The Australian sales penetration of full electric cars (EVs), plug-in hybrids (PHEVs) and even conventional series hybrids is among the lowest of any mature market.
This goes quite contrary to Norway, which is a world leader in encouraging sales of vehicles with an element of battery propulsion. Locals refer to it as a “lab” for the rest of the world to watch.
The country — ironically hugely wealthy thanks in large part to its massive oil and gas reserves — has a national policy that makes buying greener vehicles not only a conscionable choice, but also a more economically sensible one.
The net result so far has been a surge in the sales of EVs, PHEVs and hybrids, which now represent 50 per cent of the market’s car and SUV sales. The breakdown is 18 per cent of the market for EVs, 18 per cent for PHEVs and 14 per cent for hybrids.
In 2011, 76 per cent of passenger vehicles sold there were diesel. Now it’s 25 per cent, as the government becomes more aware of the danger of NOx emissions.
The current mid-term aim is to tax internal combustion vehicles out of the market by 2025, earlier than anywhere else, though how it plans to service rural areas in the north that favour diesels is clearly a very thorny issue.
The key way that governments there — the plans are broadly supported by all but fringe parties — have made alternate-fuelled vehicles attractive has been to adjust the tax system.
Norway’s vehicle taxes are high, far higher than neighbour Sweden’s. The old joke is that “you buy one car for yourself, and another for the government” with each purchase.
For instance, a Mitsubishi Outlander diesel costs 519,600 Krone (about $80,000 Australian) at retail level, to which the government adds about 200,000 Krone in taxes.
These prohibitive imposts are on the cars’ weight and CO2 emissions on progressive basis’, plus there’s a linear tax on NOx outputs, on all internal combustion vehicles.
On the other hand, those who buy an electric car or a plug-in hybrid get a substantial discount. The RRP of an Outlander PHEV in the same spec costs 461,700 Krone, and attracts only 5000 Krone in taxes.
Then there’s the free parking, reduced registration, absent toll fees and dedicated fast lanes for EVs and plug-ins, and the large charging infrastructure on tap.
To cater for the ever-increasing numbers of electric vehicles on its roads, the Norwegian government has launched a program to fund the installation of at least two multi-standard fast-charging stations for 50km on all major roads by the end of 2017.
By 2020 the country hopes to have one charging point for every 10 electric cars – which means around 25,000 chargers if EV sales reaches Norway’s forecast 250,000 EVs by the end of the decade.
Put another way, a staffer at Mitsubishi in Norway, who we were interviewing on our recent visit as guests of the company, told us that many Norwegians had no idea that a Tesla Model S was an expensive car in other markets, as it's comparatively affordable there.
Is this all motivated by the goodness of Norwegians’ hearts? We asked many locals who of course often took pride in their nation being a world-leader in EV proliferation.
Yet none said they weren’t motivated by the tax breaks first and foremost. The key lesson is to make EVs, PHEVs and hybrids more cost-effective, and the market capitalises.