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The change has been driven by generous incentives, thanks in
part to Norway's vast oil and gas wealth.
Still, analysts believe it will be a few years before BEVs
surpass the number of diesel vehicles in Norway.
The Nordic country of 5.5 million wants to become the first
country to stop selling new gasoline and diesel cars by 2025. Nine out of 10
new cars sold earlier this year were BEVs.
If more countries follow Norway's lead, global oil demand
could peak sooner than expected. The International Energy Agency expects this
peak to be reached before 2030, with cars and vans accounting for more than 25%
of oil demand.
However, Norway's transition hasn't been cheap, with the
country exempting BEVs from taxes on internal combustion engine cars and
investing in public BEV chargers.
According to data from the Norwegian Road Administration
seen by Reuters, BEVs accounted for 24.3% of Norway's 2.9 million cars as of
March 15, compared to 26.9% for gasoline vehicles.
That represented a lead of almost 76,000 gasoline vehicles –
significantly less than the 104,590 new BEVs sold in Norway last year.
“If this (trend) continues over the next 12 months, with
sales of pure gasoline cars currently negligible, there will be more BEVs on
the road than pure gasoline cars by this time next year, and likely before the
end of this year,” said Robbie Andrew, senior researcher at Climate Change
Think-Thank CICERO.
With nearly 370,000 more diesel cars on Norway's roads than
BEVs, it will likely take three to four years for BEVs to overtake diesel
vehicles, Andrew added.
Ingvild Kilen Roerholt, head of transport research at the
Oslo-based think tank Zero, also saw the number of BEVs overtaking petrol cars
in Norway this year, despite a recent decline in sales.
Sales of new BEVs fell by about a quarter in Norway last
year as new car sales generally fell amid rising interest rates and the
government cutting some tax incentives.
However, according to the Norwegian Road Association (OFV),
the share of BEVs in total sales reached a record 92.1% in January.
In March, that share was 89.3%, while new car sales fell
49.7% year-on-year, the latest OFV data shows.
Last year, the center-left government abolished a sales tax
exemption for BEVs that cost more than 500,000 Norwegian crowns ($46,700),
making models like the Tesla X and Audi e-tron more expensive.
Still, the remaining tax exemptions for BEVs will cost the
state 43 billion crowns in 2023, up from 39.4 billion crowns in 2022, budget
documents show.
Despite the recent sales decline, Roerholt said she was
“pretty sure” that sales of new BEVs in Norway would exceed 76,000 this year.
She also predicted that the number of BEVs in Norway could
exceed the number of petrol and diesel cars combined by 2029.
“For this to succeed, we must achieve the goal of 100% of
all new cars being emission-free by 2025,” she added.
The increasing popularity of BEVs has led to a decline in
demand for gasoline and diesel.
Sales of diesel and gasoline at Norwegian gas stations have
fallen by around 8% since 2021, according to monthly data from Statistics
Norway and Reuters calculations. This does not apply to the sale of diesel at
truck filling stations.
“It’s still a huge market for fossil fuels. We haven’t seen
the biggest drop yet,” Kristin Bremer Nebben, head of fuel dealers association
Drivkraft Norge, told Reuters.
Demand for fossil fuels has been supported in part by sales
of hybrid cars, which combine a battery with an internal combustion engine
powered by gasoline or diesel.
According to data from the Norwegian Road Administration,
there were almost 340,000 hybrid cars on Norwegian roads as of March 15, mostly
plug-in hybrids with gasoline engines, accounting for 12% of the total fleet.
However, hybrid vehicles have lost market share in recent
years as the government has withdrawn incentives.
The Norwegian EV Association expects BEVs to account for 95%
of all new car sales this year.