In our new monthly series, Window on Europe, we shine a light on the best policy ideas coming from the rest of continent, and look at the lessons for the United Kingdom. In this first piece, Christopher Crompton takes a look at Norway’s bold and successful approach to EV rollout. You can keep up to date with these articles and IEEP UK’s other work by subscribing to our monthly newsletter.
Almost all new cars registered in Norway last year were fully electric vehicles (EVs), with almost 96% market share. The country intends to complete the transition this year, a decade ahead of the EU, and well ahead of the UK, where fewer than a quarter of new registrations are fully electric. In some ways, Norway is an unlikely champion of the green transport revolution, but concerted government policy has delivered results.
Norway famously built much of its present wealth as an oil-producing nation. It is also one of the coldest countries in the world, and cold weather can notably hamper the performance of EV batteries. The nation is therefore perhaps an unlikely poster child for the rollout of electric vehicles, yet today it leads the world on EV uptake.
Norway has long been interested in going electric, and its high wealth and small population no-doubt aided the transition. On the flip side, it has had to install infrastructure across many rural and often mountainous areas of its disperse settlements. The lack of a domestic auto industry meant there was no car lobby to resist EV policies, and as early as the 1990s, Norway even made efforts to create its own state company to manufacture EVs. Yet, even with these contextual caveats, the concerted success of vehicle electrification can be largely attributed to two key policy factors – support for a strong charging infrastructure and generous fiscal incentives.
Charging infrastructure
The Norwegian Government was the first in the world to announce, in 2017, a complete ban on new sales of internal combustion engine (ICE) vehicles by 2025. It therefore had to ensure that the charging infrastructure was in place to support the mass transition to electric passenger vehicles.
Norway now boasts almost 27,000 charging stations across the country, with at least one fast charging station on every main road and a travel distance of no more than 30 miles between rapid charge points. A high simultaneous charging capacity also alleviates concerns over queuing.
The Government invested early in charging infrastructure, with a €7 million programme to support 1,900 charging points by 2011, and it has continued that investment ever since. The country has also been sure not to leave poorer households behind in the transition, with financial support for housing associations and legislation ensuring a “charging right” for residents of apartment buildings.
A 2022 study in Norway found that the establishment of a first public charging station led to, on average, a 200% increase in the local electric vehicle ownership rate over five years.
The country’s relatively low electricity prices and high share of renewable energy production further boost the economic, social and environmental benefits of the EV transition.
The growth of Norway’s EV market has nonetheless been nonlinear and highlights the economics of critical mass in the rollout process. In the four years between 2008-2011, only 10,000 EVs were sold in the country. In comparison, the same number sold in about four weeks in 2022. Once the total cost of EV ownership reached parity with ICE ownership, there was a spike in EV sales that in turn triggered a rapid growth in demand for charging stations, further boosting the rollout.
Fiscal incentives
In addition to its robust charging infrastructure, Norway has employed a broad suite of fiscal incentives to support EV uptake.
As early as1990, Norway abolished purchase and import taxes for zero emission vehicles, and in 2001, introduced a VAT exemption too. The Government is only looking to remove that exemption in 2027.
As well as VAT, Norway’s zero-emission vehicles (ZEVs) have been exempt from registration tax and motor fuel taxes, in addition to receiving at least a 50% reduction in road taxes and ferry and parking fees. According to official projections, the stock of ZEVs may have reached 1.25 million by 2030, compared to 225,000 without incentives.
According to a 2025 study, the Norwegian EV exemption from purchase taxes increased the EV market share to 66 percent in 2021, compared to the 25 percent it would have been without the exemption. It also decreased CO2 emissions of new cars sold by 167 percent, although increasing their total weight by 22 percent, and increased the number of new cars sold by 10 percent. However, the lost tax revenues from these taxes imply a high carbon price of 1700 USD per metric tonne, borne by the Norwegian treasury.
Similarly, the implied tax expenditure from the VAT exemption reached USD 1.3 billion in 2021, while the overall advantage of electric vehicles (fully battery electric and plug-in hybrid) was estimated at USD 3.5 billion that year, reports the OECD. The Norwegian Government appears to be now looking to move toward a more sustainable revenue model after these early investments, having achieved its objective with the incentives.
Lessons for the UK
Norway’s bold ambition on EV rollout offers lessons for the UK. While the UK is currently meeting its targets for charging infrastructure, Norway has shown the benefit of always remaining ahead of the curve with these developments. Norway’s “right to charge” legislation also supported EV uptake in high-density urban areas, ensuring apartment residents could still access charge points, and increasing consumer confidence in the technology infrastructure.
Fiscal incentives including the removal of VAT have helped to ensure EVs in Norway are at parity with or cheaper than ICEs. At the same time, Norway’s phase-out of some fiscal benefits over time illustrates a roadmap for adjusting incentives as the market matures.
Perhaps the greatest takeaway for the UK from the Norwegian model is consistency. The Norwegian government have adhered to more than three decades of tax incentives, enduring several political cycles.
The UK Government is looking to support the move in manufacturing towards ZEVs. It is also moving to incentivise EV uptake, with a boost in the 2025 autumn budget to the Electric Car Grant up till 2030, as well as investment in expansion of public charging points. Further, the ZEV mandate, now passed in law, requires manufacturers to meet increasing percentages of EV sales each year (28% for new cars in 2026). This helps provide market certainty, but still clearly lags behind the example that Norway has set. There is also the possibility that a future government could amend or repeal the legislation, removing the long-term certainty of Government support.
In short, the UK is well behind Norway on EV rollout. Our own domestic car lobby and high electricity prices may arguably have contributed to a different political and economic context. But targeted fiscal incentives and concerted effort to stay ahead of the curve on infrastructure provision clearly pay dividends. Could we learn from the example of Norway?
Photo by Michael Fousert on Unsplash