What the U.S. Can Learn from Norway’s Electric Vehicle Policy Innovation
By Aaron Tinjum
In 2006, film director Chris Paine posed a straightforward question in his award-winning documentary: who killed the electric car?
Fast forward ten years and global electric vehicle sales (EVs) have skyrocketed, thanks in large part to one small, Scandinavian country: Norway. Nearly one-quarter of all new cars sold in Norway are now plug-in electric vehicles (PEVs). While EVs only account for about two percent of Norway’s total vehicles, it’s the highest percentage of any country and double that of its closest competitor, the Netherlands.
With rapid growth in EV adoption, Norway offers a particularly relevant policy case study for the United States, where cars and trucks account for one-fifth of all emissions and the vast majority of energy use in the transportation sector is ultimately wasted.
There are still questions surrounding the overall cost-effectiveness of Norway’s program as its popularity has made it increasingly difficult to finance road maintenance and some estimates peg the total carbon reduction at less than one percent. While valid, those concerns are later-stage challenges faced by a more advanced clean energy economy.
For the U.S., average annual “well-to-wheel” emissions for EVs are less than half of that for gasoline-powered vehicles – representing a huge emissions reduction opportunity. U.S. policymakers should draw these five lessons from the Norwegian playbook to help spur EV sales and encourage cleaner travel behavior.
- Cultivate EV awareness
For nearly 30 years, Norway has made a concerted effort to raise awareness about EVs with consumers – the benefits, incentives, where they can charge and more. This has been the central focus of the Norwegian Electric Vehicle Association (ELBIL) as manufacturer promotional campaigns are often too self-promotional and uncoordinated.
Despite the growing popularity of Tesla, U.S. EV awareness still lags and remains a major roadblock to more widespread adoption. A recent report by the National Academy of Sciences has found that “most potential plug-in electric vehicle customers have little knowledge or experience with them. Lack of familiarity with this new category of vehicles, and their operation and maintenance, creates a substantial barrier to widespread deployment.”
- Set ambitious and attainable goals for EV adoption
With a package of supporting incentives, the Storting (Norwegian Parliament) set an overarching goal of 50,000 registered zero emissions vehicles by the end of 2017. The target was recently surpassed last April and had grown to nearly 66,000 by last September.
The U.S. has attempted a similar goal. In 2008, President Obama set a target of one million EVs by 2015 – a mark that has been sorely missed. Currently, there are only about 400,000 EVs on the road (less than 1 percent of all cars and trucks sold last year) due to low awareness and weak supporting policies, incentives and infrastructure.
- Establish meaningful negative and positive incentives
In Norway, ordinary vehicles are subject to high purchase taxes, fees and tolls. EVs are exempt from many of these negative incentives, including a 25 percent sales tax and a registration fee that averages more than $12,000. They are also exempt from a number of parking fees, bridge and tunnel tolls and ferry tickets. As a bonus, they are even allotted bus lane access.
While many of the aforementioned negative incentives are politically unpalatable in the U.S., there is still significant room for improvement with positive incentives. Currently, U.S. EV buyers can qualify for a $7,500 federal income tax credit, but only 13 states offer some combination of rebates, tax credits or carpool lane access.
- Invest in EV-charging infrastructure
One of the biggest challenges to EV adoption is sufficient charging infrastructure. Norway hasn’t been perfect in that regard: many Norwegian EV owners are upset that the amount of charging stations hasn’t kept pace with EV sales. Still, the small nation had about 1,000 public charging spots by the end of last year and the number continues to climb.
The U.S. boasts more than 13,000 public charging stations, but also has significantly more ground to cover: the U.S. has more than 4 million miles of roadway compared to about 55,000 miles for Norway. Additionally, the distribution of charging infrastructure is often concentrated in specific cities and states.
- Use clean generation sources
Norway has some notable advantages with clean power generation, including its wealth from oil and natural gas production (profits from which are often invested in renewable energy and sustainability initiatives) and extensive hydropower, which accounts for 99 percent of all power generation. The cheap and clean electricity provided by hydropower offers added benefit for EVs.
In the U.S. – where fossil fuels still make-up two thirds of the nation’s total power generation – the environmental benefits are far less pronounced. However, as the U.S. begins to meet its commitments under the Clean Power Plan and landmark Paris climate agreement, the U.S. will be better positioned to realize the full environmental benefits of EVs.
While there are certainly some differences and challenges, Norway’s program offers a model for how the U.S. can encourage more sustainable travel behavior with electric vehicles: by proactively educating consumers, setting ambitious yet attainable goals, offering meaningful incentives (and disincentives), investing in the necessary infrastructure and deploying clean energy resources.
Aaron Tinjum is an energy policy and communications professional. He was a recent fellow at the Clean Energy Leadership Institute. Follow him on Twitter @AaronTinjum.