MAJOR OIL EXPORTER LEADS THE ALL-ELECTRIC CAR RACE

  • Jun 9, 2022
  •  – 3 min read

Since the discovery of North Sea oil in Norwegian waters in the 1970s, this Nordic country has evolved into a major exporter of oil and gas. Today, these commodities equal about half of Norway’s total exports of goods and this new industry has created unparalleled economic growth.

With this enviable fact in mind, it may come as a surprise that more than 50% of all new cars now sold in Norway are all-electric! A much higher share than any other country.

So, why on earth is Norway taking the lead in the electrification race? According to Frances Sprei, associate Professor and researcher with the Chalmers institute in Gothenburg, one important reason is that the Norwegian government wisely started to evaluate the consequences of electrification more than 15 years ago, i.e. long before the electric car boom.

54% all-electric!

The Norwegian government applies a uniquely high car registration tax for gasoline and diesel cars. Which makes fossil fuel vehicles twice as expensive in Norway as in, for example, neighboring Sweden. To a large extent, this money is being used to subsidize electric cars.

As a result, fully 54% of all new cars sold in Norway are now all-electric, another 20 percents are plug-in hybrids, and 9 percent mild hybrids. The rest of Europe is obviously lagging way behind.

In the US, the ambitious frontrunner is California, where the goal is to have fully 250,000 electric charging stations within the next four years. Right now California with 12% of the US population is home to some 45% of all electric cars. The state is set to meet its goal of cutting greenhouse gas emissions to 40 percent below 1990 levels by 2030, and the health-based air quality requirements established in the federal Clean Air Act.

Two other oil- and gas-producing states, Texas and Florida, are runners-up in the race towards sustainability.

What about the former pioneers? 

In 1997 Toyota, a true electrification pioneer launched the first Prius. Since then others have been in the forefront of electrification. But recently the company announced an electric vehicle strategy that will result in 15 new battery-electric vehicles released by 2025.

It has been suggested that Norway’s uncompromising drive towards electrification is facilitated by the fact that the Norwegians (unlike other European countries, the US, or Japan)  don’t have to take the interests of the established carmakers into account. Thus the moderate pace of technology change.

On the other hand, it would be costly for manufacturers not to meet the increasingly strict environmental requirements of the European Union and their counterparts in other parts of the world.

Employment considerations

Another factor to be reckoned with is employment: In Europe alone, there are more than 100 plants making combustion engines, employing 112,000 people. A shift to plug-in hybrid cars would help to protect jobs since they take 50% more time, or up to 9 hours longer, to make cars with only a combustion engine. All-electric cars are much less complex to build and thus generate fewer jobs.