Norway might show the world what an all-EV car market looks like

Norway is on track to establish the world’s first fully electric car market due to valiant efforts to encourage EV purchases, Bloomberg reports. The EV uptake happened so quickly, only picking up over the last few years. Today, one of every four cars on the road in the country is either electric or hybrid, and last October, EVs accounted for 94% of new car sales in the country, a rate double that of China and way ahead of the rest of Europe.

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How are they doing it? The country’s accumulated oil wealth and successive governments with stable policy support to the sector played a key role. Policy support included eliminating value-added tax, allowing bus lane access, cheaper parking, and not charging EV drivers for ferries or tolls. Fuel stations have been replacing pumps with EV chargers, and a large variety of electric vehicles — around 160 models — has been made available to accommodate different preferences. Businesses also had to get on board or be left behind, fueling stations had to rethink their business models and repair shops have had to invest in high-voltage facilities.

Infrastructure was key: Norway’s grid operator had to expand networks’ capacity to accommodate the increasing electricity demand and build new transformers and stations in remote areas. Private sector players also supported the transition. For example, the convenience store chain Circle K — which owns hundreds of fuel stations across the country — made significant investments in charging infrastructure, adding over 1k charging stations, including the USD 140k fast chargers. At the moment, the country has over 29k public chargers, with an EV charger density of 1 for every 100 cars, way ahead of the UK’s average of 175 cars, for example.

Which countries may be next in line? 31 countries have reached their transition “tipping point” — identified as a point in which 5% of all car sales are electric, according to a Bloomberg Green analysis of 2023 data. On top of the list after Norway are four Scandinavian neighboring countries, Netherlands, Ireland, Belgium, Portugal, Switzerland, and China. From our region, only Turkey made it to the list after hitting the 5% mark in 3Q of 2023, and jumping to 12% in 4Q of the same year. Norway was the first country to hit that tipping point as early as 2013. Iceland was the second country to hit that threshold in 2019, six years after Norway.

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Why 5%? According to the analysis, hitting the 5% mark usually means that EV sales could jump to 25% in less than four years. It indicates that a market has entered “mainstream acceptance” and overcome early adoption barriers, such as cost and insufficient infrastructure. “More EVs popping up means more people seeing them as mainstream, automakers more willing to invest in the market, and the charging infrastructure expanding on a good trajectory,” says BloombergNEF EV analyst Corey Cantor.