Norway begins a long farewell to fossil cars, and Australia still has a lot to learn

Norway has long been a leader in the transition to electric vehicles. As I wrote here, Norway’s EV policies began in 1990 and, through bipartisan political support, have developed consistently since then.

As part of this policy evolution, in 2016 Norway became the first country to set an end date for the sale of passenger and light commercial vehicles with an internal combustion engine (ICE). 2025 is just over a year away, and in September of this year, electric vehicle (PEV) sales reached 93%.

One interesting figure is the share of full battery electric vehicles (BEVs) compared to plug-in hybrid electric vehicles (PHEVs) sold in Norway. (Together these two are known as “plug-in electric vehicles” or PEVs).

It’s worth noting here that while PHEVs can be sold in Norway after the 2025 cut-off date, hybrid EVs (“HEVs” – i.e. those without a recharging plug) will be banned from sale.

However, PHEVs still include a fossil fuel-powered component, and as such Norway no longer gives them the same generous tax treatment as BEVs. The latest figures for new car sales in Norway reflect this: of these 93% PEVs, 87% are BEVs and only 6% PHEVs.

A second consequence is that the manufacturers themselves are now giving up selling ICE vehicles in Norway. Hyundai was the first to end sales of ICE cars from January 1. VW also announced that they will sell only electric models in Norway from January 1, 2024 (Now only 6 weeks away).

It seems that in Norway the end of the adoption curve has been reached. Only the last of the “backward” 16% are left to switch to EVs, now their ICE options are diminishing and the better economic case for full BEV ownership is being felt.

An interesting question to ask now is, given that Norway has reached almost 100% PEV sales, exactly how long will it take Norway to reach a 100% BEV fleet?

Current figures show that BEVs make up 22.6% of Norway’s vehicle fleet. Given that the average life of a car in Norway is 10.7 years, this means that without any policy changes it is likely that half of them will still be on the road by 2034 (10.7 years).

In addition, the balance will still decrease from there, so Norway’s early transition to majority BEV sales will still mean that ICE vehicles will remain on Norwegian roads for more than a decade beyond their 2025 end date.

Lessons for Australia

Fortunately, even the Australian government has seen the writing on the wall for PHEVs, despite heavy lobbying by some of the manufacturers. As a result, generous additional tax incentives here for PEVs drop from PHEV eligibility in 2025.

On the other side of the coin, we still don’t have a fuel efficiency standard (FES) to incentivize manufacturers to offer more low and zero emission cars here.

Even worse, we still have one of the worst fuel quality standards in the world – if this is not addressed by FES with the associated introduction of fuel quality standards that match existing international standards (such as Euro 6d) , we’ll still see the dirtiest ICE vehicles in the world brought here, even if they get more efficient!

On top of that – unless we do something soon, as Australia’s average vehicle age is similar to Norway’s (10.6 years here), it will be a long time before we see a noticeable decline in overall passenger and light truck numbers fleets with ICE.

Even worse, with the dirty fuels we use in Australia, the pollution from ICE cars sold new here today will be polluting the roads in large quantities for a long time to come.

This is in contrast to areas such as Europe, where PEV sales are approaching one in four and existing higher fuel quality standards already mean less pollution locally and lower overall CO2-e emissions. Looks like we still have a lot to learn.

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