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Electric Vehicles Made Up 54% of All New Car Sales in Norway in 2020

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【Summary】​Norway became the first country in the world where the sale of electric cars has overtaken those powered by fossil fuels. In 2020, battery electric vehicles (BEVs) made up 54.3% of all new car sales in the Nordic country, which is a global record. The figure is up from 42.4% in 2019, according to the Norwegian Road Federation.

Eric Walz    Jan 05, 2021 12:35 PM PT
Electric Vehicles Made Up 54% of All New Car Sales in Norway in 2020
Electric vehicles charging in Olso, Norway.

Norway became the first country in the world where the sale of electric cars has overtaken those powered by fossil fuels. In 2020, battery electric vehicles (BEVs) made up 54.3% of all new car sales in the Nordic country, which is a global record. The figure is up from 42.4% in 2019, according to the Norwegian Road Federation (OFV). 

As part of the increase in electric vehicle adoption, electric automaker Tesla was overtaken by German automaker Volkswagen in Norway as the electric vehicle sales leader, the data shows. 

Volkswagen's luxury brand Audi claimed the number one spot with its e-tron SUV and sportback model as the most sold new passenger vehicles in Norway last year. Tesla's mass-market Model 3 was the best selling EV in Norway for 2019, now the Model 3 sedan holds the number two spot, respectively.

While the sale of BEVs had topped the 50% mark in some months throughout 2020, it was the first time that fully electric cars outsold the combined volume of models containing internal combustion engines for a year as a whole. The month of December was especially strong for BEV sales, hitting their highest level for any single month of 2020 with a 66.7% share of the car market.

Norway has one of the most aggressive timelines to phase out the sale of internal combustion engine vehicles. The Northern European country is seeking to become the first nation to end the sale of gas and diesel-powered cars by 2025. 

"We're definitely on track to reach the 2025 target," said Øyvind Thorsen, the chief executive of OFV.

Other countries, such as the Netherlands plan to phase out the sale of internal combustion engine vehicles by 2030. While France and the UK have set a more conservative 2040 target to do the same.

Like many other countries, Norway offers incentives for purchasing a battery-powered vehicle. The country exempts purely electric vehicles from taxes imposed on those powered by fossil fuels, which is why Norway is attractive to the world's automakers looking to jumpstart sales of battery-powered vehicles.

The purchase tax for all new cars in Norway is calculated by a combination of weight, CO2 and NOx emissions. The tax is progressive, meaning that larger vehicles and those with higher emissions are much more expensive. 

Norway's progressive tax system makes most EV models cheaper to buy compared to a similar petrol model, even if the sticker price is much higher. This is one of the reasons that the EV adoption rate is so high in Norway compared to other countries.

China's EV startup Xpeng Motors recently shipped its first batch of electric cars to Norway, its first vehicle sales outside of China. One of the reasons Xpeng chose Norway is the brisk sales of EVs in the country. Norway also provides a launchpad for Xpeng to expand to other European countries as its looks to compete with Tesla in Europe.

Electric vehicle sales are expected to continue to rise in 2021, as new mainstream models from Volkswagen, BMW and Ford come to market. Tesla's Model Y crossover is due to reach the Norwegian market this year.

"Our preliminary forecast is for electric cars to surpass 65% of the market in 2021," said Christina By who heads the Norwegian EV Association, an interest group. "If we manage that, the goal of selling only zero-emission cars in 2025 will be within reach."

New car sales in Norway reached 141,412 units in 2020, of which 76,789 were fully-electric models.

Norway's path to lead the world in EV sales occurred in just under a decade, which indicates the global auto industry's push towards electrification is happening rather quickly. Diesel-powered models accounted for 75.7% of all vehicles sold in the Norwegian market in 2011. By 2020, that figure fell 8.6% as European countries in general begin phasing out diesel vehicles to meet the EU's climate goals.

Here in the U.S. EV adoption has been much slower than Norway, despite U.S. automaker Tesla rising to become the world's most valuable automaker in 2020. Electric and hybrid vehicles accounted for around 1.2% of the roughly 16 million vehicles sold in the U.S. last year.

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