Norway has seen successfully promoting electric vehicles due to generous tax incentives, such as the exemption of zero-emission vehicles from registration, VAT and fuel taxes, as well as reductions in road taxes, ferry and parking fees. In 2021, two-thirds of new passenger vehicles sold were fully electric. The government is now working towards a sustainable vehicle taxation system.
Norway is a northern European country with a small population of 5.4 million and a large coastline, making it difficult to develop a public transport system. Road transport is the most popular mode of transport.
After a peak in transport emissions in 2012, the Norwegian government introduced a package of incentives to encourage the purchase of zero-emission vehicles. These vehicles are now cheaper than petrol or diesel cars. According to government projections, the stock of these vehicles might reach 1.25 million by 2030 (compared to 225,000 without incentives). There is also a dense network of charging stations, as well as low costs of batteries and related services. In 2020, Norway had over 13,000 charging points, including 1,600 high-speed charging points, all developed with public subsidies.
Norway is leading the world in decarbonizing its transport sector, has already electrified a third of its domestic ferries and is a pioneer in electric aviation. But the Norwegian government's tax exemption on electric vehicles has resulted in a loss of around $1.3 billion in 2021, and an overall benefit to electric vehicles was estimated at $3.5 billion. The success of electric vehicles has caused a decrease in environmental taxes, which represents almost a third of the total tax revenue.
Source: OECD.org