Home Economy Norway’s electric car miracle is a smug national fraud built on subsidizing rich people with Teslas

Norway’s electric car miracle is a smug national fraud built on subsidizing rich people with Teslas

by engata
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The government in Oslo spending billions of oil export dollars to help the affluent buy an electric second car they wouldn’t otherwise want is European environmentalism at its phoniest and most hare-brained

It’s not that you can’t financially encourage societies to be more planet-conscious, but this charade of perverse incentives, inefficiencies, and negative side effects is not it.

Norway’s electric car miracle is primarily one of numbers.

Last year, EVs accounted for 49.8 percent of all cars purchased in the country, and so far this year three in five new cars bought in Norway are electric. For comparison, 2.1 percent of new cars registered in the US last year were EVs, while for the EU the figure is even lower – 0.9 percent.

Thus, with a population of only 5 million, Norway has become the world’s third biggest electric car market in the world.

This has burnished the Scandinavian country’s credentials as a land populated by uniquely-ethical people.

But how has this incredible outlying result been achieved? Pure shameless bribery from the state.

By dropping VAT, CO2 tax and weight tax a Tesla imported for $70k becomes cheaper than an Audi that cost $35k when it crossed the Norwegian border. Add in the lowered road tax and free passage through toll roads, free places on ferries and free parking, as well as the difference in the fuel price, such cars are 75 percent cheaper to operate.

Norway is spending about $2 billion each year on the subsidies – as much as it expends on parental leave pay – and with the current uptake rate and existing rules the current figure will balloon into the tens of billions.

Surely, to cost so much it must be the most efficient way of fighting CO2. But it isn’t, because there are tens of different practical means of reducing carbon output that give more bang for the buck, while buying the equivalent carbon credits – which could then go unused – is, without exaggeration, thousands of times cheaper.

At least you are taking conventional cars off the road… Well, not really. Two-thirds of the EV buyers have another internal combustion engine car. Similarly two-thirds of households buying their only car, will still buy traditional engines.

A saleswoman demonstrates how an electric car is charged at a showroom in Oslo. ©  REUTERS/ALISTER DOYLE

Because other than for urbanites making regular short city runs, owning an electric car is impractical, particularly as your sole means of independent transportation in a country with a small population scattered over great distances.

Unsurprisingly, studies show that rich people are many times more likely to invest in an electric car – particularly since there are few second-hand ones available – than poor people. And then they still use it less than their main car.

One thing it replaces though is public transport, which becomes less financially attractive, and more troublesome, what with the EVs clogging all the dedicated bus lanes they are allowed to use.

This all fits together, as in the end, all these exemptions are not about driving less, they are about motivating car use, just in more varied forms. The use of petrol has barely declined 10 percent in the past five years since this green revolution started, and as has been pointed out elsewhere, much of the reduction is simply through cleaner petrol vehicles replacing outdated models.

But forget all the numbers, the failure of this policy was predictable just on an intuitive level. As it is any time you use grotesque market distortions to force people to obtain an inferior product. Look at your mobile phone. Now imagine that the government tells you that it will sell you a fancier-looking handset for half the money, but that it will only work where there is Wi-Fi. I guess if you have the spare cash, you’ll buy it, but you won’t use it all the time, and you probably won’t want it to be your only phone. So what you have obtained is a trendy plaything, and one made from expensive materials that was sent to you from half the world away.

This is exactly what these electric cars are – imported playthings. Not to mention the egregious oddness of the government trying to push you so hard into undesirable consumer choices.

Because if you think people actually do want electric cars, and would consider buying them without all these handouts once they’ve tried them and the infrastructure is there, consider the case of neighboring Denmark. In 2015, with lavish subsidies – though nowhere near as rich as those in Norway – nearly 5,000 vehicles were sold. In 2017, incentives drop, fewer than 1,000 vehicles were sold.

Equinor’s oil platform in Norway’s Johan Sverdrup oilfield in the North Sea ©  REUTERS/NERIJUS ADOMAITIS

The whole masquerade illustrates a deeper truth about Norway. The country unironically purports to be carbon neutral – it is lucky to be mountainous enough to have sufficient hydropower to serve its needs – yet is the world’s 12th biggest oil exporter and 2nd largest supplier of natural gas. If it really wanted to tackle CO2 emissions in the world, it would simply curtail its extractive industries, rather than pumping the taxes collected from these industries into indulgent white elephant schemes to purchase slick new cars for its ethically-pampered burghers.

But Norway doesn’t really care about the world. It claims to be setting an example to other countries. But its electric car revolution is unaffordable to any but the wealthiest states. And its uniqueness appears to be a way for a privileged society with a superiority complex to smugly signal its exceptionalism, its self-proclaimed progressiveness. Let them drive Teslas.

By Igor Ogorodnev, senior writer at RT

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