New car registrations have dropped to a historically low level in Norway, slinging the market back to the level of 1962. The slump in sales of all-electric cars is also mind-boggling, dropping to 66,5 percent, where it usually sits above 80 percent. Has the Scandinavian Walhalla for zero-emission cars reset its compass?
In Norway, no more than 1 860 new cars were registered in the first month of 2023. To find a similar level, one has to leaf through the history books landing 61 years ago. The slump follows after a record-high month of December in 2022, when almost 40 000 cars officially found a new owner, and the share of zero-emission models reaching 82,7 percent.
No more EVs?
Compared to January 2022, the latest registrations represent a drop of -76,6 percent The share of zero-emission cars slid even further. With only 1 237 units, the decline is -81,4 percent. One could argue that the saturated market, where in every month of last year, four out of five cars were electric, makes for Norwegians turning their back on plugged vehicles. And cars in general.
The statistics lead to strange phenomena. The market share of hybrids and plug-in hybrids more than doubled (to 24%), and especially more conventional hybrids performed strong, bursting from 4,7 percent in January 2022 to 14,1 percent this year.
But it is important to look at the absolute numbers for both drivelines, which are lower than in the same month one year earlier. So, it’s the decline of EVs that is boosting the market share of other drivelines.
“A significant backdrop was expected,” says Oyvind Solberg Thorsen, CEO of OFV, the Norwegian Road Federation responsible for the statistics. “But nobody thought the numbers were about to fall this low.”
Thorsen points to several causes. One is the released bottleneck for BEV lead times at the year’s end, resulting in a spike in deliveries in December, now leading the market into calmer waters.
“Importers and dealerships worked overtime to get all these cars registered before the new year. Many customers were put on hold for a long time due to the supply shortage and desperately wanted their car in the previous year,” he adds.
The reason is that a new set of EV incentive rules came into effect on the 1st of January, 2023. The government now raises tax on electric cars exceeding 500 000 kroner (€45 600), which used to be exempt.
Preparing for amendments
Looking ahead, Thorsen remains puzzled about the coming months. “January was special, but if the registrations don’t bounce back until spring, it shows how the economy is worsening for many citizens.”
According to Christine Bu, spokesperson for the Norwegian Electric Car Association (Norsk Elbilforening), the authorities must draw lessons from the January surprise: “The government should be prepared to amend their ruling so that the high share of electric cars remains in place.”
Mazda MX-30 benefits
The new rulings by the Norwegian government serve a goal to get Norwegians out of their cars now that EV adoption is almost fully scaled up. In urban areas, car-free zones are sprouting from the ground like mushrooms, and the authorities want to increase utilization rates for public transport.
Since the pandemic, these have dwindled severely as the incentives made cars, although zero-emission ones, popular again. Overall, the market slump isn’t as dramatic as the figures from January might suggest. Last year, the Norwegian car market lost 1,1 percent. But in most European countries, a reverse trend was going on.
The best-selling car in Norway in January was still an electric car, the VW ID.4 (212 units). The hybrid Toyota Yaris Cross (124) followed it, and, surprisingly, also for most Norwegians, the battery-powered Mazda MX-30 (122) took bronze.