla, who led the 2019 market with its Model 3 was pushed into second place, with 7,770 vehicles, according to data from Norwegian Road Federation (OFV).
Norway introduced huge tax incentives to encourage the use of EVs as it aims to meet its 2025 target of zero-emission vehicles. The goal is to use the incentive to ensure that every new van and car purchased in the country is electric vehicle. It thus spurred the surge that has put the country ahead globally.
The CEO of OFV, Oyvind Solberg Thorsen said the record shows Norway is now ahead of schedule in meeting the 2025 target. Data published by OFV on Tuesday shows there is a 12% increase from the sales of electric vehicles in Norway in 2019. The surge has decreased combined market share of petrol and diesel vehicles which accounted for 71% in 2015, to just 17% in 2020.
Norway is the largest oil producer in Europe and has used the proceeds of its oil economy to develop a cleaner energy framework that will bring the country closer to its zero-emission target in the shortest time. Oil revenue helped build Norway’s $1.3 trillion Sovereign Wealth Fund which it has used to push the cause of renewable energy and gradually dumping fossil fuel.
The tax incentive introduced by Norway helps buyers get a huge discount when they buy electric vehicles and it has put the country in the leading position in the fight against vehicle emission. Other countries in Europe who set zero-emission targets are struggling to catch up with Norway. The United Kingdom has reviewed its 2035 target to ban the sale of new cars running on fossil fuel downward, setting a new date of 2030, five years earlier than the previous target. The review is believed to be as a result of Norway’s surprising success.
The Norwegian Electric Vehicle Association said besides the electric vehicle purchase subsidy, buyers enjoy other incentives including use of bus lanes, and reduced fees on state ferries and toll roads.
The Association said the country has 10,000 publicly available charging points, which eliminates the concern of many potential buyers of EVs. It thus throws the market open for a supremacy battle between Volkswagen and Tesla.
Norway on Wednesday, in the 2021 fiscal spending plan, extended its policy of zero tax on full-electric cars, providing a predictable market for automakers. Volkswagen thus predicts it will hit 90% EV sales next year.
“This allows us to be confident in saying we can hit 90 percent electric car sales next year,” said Harald A. Moeller, the Norwegian importer of VW Group cars, including the Audi, Skoda and Seat brands.
“Customers will have access to an even greater selection of electric cars in most segments in 2021,” he added.
This means, Tesla will need to work harder to win more market share in 2021 in Europe. But that seems far fetched as proximity appears to be working in Volkswagen’s favor. Tesla is yet to commence work in its giga-factory in Germany, which will provide distribution advantage for the American company in Europe.
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