From California to Oslo: Foreign subsidies fuel the electric car boom in Norway

OSLO (Reuters) – In the suburbs of Oslo, a row of Fiat 500s imported from California parked in the snow in front of the dealership Buddy Electric is part of a worldwide stream of used electric cars at destination. Norway, fueled by ecological subsidies elsewhere in the country. world.

The company's production manager, Tor Einar Hanssen, said he had sold about 110 in the last 18 months, making a small profit on cars, most of which had been used by American leasing.

"They are surprisingly good in cold weather," he said.

A brilliant blue Fiat 500e is on sale for 129,000 Norwegian kroner ($ 15,000) with 24,000 km (15,000 miles). According to Hanssen, importing and adapting each Fiat costs about 20,000 kroner ($ 2,300).

On used car websites, similar FIAs in California are advertised at around $ 10,000.

Norway has the highest rate of electric motorization in the world, thanks in part to long-term benefits such as free or discounted tolls, car parks and charging points, which make the models more attractive. unwanted opportunity elsewhere.

The government is also exempting electric vehicles from the traditional vehicle tax, which is very high in a country that does not have its own fossil fuel-based automobile sector. The discounts offered by other countries are another part of the equation.

In California, residents who own a new battery-powered electric car for at least 30 months can get a rebate of up to $ 4,500, said John Swanton of the California Air Resources Board.

The Fiats show how different incentives around the world to promote electric cars, spurred by efforts to combat climate change and limit air pollution, can affect trade flows.

They may also distort national targets for fossil fuel substitution, although US exports to Norway of 4,232 used electric cars in the last two years are minimal compared to US sales. The state of California alone aims to have five million zero-emission vehicles on its roads by 2030.

The issue is having a bigger impact in some European countries, which may overestimate the ecological character of their national car fleets because of their exports to Norway, where the major refueling cars include the Nissan Leafs and Volkswagen. , BMW and Tesla.

"We are getting a certain amount of vehicle electrification for free, paid for by other countries," said Lbade Fridstroem, chief economist of research at the Norwegian Center for Transport Research.

"But maybe it will not last," he said of imports of used electric cars. With some dealers, he said the demand for electric cars in Europe is increasing and that Norway could become a net exporter of electric cars in the coming years.

(For a graph on "Used Electric Vehicles in Norway", click on tmsnrt.rs/2Hy4lsB)

NECK

At present, the long waiting lists for new electric cars in Norway mean that people who get a new model in high demand, such as the Tesla Model 3 or the Hyundai Kona, can potentially resell at higher prices than catalog prices already higher than elsewhere. .

One of the reasons is a bottleneck in imports of new electric cars. This is due, to a certain extent, to incentives for car manufacturers to sell electric cars in the European Union, of which Norway is not a member, even though they are immediately exported to Norway.

To address this problem, starting in January 2019, sales of new cars in Norway are included in a more general EU calculation of the ecological character of the vehicle fleets of each manufacturer at European level, which the constructor must reach to avoid heavy penalties.

This could reduce Norway's import demand, but could also mean that its EU neighbors are recording fewer sales.

Last year, rechargeable electric cars accounted for 31.2% of new car registrations in Norway, the highest in the world, and their share rose to 34.2% with second-hand imports, according to the Federation. Norwegian Highway (OFV). Both figures jumped to 40.7% and 43.5% in February 2019.

According to Norwegian statistics, 11,913 used cars and light-duty trucks were imported last year, up from 9,063 in 2017, when it began to compile data on second-hand trade.

They came from countries such as Germany, the Netherlands, Sweden, Britain and South Korea, bringing some of the benefits of air quality and noise reduction intended to their citizens in Norway, where the environment is already much cleaner than in many other countries.

Trod Sandven, a Jaguar Land Rover dealer in Bergen, western Norway, bought 250 new Kia Soul cars last year in several countries, including Germany. After registering them for a day in order to take them into account in achieving the green objectives of the manufacturers under the EU regulations, he exported them unsent to Norway to sell them as "second hand".

"They are new, with plastic still on the seats. The only thing we do is the paperwork, "said Sandven. He said he did not receive any German subsidies, as it would require owning the cars for several months in Germany.

"Now it's changing again, now we're exporting cars to other countries," he said. "Norway is full of used electric cars and Europe is screaming for electric cars. It changes every year. "

SWEDEN MOVES

Stockholm tightened the subsidy rules last July after finding that about 10% of all electric and rechargeable hybrids had been exported within five years. Eighty percent of these exports came to the Norwegian border.

"It is problematic that some of the used electric vehicles, which have been subsidized by Swedish taxpayers, are being exported," said Jakob Lundgren, spokesman for Swedish Environment Minister Isabella Lovin.

Under the new system, as of July 2018, Swedes must own a new electric car for six months before receiving a discount of 60,000 Swedish crowns ($ 6,398.50). Previously, they benefited from a discount of 40,000 crowns on the purchase of the car.

Lundgren said there was no data yet to know if the rule change had an impact.

With only five million inhabitants, Norway bought 46,143 new electric battery-powered cars in 2018, making it the largest market in Europe ahead of Germany with 36,216 and France with 31,095, according to the report. Association of European Automobile Manufacturers.

The EU rules in force from 2020 to 2020 will force new cars sold in Europe, including Norway, to average only 95 grams of carbon dioxide per kilometer, with automakers facing hundreds millions of euros in potential fines for nonconformity.

Other countries tend to give subsidies to make electric cars cheaper, but their infrastructure is late, such as charging stations. Norway wants all new cars to be zero emissions by 2025. Among other countries, Britain and France have similar goals for 2040.

Electric cars are depreciating less quickly than elsewhere in Norway, partly because of the current benefits, including low-cost ferry travel and the use of bus lanes to avoid traffic jams.

"Norway has become an attraction hub for the rest of Europe shipping used battery electric vehicles," said Matthew Harrison, executive vice president of Toyota Motor Europe, at the Geneva Motor Show. this month. "Frankly, there is no demand for battery-powered electric vehicles in used cars" elsewhere in Europe, he said.

Among the sources of second – hand imports, Fridstroem and other economists said they were confused by those in Britain. Norway imported 2,147 electric cars from Great Britain in 2017 and 133 in 2018, according to Statistics Norway.

The driving of British cars is right, the wrong side for driving in continental Europe, which makes them less attractive in Norway.

A spokesman for the UK Department of Transportation said that the prerequisites for plug-in car subsidies, up to 3,500 pounds ($ 4,624.55), were that buyers have an address in Great Britain. Britain and register the vehicle in the country.

The department did not comment when asked if some dealers could buy electric cars built in Britain but designed for continental Europe. It could be a loophole allowing dealers to pocket the subsidy and export the car to Norway without knowing why the number of exports had decreased.