How Norway Built An EV Utopia While The U.S. Is Struggling To Go Electric | CNBC Documentary

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Norway, the land of the midnight sun is filled with mountains, glaciers, fjords, and electric vehicles. A lot of them. The Scandinavian country boasts the highest EV adoption rate in the world. More than 82% of new car sales were electric vehicles last year, and that number goes up to over 90% if you include plug in hybrids. Our goal is that all new cars by 2025 will be zero emission vehicles. We think we're going to reach that goal. In the U.S., a measly 7.6% of new car sales were electric in 2023, up from 5.9% in 2022. In the world's largest auto market, China, 24% of new car sales were EVs in 2023. Norway's capital, Oslo, is also electrifying its ferries, busses, semi trucks and even construction equipment. All public transportation within the end of this year will be zero emission in the city. Gas pumps and parking meters are being replaced by chargers. It's an electric utopia of the future. What is this? Welcome to my man cave. So how is Norway's grid been able to handle all those EVs? A lot of hydropower. Electric cars is maybe a third of the price of gasoline. Because we have close to 100% hydropower. It's cheap. It's available and renewable. So that's a big advantage. The rapid expansion certainly hasn't been perfect. There are some side effects that we have to observe. We are pushing cars basically on the public. So there has been an increase in the total amount of cars bought. We want the change, but maybe not at this pace or this volume. So how did Norway pull off such a high EV adoption rate, and what can the U.S. Learn from the country? We flew across the globe to meet with experts, government officials and locals to find out. We flew into Oslo Airport and picked up our electric rental car. I'm here picking up my rental car, and I've never seen so many electric cars in a rental hub before. iX3, my first time driving an EV. Let's see how this goes. The first thing that was noticeable as we were driving was the lack of tailpipes on the cars on the road. Tesla is the most popular brand on the roads in Norway, with a 20% market share in 2023. We saw them everywhere. The Tesla Model Y was the most sold car in the country last year, followed by the Volkswagen ID.4 and the Skoda Enyaq. All zero emission electric cars, they have license plates that start with E, so it's always easy to spot them. California has the highest EV adoption rate in the U.S. 21.5% of new car sales were electric in 2023, a figure that has doubled in the past two years. But Norway made California look like it was in the dark ages. There are chargers everywhere. The streets are quiet in Oslo. The air is pleasantly free of fumes. There's been a noticeable improvement to the air quality in the city. Yeah, it is so around 20% reduction of local pollution. It was actually noticeable when a gas powered car sputtered by. We did find a few people who still drove gas powered cars. Some couldn't afford to buy a new car, and others still couldn't get past range anxiety for long trips. Despite the abundance of chargers. I need to have a Land Rover because I'm going to the mountain and that's, uh, a little bit too long for the electric car because I also have electric car for use in city, but not for mountain. But most people we spoke with were on their second or even third EV already. I've been driving electric cars since 2012. We just got a new one that's a Tesla and, uh, very, very happy with it. We have two electric cars at home. Anything you miss about driving a gas powered car? No, no, actually, no, because it was so expensive. Like when I see the gas prices, I'm like, God damn, it's so expensive these days. So no, actually I'm not looking back. Why is Norway so far ahead of the rest of the world? When it comes to electric vehicle adoption? There is a combination of a lot of different policy measures that has taken place over the last 20 years. We started off actually in 1990, first measure. We had the Olympic Games in Norway in 1994. So some of the producers wanted to introduce electric vehicle cars by then. There was this car called, Think, which was really, really small, and it was made basically a joke back in the day because no one really wanted it. Think never actually took off and the company was eventually sold to Ford. The whole parliament agreed on that there is some kind of public responsibility to push forward the green mobility. And we set a goal for 2025 that all new passenger cars should be zero emission. And when you have set a goal like that, you have to put some incentives to make it work. We started off by having a zero registration tax, and then the biggest measure we introduced was zero value added tax. So in Norway there's a 25% value added tax for every item you purchase. But reducing that to zero for the EVs had a massive impact. But despite of all these measures, nothing really happened. Nothing happened because EVs were not readily available then. But it all started to change when Tesla and others started selling EVs in the country. So we've seen a vast increase in the last ten years. So now eight out of ten new cars are zero emission vehicles. The remaining 20% is plug in hybrid and some few petrol cars as well. So if you want to buy a new car in Norway, there's very high taxes on polluting cars. But for zero emission cars, they are exempt. So that made EVs cheaper or the same price as a similar petrol or diesel car. And we also have discount if you drive through the toll roads with an EV, free parking in some cities, and also driving in the bus lanes, is also a very popular incentive for EVs. Peter Haugneland is the Assistant Secretary General of the Norwegian EV Association, which launched back in 1995 to support consumers in the transition. We have over 50 employees now, have a call center for EV owners, especially the new ones. They need help how to do this. How do the subsidies work? When you go to purchase a car, is there a lot of paperwork or is it just a cheaper price when you purchase a car? You don't have to do anything, you just pay the price, so it's really easy. The electrical car will be cheaper to purchase. It's cheaper to use. So the electrical bill is smaller than the bill for diesel and petrol. So this has to be the main goal, to make it easy to choose and cheaper to choose. Have there been any negative consequences to this plan so far, maybe something unexpected that has come up? I think this is a great success. We have changed the preferences for the public and for the user and also from the market. So I've been asked this question before, but I can't think of anything. But Syrstad did mention that on top of more cars being on the road than ever before, another consequence has been more people are now choosing to drive their EVs instead of taking public transportation. People rather choose to go by car into the city than by bus. So there has been some local adjustments when it comes to the price of traveling by public transport, making it cheaper so it can compete with the zero emission vehicles. Where's the money coming from? This is public spending. So it's from the state budget. What's the annual expense for the government for these incentives? It's a less and less, but I think it's about 40 billion NOK yearly. So far they've spent about $20 billion and we're still spending about $4 billion a year. So there's $1,000 per inhabitant, or $800 per inhabitant, in terms of subsidizing electric car purchases, which is quite a lot. You get an S-Class for the same price as you get in medium sized sort of economy car that runs with an internal combustion engine. Norway is a wealthy country, and much of that wealth has come from its robust oil and gas industry. Norway is western Europe's largest oil and gas exporter, and the industry is expected to make up 24% of the nation's GDP in 2024. The gas export has increased over the last years due to the war in Ukraine, and it's very important for Norway to be a stable energy partner with our neighboring countries in Europe that suddenly experience a drop in the supply from Russia. But Norway also, we have our goal 55% reduction of emissions in 2030 compared to 1990. That's the same goal as total in the European Union. Well, that's something the oil industry also knows. So they are planning on what next, what's the new type of energy they will produce. So we have now a massive plan for wind production on the Norwegian continental shelf. So we're all working with this transition year by year with the same goal in 2030. We have a lot of discussion about the oil industry in Norway. The Norwegian government has said that we will go for electric cars anyway. The discussions are decoupled and we see now with almost a quarter of all cars in Norway are fully electric now. Also, the demand for petrol and diesel is going down. That might be also a wake up call for the global oil industry, that maybe the future is not bright for them. Norway took its oil wealth and it just did not spend it. We put it into the world's biggest investor, which is called Norges Bank Investment Management and owns 2% of most companies in the world. So we've been pretty good at sort of thinking long term about those things. Birger Steen is the CEO of Freyr, a battery company that is part of the energy transition in the country. Freyr is building a Giga Arctic factory in the northern part of Norway, as well as a battery factory outside of Atlanta, Georgia. The first application of our batteries would be in the power grid. So the solar power plants as well as wind power plants. Our hope in the battery industry is that when it comes to the IRA, with the Inflation Reduction Act, it's actually the U.S. that's leading the way in thinking of long term and what it takes to to sort of stimulate the market to function better. And so we hope that both the European governments and the Norwegian governments are going to do that as well as the Americans have. Would you say that the environment is a very important piece to why people are buying electric vehicles here, or is it the the price of the cars? I don't think Norwegians are more environmentally concerned than other people. So it's the economic that is the most important. Climate emissions is of course a nice bonus and also important for our small group of people. What would you say the next couple of years will look like as far as getting to the final stretch of meeting the 100% goal? The remaining parts is the plug in hybrids. The Parliament has asked for removing all the benefits for those, so it will be treated as a normal petrol car in the tax system. So Norway made EVs quite a bit cheaper than gas cars. But what about charging? It subsidized that at first as well. In the early days, it was heavily subsidized. Not so much nowadays, there are some rural areas where you might be able to get some some subsidies from the government. That's been very helpful to get the charging infrastructure up and going. Bernt Otto Fjellestad is a project manager at Mer Norway, one of the largest fast charging companies in the country. It has installed more than 35,000 fast chargers throughout Europe. Tesla is another one of the largest charging companies in the country. It launched Europe's first supercharger network in Norway over a decade ago. Did Tesla build out the supercharging network before the other companies? They have been really helping growing the market share for EVs in Norway as well. We had Elon Musk visiting a couple of times in Norway, but of course it was just recently that they opened up their network for other cars. So now it has been really also beneficial for non-tesla owners to use superchargers. We went on a charging safari while we were in Norway, and saw firsthand what these partnerships look like. We met with Stian Mathisen from Recharge as well, one of the largest charging companies in Norway with more than 2,600 charge points in the country. Why do you think McDonald's agrees to have charging on site? Well, it's kind of interesting because all of a sudden they are competing with the, what used to be called gas stations, but now we call them energy stations in Norway. And they're in a whole new market, they can sell energy to cars as well as energy for people and food. Retailers are also involved, hoping that folks make some purchases while their car is charging. We saw a massive charging station at an Ikea in Oslo. How much did this station cost to build? This one in particular is kind of, it's so big. So it's easier to sort of talk about the smaller locations, but a smaller site will maybe cost somewhere around the equivalent of $200,000. But it depends a lot on how many charging points you're going to put up and especially how much power you're going to need from the grid, because that's kind of a big X factor. The grid install can be very costly. Is Recharge a profitable company? We have investors that put a lot of money into our company. And investing in infrastructure is very capital intensive. So we have been building a lot over a course of more than ten years, but our owners believe that we are going to be a profitable company. That's why they invest in us. What would you say came first in Norway, all the chargers or all the electric vehicles? Yeah, chicken or egg? It's the cars that came first in Norway. We didn't have any support for charging almost. Of course, the first movers, they charged at home. So that's also, of course, the most common way to to fill up your electric car, to charge at home. I only charge maybe twice a month or something on fast charges. Of course, if you live in an apartment building, then you maybe be more dependent on fast charging. But it's also more expensive to fast charge. So the best is to charge at home. When they first started rolling out EVs here, the people that lived in apartments were complaining that there wasn't great charging options for them. So the city of Oslo has put in chargers like this all around town, as well as in parking garages all around town also. Welcome to my man cave. Actually, we built this in 2017. It's a bomb shelter and still is, from the Cold War. '50s, but we actually converted it. Only EVs are allowed here. I think it was actually the first parking garage in Europe reserved for EVs only. So you can see all the way here, it's up to 86 cars, which can charge at the same time. Sture Portvik has been the manager of Electromobility for Oslo since 2014. Oslo has been a European leader when it comes to EV infrastructure. It's experimenting with parking spots that charge your car. It converted all city busses to electric. It's working on electrifying construction machinery and semi trucks, and it also has installed more than 2,000 public chargers in the city. Who has paid for all this? The city acted as a first mover, so we had to step out and put up chargers. At that time, charging was for free, so of course the city paid a little bit. But we see now that now you have to pay a small user fee, and that means that it's not actually the tax payer. It's paid by user payments, but a little over time. Oslo also electrified its fleet of ferries. It's the first city in Europe where all public transportation is zero emission. So I love these ships. They are used by millions of passengers every year. It's charging as we speak and it takes around five minutes because it's charging on 3.5MW. And that is pretty fast, million watt. I'm curious, was it a challenge to install these large chargers on the docks? Definitely. The building behind us is actually a converted fisherman's office. We stripped out everything and it's actually now working as a big net station to be able to provide that amount of capacity that is needed. It's a lot of batteries and a lot of electronics. And yes, they are expensive, but the fuel itself is based on hydropower, 100% renewable and zero emission, and far cheaper than diesel. So in the long run, this is also a good business case for the public transportation company. How long has Norway relied on hydropower for energy? Approximately 120 years or something like that. Very glad we have hydropower because it works as a battery towards all the other energy sources that are more variable according to weather, if it's sun or windy. The wind capacity, we are planning to invest in in Norway, we'll double our power production by 2040. How does it work with the utility companies when you're building out a new site? When we're building out a new site, we have to get an agreement with the landowner to be able to to use that location. We also need to have approval from the authorities. The electrical infrastructure in many areas are already quite overloaded, so it's becoming more and more difficult to to get the amount of electricity we need. But the grid companies are working along us and we're trying to find the best solutions. The demands for the grid will ever increase. It is not something that has been, you know, prohibitive in any way so far. But yes, it requires additional investment. Yes, it will get harder and harder to get grid connection to where we actually need it. Gas stations, now called energy stations in Norway, are getting involved in seeing the benefit of installing chargers. Is it actually the gas station company, Circle K, that paid to put these chargers in? Yeah. So the fast charging market is more or less fully commercial market. Circle K is one of the big fast charging companies in Norway and also the biggest gasoline chain in Norway. Are they going to be able to make as much money from charging as they did from gas? Well, they don't have a big profit on gas either. Mostly it's also the convenience store where they sell food and coffee and drinks. That's also, of course, more relevant for EV owners because when they charge, it takes more time than filling up a tank of gas. So maybe they stay here for 20, 30 minutes. They can make money there as well. There's a company called Certus that runs this Esso station. We have a deal with them that we split the costs 50/50 for the whole installation here, but then we also split the income 50/50. The gas stations are diversifying with deals like this because fuel demand from passenger cars has fallen more than 20% in Norway since 2016. So they are putting up fast chargers as well because they want the customers, they want them to go inside, buy the hamburgers and the Cokes and things like that, because that's where the margins are. But reliability of chargers has been an issue. Some say there isn't range anxiety in Norway, but instead there's charging anxiety. What has been the biggest complaint from electric vehicle owners would you say? It has been charging queue and chargers not working. Now the market is more mature, so it's less of a problem. Still happens, but not as often. Now it's the payment systems that are like the biggest pain, that you have to download an app or different payment solutions for every company. So it can be a bit confusing, especially for new EV owners. Is there a way to do it without downloading an app? We experience charging anxiety the first time we tried charging our rental EV. We first went to a Tesla Supercharger station near Oslo's airport. In Norway, Tesla chargers are supposed to work for all EVs, but we tried multiple ports and couldn't get any of them to charge our car. I just tried two different superchargers. These are the brand new v4's and I couldn't get it to work. We gave up on the Tesla chargers and went to a nearby recharge station instead. But at first, we couldn't get that to work either. I think I'll probably have to get off the phone to download the app. Luckily, the customer service agent spoke English and we had to download a new app in order to get the charger to work. The U.S. is making the same mistake with chargers. Each charging company has their own apps, their own payment methods. But it needs to be as easy as pumping gas in order to achieve mass adoption. Norway is working on improving this with regulations. Now the big problem is to get access to charging because you can't pay with a credit card here, you need to download an app for every company. And now, finally, we're also starting to install regular card payment terminals, like credit card or payment card terminals. We know a lot of people have been waiting for those. There's regulation both at the EU level, which means that all the countries in the EU need to have card payment terminals on their chargers going forward. And also Norway has put in place its own regulation, which is even stricter when it comes to deadlines for when this needs to happen. Once we did get it to work, I was pleasantly surprised how quickly the DC fast charger filled up the car. Just finished charging. We charged the car to about 70%. It only took 15 minutes or so. It went really fast, so that was pretty impressive. Once we actually got the charging to work, it worked really well and went really fast. Very simple, in Norway it's so practical. You can charge anywhere. So we have a charger in our house. My husband can charge at his work. I can charge it there too. Tesla launched its new fast V4 superchargers in Norway before the U.S. We visited one that had just opened. What do you think of these new V4 chargers? Yeah that's amazing. Yeah, that's incredible. It goes so fast. You're staying for ten minutes and suddenly you have like the possibility to drive for two hours. That's phenomenal. It's faster than getting fuel in your car. I'm really happy with the Tesla. I save a lot of time using Tesla, because before Tesla, the other car I was driving, I used to charge three, four times per day. But now, sometimes I use to charge one time with just ten minutes of my time. So I save a lot of time with Tesla. Anything you missed about driving a gas car? No. You see, nowadays it's very cheap electricity. And it's the network for charging is very, very good. Often in the summer I go in north Sweden and north of Norway. My family is there. It's very good. We spent a week in Norway and there were a few moments where we felt range anxiety. We drove out to the countryside and didn't spot any chargers along the way. Hopefully our battery lasts us because it feels a little sparse out here. The other time we felt range anxiety was on the way back to the airport at the end of our trip. Note to rental car companies, it should not be a requirement to return a car fully charged. This is not convenient for travelers that can't charge at home. Do you ever have range anxiety? Not anymore. I used to, because I was one of the first that bought a Nissan Leaf, the first generation. And I loved that car. But of course the range wasn't easy. Especially in the winter time. I used it to the cabin and one time I had to top off the battery three times with fast charging. But today, it's really not a problem, so no worries anymore. A lot of people don't think electric vehicles are very great in the winter. What do you have to say about that? Well, they are better because you can preheat them so you can come to a warm car. Cozy car. Of course, the battery is, when it's cold, it's not as efficient. But with bigger batteries now, preheated batteries, better charging infrastructure, it's not a problem. I've heard the battery drains faster in the cold. Yeah, that's true. Of course, you cannot drive the same amount of stretches. I would say that if your car handles like 400km in the summer, it's probably not more than 320km in the winter. That's the way it is. But you have to plan a little bit more, but it's really not a problem. How is it in the winter? No, really good, because it's so heavy. So you're able to get to your cabin either way. Because that was something, because my parents have a cabin, that was my main worries we had before driving Tesla. But since it's so heavy, it goes so well. Now that it's close to it's 100% adoption goal, Norway is considering making some changes to the incentives. EV drivers use to get access to the bus lanes, but the bus lanes became so crowded with EVs that they changed it to EV carpools only now. There are some rolling back on the subsidies that are in place for the use of EVs, especially when it comes to the use of the public lanes. The discount for parking, discount for use of ferries, and discount on road tolls. These are gradually being phased down, and eventually they will be probably phased out because the electric vehicle car is the new normal. We have this CO2 tax, but of course when you get to 80% market share, then you don't sell a lot of polluting cars and you don't get a lot of CO2 tax. So then you have to lower the incentives for EVs as well. But of course the technology is getting better. The production price is going down. Again today, you don't need as high incentives as we did ten years ago. Has there been an issue with more wear and tear on the roads since the cars are heavier? That is more a question when it comes to exemptions from taxes and so on, because more and more people are arguing that also the electrical vehicles have to pay their fair share of that. When we are fully electrical, of course, electrical vehicles have to pay their fair share amount of using the roads. Has there been an issue with batteries degrading over time? And I am curious if there's a plan in place when an electric vehicle reaches its end of life. Is there battery recycling that happens here in Norway? There is a European plan for recycling batteries and some projects also in Norway where you can hand in the batteries. There are common EU regulation for recycling of batteries, and this is an important aspect for the way ahead, because we want EV vehicles to have a long life span in Norway. Norway has a robust used EV market as well, and everyone we spoke to said the batteries hold up well over time. This is a used Tesla? Yes. This is from 2014. Is there a big used EV market here in Norway? Yes. It's very many electric cars. You bought this in 2017? Yes. Okay, great. Yea that's a long time. I drove 200,000km and the battery is, I checked it was just 3.5% missing kilometers. Not bad. No, that's not bad. But you have to take care of the, don't charge too much. I never charge more than 80%. What would you say to someone who says that electric cars are just as bad for the environment as gas powered cars? This argument is the reason we don't want to rush the transition more than necessary. So that's why we are concerned about, the high volume of sales. That we've been pushing cars maybe too much, and the number of cars, increasing. And we want people to use the old car for its entire lifespan. We definitely can see the different environmental aspects of producing cars itself. It's a consumption that has its negative aspects on the environment. We need to take into account when changing the policies going ahead. And like the U.S., Norway has its share of EV skeptics as well. We still have a lot of skeptics for EVs, both internationally and in Norway as well. They are climate skeptics, the EV skeptics. And they have a lot of myths about EVs, the fire hazard, where the energy comes from, the production emissions and so on. So we have still have those discussions all the time, even in Norway. With all these electric vehicles, have fires been a problem? No, we have the big car fire parking garage a few years ago, and there was some rumors that it was an electric car that started the fire, and then the whole media went amok. But eventually, it was not an EV that started the fire. It was an old petrol car. But of course, a lot of EVs were, in park there, but the fire didn't spread to the batteries. Has there been any issues with fires? Not here, no. None whatsoever. But of course, if an EV burns, it will burn for a long time, but it will not be explosions and stuff like that that you have in a gasoline car. Norway is approximately the size of New Mexico in square miles. And with a population of 5.5 million, it has a similar population as South Carolina, so it is hard to compare the United States and Norway. But there are some big takeaways. Charging today in the U.S., in Europe, in Norway is still way too difficult for end users. It doesn't always work. It's very often cumbersome. You have to run around with different apps. These are things that, top down, in a region, in a country, can be regulated in a way that it's benefiting the consumer without interfering with the free market environment. Standardization is important for the industry and also for the users. For DC charging, for a long, long time you had CHAdeMO, the ancient type of DC fast chargers. And you had CCS, like the European standard. And Tesla had their own. And now it's more and more merging, and more and more one standard. And I think that's extremely important. What's the biggest lesson you have for the United States when it comes to electric vehicles? I say go for it, but you need to have the charging infrastructure so you can actually travel as far as you want, not being afraid of running out of power in the middle of nowhere. So the government should help the infrastructure for charging to a certain level, and then it will be commercially viable after a while. So do that first nudge and then everything will start working by itself after a while. What's something Norway can teach the United States when it comes to EV adoption? Well, focus on the cars, to get people to buy the cars it has to be economicly beneficial. And again, we are electrifying ferries, busses, everything in Norway. Now the thing is the big trucks. Still some challenges but it looks quite promising. What mistakes have been made over the years? What are some lessons that you've learned? Well, there has been mistakes. I have to be honest about that. But I think you always have to try, but in small scale and you have to try different technology. If that is your approach, you are destined to make small mistakes. It is new technology. It's a new evolving ecosystem. So there are unavoidable lessons learned, in that respect. So that's a bit of a forward leaning statement towards other countries. Make sure that if you want to build a charging station, the construction permit is there on time. If you want to equip that charging station with sufficient power, make sure that there's a process at the DSO level. So the distribution system operator, that can handle such a request very swiftly. And then on the technology side, be aware that if there are different technology providers, not all of that hardware, software, etc. is a plug and play state. So they all need to come together to make it work. And that's a learning, not only in Norway, but everywhere we build charging infrastructure. Any misconceptions about electric vehicles you want to clear up? Well, a lot of people think of electric cars and charging the same way that they think of a gasoline or diesel car and fueling it up, and that you have to come here to our charging station to get energy. But that's really not how it works. About 90% of charging happens at home, so it's not quite the same as having to go to a gas station to fill up your car. You usually have a car that's fully charged in the morning at your house, and then you stop to charge with us when you absolutely have to. Anything you miss about having a gas powered car? No not really. I've been driving an electric for more than eight years now, and it's, there's no going back. What kind of car do you drive? Well, I have two cars. One a Kia EV6, Korean one, and I have one Jeep Adventure, which is 100% electric as well. So you don't have a gas powered car at all? Never again, I promise you.
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Channel: CNBC
Views: 1,164,020
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Keywords: Tesla, Ford, GM, Volvo, Electrification, Mercedes-Benz, Lucid, cars, car dealership, electric vehicles, vehicles, auto, EV, used cars, charging, Model Y, Model 3, Ioniq, Mach-e, used EV prices, used car prices, Hertz, Polestar, Chevrolet Bolt, rent EV, car rental, financial news, electric cars, renewable energy electric vehicles, electric car, norway, EV in norway, norway electric vehicles, oslo chargers, EV chargers, Tesla in norway, EV adoption
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Length: 36min 41sec (2201 seconds)
Published: Sat Feb 17 2024
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