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

Norway has long been the leader in the electric vehicle transition. As I wrote about here, Norway’s EV policies started back in 1990 and through bipartisan political support, have evolved in a consistent manner ever since.

As part of that policy evolution, in 2016 Norway became the first country to set an end-date for the sale of internal combustion engine (ICE) passenger and light commercial vehicles. 2025 is now barely more than a year away and in September this year sales of plug-in electric vehicles (PEVs) reached 93%.

One interesting number is the proportion of full-battery EVs (BEVs) as compared to plug-in hybrid EVs (PHEVs) sold in Norway. (Together, these two are collectively known as ‘plug-in electric vehicles’ or PEVs).

It is worth noting here that whilst PHEVs are able to be sold in Norway after the 2025 cut-off date, hybrid EVs (‘HEVs’ – that is, those without a recharging plug) will be banned from sale.

However, PHEVs still include a fossil-fuel driven component and as such, Norway no longer gives them the same generous tax treatment as BEVs. The latest Norwegian new car sales figures reflect this: of that 93% PEV, 87% were BEV and only 6% PHEV.

A second consequence is the manufacturers are themselves now giving up on selling ICE vehicles in Norway. Hyundai were the first, ending sales of any ICE powered cars from January 1. VW too have announced that they will sell only electric models oil Norway from January 1, 2024. (Barely 6 weeks away now).

It seems that in Norway the end-game of the adoption curve has is being reached. Only the last part of the ‘laggard’ 16% are left switching to EV, now their ICE options are reducing and the better economic case for full BEV ownership is making itself felt.

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

Current data shows BEVs make up 22.6% of the Norwegian passenger car fleet. Given 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 be still be on the road by 2034 (10.7 years’ time).

In addition, the remainder will still be tapering off from there, so Norway’s early move to majority BEV sales will still mean ICE vehicles remain on Norwegian roads for well over a decade from their 2025 end-date.

Lessons for Australia

Thankfully even the Australian government has seen this writing on the wall for PHEVs, despite heavy lobbying from some of the manufacturers. As a result, the generous Fringe Benefit Tax incentives here for PEVs sees PHEVs dropped from eligibility in 2025.

On the other side of the coin, we still don’t have a Fuel Efficiency Standard (FES) that would incentivise manufacturers to offer more low and zero emissions vehicles here.

Even worse, we still have one of the poorest fuel quality standards in the world – if that is not addressed by the FES with an associated introduction of fuel quality standards that matches existing international standards (such as Euro 6d), we will still see the world’s dirtiest ICE vehicles brought here, even if do they become more efficient!

On top of this – unless we do something soon, with Australia’s average vehicle age being similar to Norway’s (10.6 years here), it will be a long time before we see any noticeable drop in overall ICE passenger and light commercial fleet numbers.

Worse still, with the dirty fuels we use in Australia, pollution from ICE vehicles sold new here today will be polluting out roads in large numbers for a long time to come.

This is unlike areas like Europe where PEV sales are approaching one in four and existing higher fuel quality standards already mean less local level pollution and lower overall CO2-e emissions. Seems we still have a lot to learn.