Seit März 2020 leite ich das B2B-Marketing von NEW 4.0 im Cluster EEHH. Ob auf dieser Webseite, bei Twitter, via LinkedIn, auf Fachveranstaltungen und Messen - jeden Tag kann ich über das reden und schreiben, was mich am meisten interessiert: Die Entwicklung innovativer Lösungen für eine ganzheitliche und nachhaltige Transformation unseres Energiesystems. Parallel studiere ich meinen Master in Energy Policy. Diese Kombination aus Praxis und Theorie birgt viele tolle Chancen, meine Kenntnisse im Bereich der Erneuerbaren-Energien-Branche und nachhaltiger Energiepolitik zu vertiefen. (Janina Grimm)
Explained: How Norway’s traffic became electric
Given these numbers, to achieve the Paris Accord on climate change and stay within the agreed 1.5 degrees of temperature rise, it is essential to decarbonize the mobility sector. One important option is to reduce the carbon intensity of energy used in vehicles, for example through the introduction green electric vehicles. Let’s look into Norway’s e-mobility transformation, the world’s only success story so far.
Norway is certainly a world leader in adopting battery electric vehicles (BEVs). Its transition journey isn’t completed yet, but by every metric, this has been a successful transition story. Not only do electric vehicles constitute 75 percent of sales, but the stocks of electric vehicles stand at around 6.5 percent (including plug-in electric hybrid vehicles). That makes Norway the country with the world’s highest share of electric cars in its vehicle stock. So, the obvious question arises: What is the country’s recipe for success?
More than just policies
It is commonly believed that government policies were key drivers for Norwegians’ BEV demand increase. A closer look into Norway’s trajectory towards transport electrification tells us another story. Data shows how despite introducing the first flurry of policies in the 1990's to stimulate domestic manufacturing of BEVs, it is only after 20 years later that the national market share increased to a substantial level. To understand which factors did influence the market introduction and market uptake of electric cars in Norway, we need to explore different perspectives.
Nurturing the niche
Not many are aware of this, but Norway has a long history of BEV research and development, beginning in the 1970’s in response to the first international Oil Crisis. Things really took off in the 1990's, though. This is when national policy makers actively nurtured the Norwegian BEV niche industry, influenced by industrial actors who were looking to capitalize on the abundance of cheap electricity and to build a domestic BEV industry. Environmental NGO groups then managed to successfully exploit the opening window of opportunity to get legislation created for deploying BEVs in Norway.
As a result, in the 1990's a bulk of policies were introduced aiming to reduce high initial purchase costs of BEVs by removing registration taxes and lowering licence fees. This was followed by several incentives for drivers, for example, exempting BEVs from road tolls and parking fees.
Unfortunately, their initial strategy to nurture an inherent Norwegian electric car regime did not work out. There were early innovation successes with the PIVCO car, which even went international. This happened because of BEV regulations implemented in California, which led Ford to buy the Norwegian start-up. But ultimately the Californian success was short-lived due to the rigorous resistance of other mainstream car manufacturers in the USA. Even after the company was being taken in again by a Norwegian firm and other few start-ups surfaced, the fairly nascent BEV industry struggled to capture the consumers' attention due to its inability to develop a car that satisfied the requirements of the Norwegian market.
Against all odds
The policies remained, though, and were enjoyed by very few early adopters who mainly drove imported second hand electric cars from France.
During the first decade of the 21st century on the international landscape, governments began to focus on climate policies. For instance, the European Union introduced a new CO2-regulation on new vehicles. The Norwegian national government thereby felt compelled to tighten their own climate policies, including new efforts to actively support the EV market. For instance, a network association called NORSTART was formed in this period to increase public awareness. Further, another stumbling block - the charging infrastructure - was addressed. For this purpose, a proper government department - Trasnova - was created to manage and set up a substantial charging network all over the country.
Despite these efforts and all the incentives provided, BEV sales remained flat. The BEVs available around that time were developed within the limits of the technology available. They were still not fulfilling the users’ needs. They were too small, mostly suited to use within the city limits and without a design pleasing to the eye.
Entering the mainstream
Technical advances on lithium-ion batteries changed everything. This innovation breakthrough allowed BEVs finally to compete with fossil fuelled vehicles, by enabling them to complete greater distances, and larger cars to be developed. Due to their uptake in performance, around the year of 2010 big traditional car manufacturers began to introduce a BEV model to their offering. Aside from the most prominent electric car of our times – the Tesla Roadstar – other mainstream car manufacturers such as Nissan, Mitsubishi, Peugeot and Citroen introduced their BEV models into the market. Norwegian car dealers started importing them, and thanks to all policies introduced in the decades before, not only the country’s charging infrastructure matured. Also, more Norwegians felt able to invest in this technology.
Consequently, the purchase of BEV cars boomed from the years of 2010 onwards, and the market took off. By 2017, the sale of new BEVs were higher than conventional cars in Norway.
The electric vehicle: from the beginning a natural fit for Norway
Now, Norway was not the only country exposed to the international EV landscape happenings, nor is it the only country which implemented ambitious emission reduction policies nor the only one actively encouraging e-mobility in past decades. So, why is it than that Norway’s transformation towards a carbon-free transport system is so much further ahead than others? Other context conditions need to be considered in addition to get the big picture.
The most decisive framework condition which shaped Norway’s e-mobility development may be the country’s energy supply mix: Norway’s electricity production is predominantly renewable. Around 95 percent of electricity in Norway stems from publicly owned hydropower plants. As a result, when international awareness grew about the need to mitigate CO2-emissions, the Norwegian government did not need to worry about decarbonizing its electricity generation, like other countries did, but instead could jump right into the task of electrifying its transport sector. This also presented a great opportunity for Norway to be an important first mover within an international BEV car market.
Another factor motivating Norway's decision makers to follow the clean transportation path is the existence of a promising sales market, because Norway is a wealthy country and mass motorized society. Living standards and incomes are high, electricity is both abundant and cheap. However, Norwegians’ user preferences are not only influenced by money. Their deep-rooted connection to nature, as well as the lack of their own incumbent car manufacturing regime, make them less locked-into a carbon-based mobility system, and more open to new and cleaner alternatives.
It isn’t just Norway's economic, cultural, and environmental context that determines the dynamics and outcomes of the Norwegian BEV car regime. The presence and dominance of other energy sub-regimes are influencing factors too.The biggest and most powerful energy regime in Norway is their domestic oil and gas industry. Because of their importance to the country's GDP, it might seem logical that promoting transport electrification would be misaligned with their interests. However, the Norwegian oil and gas incumbents offered no resistance to the BEV newcomers. The main reason for this is that they are state owned enterprises, focussing only on the export of crude oil and gas. Against this backdrop, the entrance of a new actor was not considered a threat to their business. Overall, the BEV seemed to be from the beginning a natural fit for Norway's national context.
Any lessons learned from Norway’s journey?
To conclude: Norway is blessed with considerable natural assets that have supported the country’s BEV transition, both in terms of cheap renewable electricity, and oil stocks which generate substantial income to fund infrastructure and a high GDP. The actors supporting this transition did not face resistance from an incumbent regime. With this and the events we have highlighted, Norway became an early adopter of electric vehicles, building infrastructure early that supported this transition.
Certainly, it’s clear that financial and other fringe benefits do work. Starting work early on the infrastructure needed is key. However, countries with incumbent actors will face a bigger challenge to overcome boundaries. And there are few, if any, other countries that will have a similar situation to Norway. This transition is not wholly replicable, though certain lessons from it are useful.