Not too long ago, Tesla set up shop in Norway, looking to gain some market share in the frosty nation of 5 million.
Little did anyone know just how big the share would grow.
According to Freakonomics, Norway is the second largest market for the premium EV automaker, with March 2014 being the best month in Model S orders thus far. However, not only was it the best month for Tesla, it was the best month for breaking a record: 1,493 units registered, the most units ever recorded with Norwegian authorities in one month since Ford moved 1,454 Sierras in May of 1986.
Through the first nine months of 2014, the automaker averaged 435 regisrations per month, despite the price for a new Model S beginning at kr461,000 (~$68,000 USD); never mind how much a used Model S goes for up there.
How is this possible? Subsidies and incentives so huge it would make the Japanese government blush. Those subsidies help bring the price down to levels found among gasoline-powered vehicles, and are fueled, ironically, by a sovereign wealth fund created from Norway’s massive oil reserves. The fund was created to future-proof the nation from “Dutch Disease”: Over-specialization in the production and export of natural resources at the expense of every other industry in a given country.
Alas, those subsidies won’t last long: Only the first 50,000 registrations will enjoy the perks of pushing a green future.
Saudis buy silly sh1t, too. Novelty and oil wealth.
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Please check your numbers. 461000 NOK are not 100000 USD. But…due to subsidies/left out taxation, a 600000 NOK Tesla S is priced quite like the cheapest Volvo XC70. Which is also pretty spot on when it comes to compeition: Affluent, middleclass people.
The Tesla S has been Norway’s most sold car before, even without breaking such a solid, 30 year old record.
Indeed, there are Teslas everywhere in Norway.
The Norwegians I spoke with said that regular cars are taxed heavily, and simply not taxing EVs (or taxing them less) can make those cars cheaper than ICE cars despite the higher initial price tag.
It isn’t just the taxes. EVs are exempt from tolls and can use transit lanes, plus they get free parking.
I didn’t see any paid parking or toll roads when I was there, and the locals made no mention of those things.
It really depends on where you live. The capital of Oslo is surrounded by toll roads, and there are a lot of paid parking in the city itself, so when you include the saved gas money, for some everyday commuters the car is almost paying for itself. There are a lot of places in Norway where it would make no sense to buy a Tesla,well, except for the ‘luxury car for half the price’-thing.
Your municipal areas must have excellent and dependable snow plowing to permit driving these lumpy ground-huggers.
A BMW or MB of comparable size and power costs more than $200,000 after taxes in Norway, so the exemption from new car taxes means a Tesla is a luxury car for less than half price. It is somewhat embarrassing to Norwegian officials, because they enacted the EV subsidies with small runabouts such as the Think, Buddy, and G-Whiz in mind, which has created some problems with the free parking and free recharging stations, because the Tesla takes the space of two “normal” EVs. They also expected the cash value of the subsidies to be more like $10,000 per customer rather than the $100,000 per Tesla customer, who more often than not are the wealthiest citizens of the nation.
Nissan has sold plenty of Leafs there, too; it has at times been the #1 or #2 selling nameplate for a given month.
There’s a very interesting Freakinomics podcast on this very subject. There are tax breaks, free parking, ablity to travel in bus/hov lanes and other perks if you have an electric car
Norway will need a huge slush fund.
GDP 2013 was 0.6 percent and, at least among EU18, positive.
Consumer debt to income ratio is 180 percent.
Norway HAS a huge slush fund. It’s probably the only country on this earth which has used all the cash from its oil reserves rationally.
As in, by helping create high paying jobs, and valuable IP, for non Norwegians around the world….
EDIT: Including Tesla, come tho think of it…..
In a country of 5 million, less than Massachusetts, the 1493 Teslas sold in one month is astounding, equivalent to 1.1 million annually in the US.
Just how big ARE those subsidies?
The Scandinavian nations really are the shining counterpoint to the adage that government can’t do anything right.
It seems like citizenry really get the government they a) expect, and b) deserve.
Not really. We just got lucky and found oil.
Norway found oil. That doesn’t explain how well governed the rest of Scandinavia is, or even Norway’s success before the North Sea oil was exploited.
Quick Google search:
“And yes, Norway is one of the most heavily taxed countries in the world with a total tax burden of roughly 45% of GDP– almost 4x Hong Kong and nearly twice the US. VAT here is a whopping 25%. Personal income tax rates border 55%.”
No thanks.
Better educated, healthier babies, happier and longer lived. You don’t want any part of that?
I’m better educated than most Norwegians. Healthier too, despite their almost pathological obsession with oneupping one another at anything from the bicycle commute to work to a cross country ski trip.
Spending your whole life at gunpoint being told government is somehow a useful institution, while being forcefed cod liver oil and barred from eating anything deemed less healthy, makes for a very impressive showing in the “Progressive dronelings of the year” contest. As far as a life goes, it still kind of sucks, though.
Enterprising. I’ve never seen anyone hate on Norway before.
When was the last time you visited a Scandinavian country?
Care to share your educational credentials, too?
*crickets chirping*
“Better educated, healthier babies, happier and longer lived. You don’t want any part of that?”
I have a master’s degree, five healthy kids and people in my demo live to over 80.
I don’t judge America by how some guy living in a Kenmore box under an overpass lives. Of course, he’d be better off in Norway. Not me.
I’ve met a few Scandinavians who would beg to differ. Life is good if you’re part of the state-managed economy, either administering it or receiving handouts from it (like tax-free cars). But if you want to chart your own course, you can expect to be squished quite promptly.
This dual-track society breeds corruption, as some rebels feel obliged to profess loyalty to the oppressive social democratic party line while covertly operating outside it.
Scandinavia, like Japan, enjoys presenting a homogenous face to the outside world. We in the chaotic, heterogenous English-speaking world devour their myths, thinking that if we could just abandon our culture we could be happy, prosperous and oh-so-organized just like the Vikings and Samurai warriors.
More like: The 1)smaller and 2)more homogenous the country, the less wrong government will generally do.
1)If the Norwegian oppressors got too frisky, you can just bolt for Sweden. Ditto for Denmark and Finland.
2)As long as all Norwegians were cloned from the same cell, and were raised the same, there will be a fairly high degree of agreement about what needs to be done. Even absent government, the Norwegian concept of “Dugnad”, or people just getting together and doing something voluntarily, popularized around the world by the Norwegian founded Brunstad Christian Church; just doesn’t work to well unless there is a very large degree of uniformity of goals and aspirations.
Other tiny Euro nations tend to look good in “quality of government” statistics as well. Because their small size puts external constraints on how bad government can get. And those constraints seem to, in practice, have worked better at constraining, than any bunch of documents written by Dead White Guys.
Anyway, the solution is simple. Thousand Nations.
Most people wait till later in the day to get hammered.
But then, who knows what time zone you’re in?
In a country of 5 million, 1493 Teslas in a month is astounding, equivalent to 1.1 million in the US annually.
If you could get a car that is close to a BMW 550i Gran Turismo for the price of a loaded Ford Fusion in the US, what car would you buy ?
Then add in the free toll roads, parking, reduced fueling costs (gas is $2.50 pr litre over here)
I’m looking forward to swimming in cheap used Teslas 15 years from now, just like I did with the previous record holder, the Ford Sierra :)
@Psar
+1