By Dr Philipp Seidel, Principal at Arthur D. Little

Around the globe, the fleet market has tended to pioneer electric vehicle uptake ahead of the consumer space. There are a variety of reasons why this is the case.

For example, fleet journeys are usually relatively short and in slow-moving urban areas, so range and speed aren’t such major concerns, and businesses can install their own private charging infrastructure to keep their vehicles on the road. However, many drivers are unable to return to central depots each night and rely on public charge points. And fleet operators can face the same EV supply issues as consumers.

To assist EV decision makers, and track global EV uptake, Arthur D. Little (ADL) has set up a methodology to evaluate the electric mobility readiness of 15 countries. Based on a detailed analysis of key market drivers and using standardized evaluation metrics, we’ve produced a Global Electric Mobility Readiness Index – GEMRIX 2022 – which details how markets compare with each other.

While there has been a massive jump in EV adoption over the last two years, our research clearly shows one country that’s literally miles ahead of everybody else in EVs: Norway. A GEMRIX score of 100 and higher means that it’s equally beneficial to buy and operate an EV as an internal combustion engine (ICE)-based vehicle – right now, with a score of 115, Norway is the only country where this is the case.

Why is this? Let’s take a closer look at the specific conditions within Norway that have seen it become the world’s most EV-friendly environment.

For a start, 87% of new vehicle sales in Norway in 2021 were pure battery EVs (BEVs) and plug-in hybrid EVs (PHEVs), and this builds on a long history of leadership in sustainability. For example, the country’s utilities sector is mainly built on renewable energy, with 45% of its energy mix coming from hydropower. Moreover, 98% of electricity production came from renewables in 2016.

Another key factor for Norway’s EV adoption certainly is its high share of urban population. Of the country’s inhabitants, 84% live in cities. As a result, the usual range anxiety, a major inhibitor of EV adoption, is less relevant, since city driving covers fewer kilometres.

However, Norway is a vast country, so the average trip length is high, close to 15km per day on average. But the government countered the threat of driver range anxiety by launching programs to install charging infrastructure as early as the late 2000s, which means that the country today has one of the most comprehensive networks of charge points in the world.

Norway has historically not had a large car industry, yet automotive suppliers are currently flocking to the Nordic country. For example, battery cell manufacturers Freyr AS and Morrow Batteries have set up shop in Norway, and battery recyclers Northvolt and Li-Cycle are building plants in the country. The high availability of renewable energy for electricity-intense operations is the key driver of this development.

Norway’s government resolved the economic chicken-egg problem through government-funded infrastructure projects as well as tax breaks for EVs. Furthermore, it committed to establishing chargers at intervals of at least every 50km at major roadways, and successfully fulfilled that goal.

To further accelerate EV adoption, Norway suspended import taxes on EVs in 1990, decreased annual registration taxes in 2000, and slashed EV VAT to 0% in 2011. Its focus on cutting taxes paid off as EVs became the major technology in 2019 to reach a 50% share of sales, and BEVs reached 50% of sales in 2020.

Norway has also set ambitious goals for the future, declaring a target of zero local emissions from passenger vehicles by 2025. Putting this in perspective, the EU aims for a decarbonised mobility sector only by 2050. Moreover, Norway has set targets for banning the sale of new ICE vehicles by 2025, which other nations have only set for 2030 (eg UK) or 2035 (eg Germany).

While Norway has clearly had a head start in many respects, and EV adoption is driven by different factors in different regions, there is much to be learnt from what it has achieved. But perhaps our key takeaway from GEMRIX 2022 is that every country can adopt EVs in the coming years if their respective governments act now and promote investment for the future.

To access the Arthur D. Little Global Electric Mobility Readiness Index, click here.