Skip to Content

In Tesla-Crazy Norway, the Electric Vehicle Revolution Is Already Here

Until he moved to Norway, Michael Arup had never owned a car.

But when the banker and his family moved from Copenhagen, Denmark to the Norwegian capital of Oslo in 2016, they decided a vehicle was a necessity. So they did as the Norwegians now do, and bought a Tesla Model-S.

It hadn't been his first idea, he says. "I had just assumed [a Tesla] would be too costly, but in Norway there are so many incentives to buy electric cars," Arup says. First of all, he paid no tax when he bought the car. There were other benefits too: no congestion charges, no road tolls—and free parking.

Those perks have created a powerful demand for electric cars, pushing the country—the world's eighth-largest oil exporter—to the front of the electric car revolution.

Automobiles produced by Tesla Inc. sit dockside after arriving on the Glovis Courage vehicles carrier vessel at the Port of Oslo in Oslo, Norway, on Friday, March 15, 2019. Credit: Odin Jaeger—Bloomberg via Getty Images
Odin Jaeger—Bloomberg via Getty Images

In the first half of this year, electric vehicles made up 55% of personal vehicle sales in Norway, up from 6% in 2013, according to Rystad, an energy consultancy based in Oslo. That shift is largely due to a powerful mix of tax breaks and incentives to encourage Norwegians to go electric.

The death of diesel?

Those stats cap a dramatic transformation over the last six years. In the period, sales of diesel cars have dropped by 95%, the consultancy says, and the share of diesel vehicles in use has sunk to just 32%, almost half what it was in 2013. The share of gasoline-burning cars has dropped to 17%, down from 29%, according to Rystad.

"High-range battery electric cars have reduced the sales of high-end diesel vehicles, primarily SUVs and sedans, which are also the most energy-consuming private vehicles on the market," said Artyom Then, a senior analyst at Rystad.

The nation's favorite electric car brand has been, of course, Tesla. In July, the electric carmaker became the most popular in Norway, eclipsing Volkswagen, according to the Norwegian statistics agency. The mid-sized Model 3 was its most-sold vehicle.

There are downsides to a Tesla in Norway, admits Arup—in the winter, the range is about half what it is in the summer, he says. Skiing trips require slightly more preparation than if he used a fuel-burning car.

But the proliferation of charging infrastructure has also lessened those worries.

"This summer, we drove around western Norway, and there were super chargers in the middle of nowhere," he says. "In the camping site, they had a super-charger, free of charge."

An oil exporter pushes to go green

Super-fast electric charging stations in rural Norway is an image that's slightly at odds with the country's continued economic dependence on its oil and gas industry.

Despite—or because of—this dependency, Norway's government has also made some aggressive steps to wean consumers from the fossil fuels. That includes aiming to end the sale of fossil-fuel burning cars by 2025, and divesting from some major energy companies within Norway's sovereign wealth fund—a decision based on the country's central bank's advice that the country was too exposed to the oil and gas industry.

A Tesla enters a garage devoted only to electric cars in Oslo on April 30, 2019. Norwegians have increasingly embraced electric cars, and Teslas are the country's favorite brand. Credit: Jonathan NACKSTRAND—AFP)
Jonathan Nackstrand—AFP/Getty Images

Consumers' resulting shift to electric hasn't just hit diesel hard, it's weakened demand for plug-in hybrids too, says Rystad. When Norwegians go electric, they prefer to go all the way.

Arup agrees. As electric cars have become ubiquitous in Norway, some of the tax incentives have been cut back (he now has to pay some congestion fees, for example), but Arup says the discounts he gets over fuel-burning cars still mean it's worth it.

In Norway, he says, "it doesn't make sense not to have an electric car."

More must-read stories from Fortune:

—The newest threat to cheap European flights? A plan to finally tax jet fuel
Energy company earnings suffer in the gas glut era
Renewable energy is booming. Here’s how to keep it going
—Why kids are skipping school to fight climate change
—Listen to our audio briefing, Fortune 500 Daily
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.