Norway continues to lead the world in electric vehicle adoption, with an astounding 95.9% of new car registrations being fully electric in 2023-a figure that rose to nearly 98% by December[[1]].This remarkable transition, fueled by strategic tax policies and incentives, contrasts sharply with broader European trends, where EV demand has recently prompted a reevaluation of planned phase-out dates for gasoline and diesel vehicles[[1]]. The following report details the factors driving this success, including a recent surge in purchases ahead of new tax adjustments, and looks at how automakers are adapting to the evolving Norwegian market.
Norway cemented its position as a global leader in electric vehicle adoption in 2023, with nearly all new cars registered being fully electric, according to official data released Friday.
The rapid shift towards battery-powered vehicles, driven by tax incentives, saw electric cars account for 95.9% of all new car registrations in Norway last year, rising to almost 98% in December. The Norwegian Public Roads Administration reported an 88.9% share for electric vehicles in 2024.
This swift transition by the oil-producing nation stands in stark contrast to the broader European market, where sluggish demand for EVs prompted the European Union to recently abandon its planned 2035 ban on the sale of new gasoline and diesel cars.
Rush to Buy Before New VAT Charge
Tesla was the best-selling car brand in Norway for the fifth consecutive year, capturing a 19.1% market share, followed by Volkswagen with 13.3% and Volvo with 7.8% of registrations. The popularity of Tesla underscores the growing consumer demand for electric vehicles, even amidst broader market challenges.
Tesla sold 27,621 vehicles in Norway in 2023, particularly the Model Y, exceeding any other automaker’s single-year sales volume in the country. This performance came despite some consumer backlash affecting the brand in much of Europe, stemming from CEO Elon Musk’s support for far-right political figures and former U.S. President Donald Trump.
Norway, which began taxing electric vehicles in 2023, announced in October that it would add up to $5,000 to the value-added tax per vehicle starting January 1, triggering a surge in purchases as buyers and dealerships rushed to beat the deadline.
“What we did very quickly was to redirect a number of cars that were not originally destined for Norway, to bring them here faster,” Per Gunnar Berg, CEO of Ford Norway, told Reuters.
Norway’s EV Push: A Carrot and Stick Approach
While some incentives for electric vehicles have been phased out, the government has consistently increased taxes on gasoline and diesel cars to make them more expensive, explained Christina Bu, head of the Norwegian Electric Vehicle Association.
“This is often misunderstood outside of Norway – everyone thinks it’s about tax exemptions and incentives, but it’s also about the stick,” Bu said. “Internal combustion engine cars are, in a way, being phased out through taxes.”
The few remaining fossil fuel cars registered in 2023 were largely specialized vehicles, such as accessible cars for wheelchair users or those used by police and other emergency services, along with a small number of hybrid and sports car models.
Electric vehicles costing less than 300,000 Norwegian kroner, equivalent to approximately $30,000, will remain exempt from VAT in 2026, potentially boosting sales of smaller cars, executives said.
“I think the tax changes will accelerate a return of compact cars… which dominated both Norway and Europe,” said Berg of Ford.
Ulf Tore Hekneby, director of Harald A Moller, which imports Volkswagen, Audi, Skoda, and CUPRA vehicles, said he expects more internal combustion engine models to be launched as electric vehicles.
“There will be many new launches from our brands for compact cars, so we will have a new range that we haven’t had for many years,” Hekneby said.
Foto: Gvictoria | Dreamstime.com
