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Electrified Nation

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For years now, Norway has been collecting experience with electric vehicles on a large scale. How does e-mobility work in this Nordic country, and how can this be transferred onto other countries? An assessment.
Erik Figenbaum , July 03, 2018
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Erik Figenbaum is a researcher of the Norwegian Institute for Transport Economics (TØI) in Oslo, an independent and privately owned research institute, based on a foundation.
Norway is the global leader in electric vehicle adoption per capita. More than eight percent of the cars in the national fleet are rechargeable. Two thirds are battery electric vehicles (BEVs), the rest are plug-in hybrids (PHEVs). Since the 1990s, Norway has been supporting the BEV market through exemptions in purchase tax, road toll, parking charges, and by bus lane access. PHEVs have fewer incentives, but are more attractive than diesel vehicles. Together, they facilitate a gradual shift to e-mobility.

The substantial tax exemptions have made BEVs the cheapest vehicles to buy, and this advantage becomes directly visible in the sales price. Multi-vehicle families, the main adopters, find BEVs economic to use and face only few barriers. They park and recharge their BEV on their own land, and can use their other vehicle for driving long distances. If other countries are able to reach the same group with suitable incentives, a market pull will be created, leading to a steep increase in BEV adoption.

But Norway has other favorable conditions. Diesel is expensive and electricity is cheap, and 98 percent based on emission-free hydropower, so the emission benefit is huge. This benefit has also been realized at EU level, as electricity production is part of the EU greenhouse gas emission trading system, whereas transportation is not. Low motorway speed limits in Norway reduce energy consumption and preserve the range, whereas cold winters reduce the range by 25 percent compared to summer driving. The Norwegian grid is robust enough to handle charging, as we use electricity for space heating. Countries with less robust grids will need policies that are capable of cushioning electricity peaks resulting from charging loads. 94 percent of Norwegian BEV owners charge at home in their own parking space, and many only drive locally, hence getting by with home charging.

On long distance trips users will, of course, need to recharge – unlike diesel car owners, who can fill up for the entire trip. It will be expensive to operate a fast-charging infrastructure meeting all needs for long distance driving on peak travel days. On-street charging is another big challenge inhibiting BEV ownership in densely populated cities. The municipality of Oslo installed chargers in parking blocks and in the streets, but struggles to keep up with the demand. Other mobility services could act as supportive measures preserving mobility in crowded city centers. Battery life is not yet an issue in Norway – maybe, because our summers are not that hot. Heat however, is the main factor in degrading battery life. When the battery capacity is decreasing, BEVs will most likely continue to be used by less demanding users, until the end of the vehicle life.Then, the batteries are handed in for recycling, organized by the vehicle importers, and subsidized by a 300 Euro scrappage bonus.

Norway has proven that BEVs can sell well in a mass market, and the vehicles can easily be integrated into the overall vehicle fleet by multi-car households. The Norwegian e-mobility incentives have created a powerful bottom-up market pull, whereas governments in countries like Germany focus more on policies creating a top-down market push. The bonus to German BEV buyers introduced last year seems less effective than originally expected and may hence, need to be increased in order to have a real impact on their purchasing behavior.