Norway

Major Developments in 2020

The total number of BEVs in the passenger vehicle fleet reached 339,912 at the end of 2020, and the share of the total fleet reached 12.1 %. The PHEV share of the total fleet reached 5.2% with 146,125 vehicles. Only 153 FCEVs were in the fleet at the end of 2020. The BEV market share of new vehicle sales reached 54.3 % in 2020, while PHEVs accounting for another 20.4%, so ~75% % of new vehicles sold new had a form of electric drivetrain. This was facilitated by the large number of new models with attractive characteristics that came on the market, and the continuation of favourable policies.

For Light Commercial Vehicles, the Battery Electric market share reached 8.5% in 2020, up from 5.6% in 2019. The fleet share reached 2 %. Battery Electric Heavy duty trucks continue to be a rarity, only 37 where in the fleet at the end of 2020. Battery Electric Buses are on the brink of a major breakthrough reaching a share of 2.9% of the total fleet, 453 in total. 403 of these are city buses and 50 are coaches.

New policies, legislation, incentives, funding, research, and taxation

The overall target for the vehicle policy is to support Norway’s climate policy targets of reducing greenhouse gas emissions by 40% in 2030, compared with 1990. This target subsequently led to the national vehicle targets in the National Transport Plan in 2017, of only selling zero-emission passenger vehicles, small light commercial vehicles and city buses from 2025, and 75% of coaches, all large light commercial vehicles and 50% of Trucks by 2030.

Norway has very attractive and comprehensive incentives for electric vehicles. BEVs and FCEVs are exempted from the registration tax and the Value Added Tax (VAT), which are levied on fossil fuel powered vehicles upon purchase. These exemptions make BEVs a cheaper option than ICEVs in most vehicle segments. In addition, BEVs have reduced annual tax, and several driver privileges with substantial economic value. The annual tax is levied as a tax on insurance with a fixed cost per day. ZEVs were exempted up to 2020, but from 2021 will ZEV owner pay 30% less than ICEV owners do. Table 1 provides an overview of the current legislation.

The incentives and BEV specific policy are stable but a gradual revision of some of the user privileges are ongoing. The current user privileges include reduced parking charges, reduced ferry rates and full or partial toll road exemptions. The energy taxes are also much lower for BEVs, which further have access to bus lanes.

A 2020 law amendment has given people living in shared housing communities a right to install charging infrastructure, for their vehicle, in the parking space they have access to in the common parking facility. This right is only denied due to special circumstances, for instance, if electrical capacity is not sufficiently available in the parking facility.
In the 2021, Climate Policy Bill, the Government proposes mandatory requirements for the purchase of zero emission vehicles (passenger cars and light commercial vehicles) to public fleets from 2022 and for city buses from 2025. The Parliament has not yet debated or voted on this proposal.

Outlook

The BEV market in Norway will likely remain strong through 2021, and move further into the late majority adopters in the passenger vehicle segment. The major purchase incentives, i.e. the exemption from registration taxes and the VAT, remains in place after approval from the EFTA Surveillance Authority1. Purchasing a BEV makes economic sense to consumers and provides access to attractive and money saving driving-privileges. 2020 saw the introduction of many new generation attractive vehicles, a development that will continue into 2020.

The first produced battery electric trucks from large traditional OEMs were taken into operation in 2020 and more will come during 2021. This should lead to an increased interest in truck electrification. The battery electric city bus market is in mass roll out, and more buses will enter Norwegian cities as new tenders are awarded. The coach market in general is likely to be limited during 2021, due to the effects of Covid-19, so the battery electric coach market is uncertain, although there are buses available in the market.

A big development has been the introduction of Chinese brands into the Norwegian vehicle market. Several brands entered the passenger vehicle, LCV and bus market in 2020, and at least one brand will enter the truck market with battery electric trucks in 2021. More Chinese brands and a wider selection of models will be introduced in the segments they already are present in.