The Secret Behind Norway’s EV “Miracle” Isn’t Oil
In Norway’s utopian world of electric vehicles, things are not what they seem.
See Alex's Norway EV report on /DRIVE on NBC Sports: Electrification, Thursday, October 26 @ 9:30 pm ET on NBCSN.
This is Part 1 of my journey around the world to understand the future of transportation.
I want to believe our electric automotive and autonomous future is around the corner, but with the stench of clickbait fouling most rational discussion, I took a road trip around the world to investigate the narratives most frequently repeated by lazy media and gullible investors.
Let’s start with electric vehicles. Are EVs really about to reach a tipping point?
My first stop was Norway, the most electrified country in the world, where an EV “miracle” has allegedly taken place. The car? A state-of-the-art Tesla Model S P100D, a car I know and love. The route? Eight hundred miles from Oslo to Kristiansund and back, with a detour to drive the legendary Atlantic Road.
As usual, things are not what they seem.
The traditional narrative of EVs in Norway
This is the one used by everyone who wants to sell you an EV, save the environment, support Tesla’s stock price or make cool videos for green web sites: Fossil fuels are bad, electricity is good. Whatever the cost, by whatever means, people need to stop driving internal combustion (ICE) cars. In that earthly scenario, Norway is a sort of heaven. They’re so forward thinking that they’ve been subsidizing EV sales since the 1990s, but since there was nothing decent to buy back then, sales went nowhere until five years ago, with the arrival of the Tesla Model S and Nissan Leaf.
Today, Oslo is the EV capital of the world. More than 30% of all new cars are EVs or plug-in hybrids. There is talk of banning ICE vehicles by 2025. There are now over 100,000 plug-in vehicles in a country of only 5 million people, which makes perfect sense. Internal combustion cars are taxed at 100%. EVs? No tax. That’s right. For half the price of a Porsche Panamera, you can drive a Tesla Model S with a universe of additional benefits. In a country where gas is $7 a gallon, charging is free. EVs don’t pay for registration fees, or for tolls or ferries. EVs can use bus and HOV lanes.
The list goes on and on.
With so much upside, those enlightened Norwegians have set the example for how to leave the dirty world of internal combustion behind. If only other countries would follow their example, the world would be a better place.
But it’s not that simple.
The Counter Narrative
All those subsidies? Paid for by Norway’s $1 trillion dollar sovereign wealth fund and the $15 billion generated annually through oil and gas exports. This excellent Bloomberg piece deconstructs the hypocrisy of it all. The Norwegians are burning less oil, but they need everyone else to keep burning it. The more, the better, so as to pay for Norway’s EV “miracle.” That’s why Norway remains Western Europe’s #1 exporter of fossil fuels.
Even Transport Minister Ketil Solvik-Olsen admits it’s the devil’s argument.
“Yes, we made a lot of money on oil,” Solvik-Olsen told Bloomberg, “but we know there are downsides to the product, and we try to take the world to the next level.”
If Norway’s shift is paid for exporting the very pollution they want to expunge, any moral argument on behalf of electrification is nullified. If and when the export markets dry up, Norway’s ability and/or desire to subsidize EV sales will evaporate. That's how economics works.
If the moral argument for subsidies only works on a local level, if subsidies can’t or won’t last, and EVs are still only 3% of sales, Norway’s “miracle” isn’t a miracle at all, but a noble experiment that has yet to run its course. The real question becomes whether EV sales will continue in the absence of incentives. For instance, EV sales in Hong Kong ground to a halt when their EV tax exemption was lifted in April. But every market is different, and culture is everything.
Because the subsidies cover so many different aspects of EV ownership, and because owners may value each incentive differently, one has to analyze them individually to understand why sales are increasing, and by how much cutting subsidies may reduce demand.
And so I landed in Oslo and headed to the Tesla dealership to begin my journey.
The Other Pollution
Oslo is a gorgeous city, and EVs are a big part of why. Norway isn’t just attacking pollution in the traditional sense. Oslo is the first big city I’ve ever visited that’s really solving noise pollution. Because there are EVs everywhere, Oslo is very, very quiet. Downtown Oslo looks like a Tesla commercial. Fleets of Nissan Leafs and VW E-Golfs disappear behind rows of Musk’s big (by Norwegian standards) American imports. You don’t know what noise pollution until you’ve grown up with it as I have in New York City, and arrive in a place like Oslo.
How much do Norwegians appreciate quiet? Here’s an anecdotal data point: no one honks. Yes, there’s honking, but not by New York standards. You’re only supposed to use your horn in emergencies, and road rage doesn’t qualify. I honked at someone in downtown Oslo. Once. The last time a foreigner got that kind of icy Norwegian glare was when the Wehrmacht arrived in 1940.
So, if a Model S suddenly cost as much as a Porsche Panamera, would you still buy the Tesla if only to keep your city quiet? If I’d never owned an EV, probably not. If I had, then I’d go with almost any EV over an ICE car, even the incredible new Panamera.
Why? Norway’s automotive culture, which isn’t solely driven by performance as we know it, or even money.
When Performance Is Useless
Norway’s speed limit is 110 kilometers an hour, or about 68 miles an hour. Everyone obeys it—everyone. The roads are perfect, but there is no enthusiast lobby to exploit them. Police are nowhere to be seen, but traffic cameras are common. Speeding fines are calculated at 10% of annual income, and you’re looking at jail time for speeds deemed “offensive.” There is literally nowhere to exploit the performance of a Porsche without violating civic norms. Besides, a Model S will smoke almost any ICE vehicle you’re likely to see in Norway, at least in a straight line.
The bottom line? Acceleration, top speed and handling are wasted on Norwegian car buyers.
If you want proof, ask yourself why Norway’s Atlantic Road is touted in travel books in dozens of languages, yet Trollstigen Pass isn’t mentioned as one of the world’s best driving roads. The Atlantic Road isn’t the Pacific Coast Highway of Scandinavia I was expecting. It’s a slow five mile slog over some bridges bracketed by rocky outcroppings and the Norwegian Sea.
I’m sorry, but the Atlantic Road sucks compared to Trollstigen Pass, Norway’s secret gem, which is nothing less than the Stelvio Pass of the north.
In any other country, this road would be jammed full of Subarus WRX’s and Audi S4’s, but that’s not the Norwegian way.
If enthusiast performance is irrelevant, then the Tesla V. Porsche debate is one of silence versus a better interior. I know what I’d choose, and I’m not even Norwegian. Scandinavian psychology skews away from ostentatious displays, even among the wealthy, which is probably why I only saw one Porsche on the road the entire week.
Something tells me that removing the de facto 50% discount on EVs isn’t going to kill sales as it did in Hong Kong, because the purchase price isn’t the sole incentive to drive one. As we shall see, it’s not even close to the top of the list.
But what is the true value of the other incentives to customers?
Free EV Parking & Charging? Not So Fast.
Those free public parking/charging spots are great, if you can find one. Oslo may be the world’s most EV friendly city, but I circled downtown without finding a single such spot on the street. Tons behind office buildings and apartments, but those aren’t public. Given how long it takes to charge an EV outside of a Tesla Supercharger, I’m not sure how much even Oslo’s widespread public charging infrastructure is doing to drive sales. Luckily, I had a meeting in a corporate complex with an underground garage full of chargers.
They were cheap, but they weren’t free, and even “fast charging” is still glacial compared to Tesla Superchargers at their best.
Here’s the kicker: the city of Oslo is more interested in reducing traffic than it is in replacing ICE vehicles with EVs, and pay-per-mile taxes are on the table. The number of free public spots with charging is going up, but the total number of parking spaces is going down to encourage walking and biking. The decline in urban parking affects all drivers equally, and since charge times and public space availability limit EV owners’ reliance on them even now, EV sales are unlikely to be affected if this incentive is removed.
If you want an EV in Norway, you need a charger at home or at work, which means you’re likely paying something for electricity, which means that if the subsidy for that glacial free charging goes away, that alone won’t necessarily kill EV sales.
Don’t believe me? Financial savings is pretty far down the list of reasons people buy EVs.
The #1 reason? Environmental benefits.
FYI, we got a parking ticket at a Tesla Destination charger on what appeared to be private property, in the alley behind the Quality Grand Hotel in Kristiansund.
Charging was free. The fine was about $70. Be warned.
How About Those Tolls, Ferries & Bus Lanes?
Free tolls and ferries may seem like a big deal when they can run $18 or more, but our journey to Kristiansund wasn’t close to free. Two toll agents and a ferry operator all insisted we pay, and laughed when we said, “but it’s a Tesla.”
The first toll operator was either the only Norwegian not to speak fluent English, or trolling us, because when we asked why, he pointed at an indecipherable chart of axles and passengers. From what we could glean, EVs might be free, but you pay by the passenger.
I still don’t know.
The ferry was free at one time. It sure isn’t now.
How about HOV and bus lane access? This might of value if you commute via one of Norway’s few heavy traffic corridors, but by American standards these are a joke. In four days I never saw anything I’d call “traffic”. I wouldn’t call this an incentive as much as bait. Given Norway’s culture of civic cooperation and mutual respect, only the crankiest of Norwegians care.
The Story Tesla Superchargers Tell
The gold standard of EV charging, Superchargers can get you from under 5% to 85% in an hour and change. Can, not will, and that’s one of the two mysteries of Tesla’s Norwegian infrastructure. None of the Superchargers we visited approached the best charging speeds common at Tesla’s American locations, even when ours was the only car present. This was true over several days at the Dombås, Lillehammer, Aspøya, Vinstra locations.
The second mystery? A drive-by of the Nebbenes location—with 20 Superchargers, it's the world’s largest—failed to reveal as many cars as suggested by Tesla’s in-car navigation system, which is supposed to indicate how many stalls are in use.
And it wasn’t just Nebbenes.
The seemingly reduced speeds might have been a function of temperature, grid issues or a battery issue, none of which is as interesting as the unexpected lack of Supercharger traffic. Because free Supercharger speeds are still vastly superior to any of the hilariously named “Fast Chargers” outside the Tesla network, one would expect to find owners lining up to take advantage.
And yet they weren’t, even at rush hour. There’s clearly something else going on.
Here’s a map of Tesla Superchargers, none of which are near city centers:
Here’s Plugshare’s map of non-Tesla options, which isn’t close to comprehensive at this zoom level:
That’s a lot of slower-than-Tesla charging options, in locations closer to where most people live.
What’s happening? Culture. It appears EVs are starting to bake in, and Tesla owners are opting to charge at slower rates closer to home or work, even if they have to pay for it, and restricting Supercharger use to long-distance travel. As for everyone else, they have no choice. They’re locked into an expanding network of slow and mediocre “fast” chargers, with vehicles whose range is generally less than half that of a Tesla.
Here’s a breakdown of the Norwegian EV market:
Tesla may dominate Norway’s EV narrative, but that’s a function of PR, not sales volume. The EV market is clearly bifurcated between two car types/use cases: 1) the more expensive car you can realistically take on long trips with faster charging, and 2) the cheaper car that’s easier to park with sufficient range for commuting.
For now, unless you buy a Tesla, you’re sticking close to home and work. Tesla has an opportunity to move downmarket and build volume when the 3 arrives, but everyone else has a big problem if they want to break out of urban areas, let alone move up. A one day trip in a Tesla becomes a two day trip in anything else. The range of smaller EVs is limited by size constraints, which means charge speeds will be the differentiator. Can non-Tesla charging speeds improve quickly enough to match demand for cheap EVs? Or will the 3 arrive in time to exploit Tesla’s presumably temporary infrastructure advantage?
The answers require a longer visit, but there is an obvious lesson to be gleaned from what I observed, and a lot of people on both sides of the debate aren’t going to like it.
The Real Miracle
There is a Norwegian miracle, but it isn’t specifically about oil or EVs. Both the pro and anti subsidy narratives are correct. It doesn’t matter whether fossil fuels are truly evil and EVs are good. That Norway believes it all that matters. It doesn’t matter that EV subsidies are paid for by exporting the very pollution Norwegians want to eliminate. That Norway made a choice is all that matters.
Everyone is aware of how the subsidies are funded, and no one thinks they can go on forever. No one I asked even wants them to, because the consensus is that it’s for the greater good.
The real miracle is that of a highly educated and participatory society responding to the will of the majority of its citizens before it is forced to, based on the hope of preserving their way of life.
That miracle is a function of culture, and culture is almost impossible to replicate. The oil wealth funding the subsidy policy isn’t unique to Norway. Saudi Arabia, Iran, Iraq, Venezuela and Canada are all energy rich countries, but none save Canada possess the political culture to enact similar incentives, nor the civic norms to provide the catalyst for such subsidies to succeed.
What would define success for the Norwegian experiment? That they can afford the subsidies long enough for battery technology to match or beat ICE range and cost, at which point the subsidies can go away, and the EV tipping point will actually arrive.
Will they succeed? Based on their culture and the pace of technological progress, it appears they will. Can their example be replicated? Not without the geographic, demographic and political factors unique to Norway, which serves as a shining example of human will and the spirit to succeed but a tragic comparison for countries lacking those traits.
Thanks to Drive on NBC Sports for their support in reporting this story. Stay tuned for air dates of Norwegian episode.