How Norway Became the First Country to Have More EVs Than Gas-Powered Cars

Electric vehicles now outnumber petrol vehicles in the Scandinavian country as the European Union has seen electric car sales slow and cause a trade battle with China

by Alessandro Camillo

According to new figures released by the Norwegian Road Federation this month, Norway has become the first country in the world to have more electric cars being driven in the country than petrol cars.

754,303 cars registered in Norway are now all-electric, compared to 753,905 that are solely gas-powered. Just under one million cars remain diesel-powered, but their sales continue to fall at a fast rate.

“This is historic. A milestone few saw coming 10 years ago,” said Øyvind Solberg Thorsen, the director of the Norwegian Road Federation (OFV). “The electrification of the fleet of passenger cars is going quickly, and Norway is thereby rapidly moving towards becoming the first country in the world with a passenger car fleet dominated by electric cars.”

In August of this year, just under 95% of newly registered cars in Norway were all-electric. This was boosted by high-volume sales of the Tesla Model Y in the country.

Norway, a country with a population of 5.5 million people, aims to become the first country to end the sale of gas-powered cars by 2025. This is ten years ahead of the European Union’s target for zero-emission vehicles. 

To achieve this goal, they have introduced incentives to consumers such as tax breaks and rebates to boost sales of electric vehicles (EVs). Other incentives include free parking for EVs in certain places and an indemnity against city tolls for EV drivers. These incentives are typically funded by the large amount of money Norway makes from oil and gas.

The country owns a fund worth more than $1.7 trillion (€1.52 trillion) in large part due to the proceeds from its vast oil fields. This fund has been a key driver in subsidizing the EV market in the country and promoting the adoption of EVs amongst citizens. With this government support, EVs are competitively priced when compared to fuel, diesel and even hybrid cars in the Scandinavian country.

Elsewhere in Europe, the adoption of EVs has slowed significantly. After beginning to fall towards the end of 2023, only 12.5% of new car sales come from EVs on the continent. 

The EU announced plans in July to impose import taxes of up to 36% on some Chinese EV imports on top of the standard 10% import duty on cars. This comes after an anti-subsidy investigation started by the European Commission last year which found that China’s state subsidies gave Chinese EV producers an unfair advantage. 

Beijing rejected the findings of the European Commission, and since the start of the investigation threatened to retaliate against the growing EU tariffs. The Chinese government has warned it would impose higher tariffs on an array of EU products and said bilateral trade between the continent and China would suffer major consequences.

Chinese EV producers, including companies like BYD, have begun to capture a large market share both at home and abroad over the past couple of years. In 2023, BYD’s total EV sales surpassed those of Tesla. Higher tariffs on these imported vehicles have led to slower sales on the European continent, and could jeopardize the EU’s long-term zero-emission vehicle goals.

As the rest of Europe juggles protecting its economic interests with reducing emissions from gas-powered vehicles, Norway offers a case study on how to promote large-scale electric vehicle adoption.

First published in Impakter. You can read the article here.

About the Author:

Alessandro Camillo

Alessandro Camillo is a recent graduate from Boston University with a degree in Economics. With professional experiences in finance and data analytics, Alessandro has a keen interest in sustainability, socio-economic development, and foreign policy. Away from work, Alessandro has a love for sports and travel.