Norway is a shining example of the transition to sustainable transportation. The country’s significant support for electric vehicles (EVs) has even earned admiration from Elon Musk, who praised Norwegians for their enthusiasm for Tesla cars.

Norway’s policies for EV adoption

Norway's world-leading EV adoption rate did not happen by chance. Since the 1990s, Norwegian EV owners have benefited from policies such as tax reductions, access to bus lanes, and toll fee exemptions.

According to Forbes, nearly 90% of new cars sold in Norway today are electric, with projections suggesting EVs will dominate the country’s roads by 2032.

In 2023, over 80% of new cars sold in Norway were electric, far surpassing other countries. This success stems from a combination of incentives: VAT exemptions, free parking in certain areas, reduced bridge and ferry fees, and more.

These measures have made EV ownership financially competitive with gasoline and diesel cars, despite the higher production costs of EVs.

The government has also built an extensive charging network across the country, including remote areas, to eliminate "range anxiety." This is crucial in a nation with a cold climate and rugged terrain.

Automakers have also contributed significantly by reshaping perceptions of EVs as trendy, high-performance vehicles with smart features and modern designs.

Norway’s achievements in promoting EV adoption highlight the importance of supportive government policies. These efforts offer a valuable lesson for countries seeking to reduce pollution and “green” their transportation systems.

While it is uncertain whether Norway will completely phase out internal combustion engine (ICE) car sales by 2025, the country is likely to come close to this goal. Its success underscores the importance of combining government policy, infrastructure investment, and consumer awareness to achieve the widespread adoption of zero-emission vehicles.

Policy recommendations for Vietnam’s EV transition

Vietnam’s EV market has shown promising signs, with domestic and international brands expanding product offerings and nationwide charging networks. Notably, VinFast, Vietnam’s leading EV manufacturer, has made remarkable sales breakthroughs, reflecting a growing interest in EVs among Vietnamese consumers.

Dr. Nguyen Son, a lecturer in supply chain and logistics at RMIT University Vietnam, noted that the rise of “Made in Vietnam” EVs reflects a significant shift in public perception. Policies like free registration and reduced import taxes for EVs, coupled with investments in charging infrastructure, have made these vehicles more appealing.

However, transitioning to EVs is a complex process involving a multi-sector ecosystem. This includes:

Promoting EV production and supply.
Offering incentives to stimulate demand.
Expanding EV charging infrastructure.
Adapting the power grid for EV charging.
Building essential skill sets for workers in the EV industry.

To achieve the goals outlined in Decision 876, which aims to shift road transport to electric vehicles, the World Bank (WB) recommends a comprehensive roadmap and national action plan for Vietnam’s EV transition.

Key WB recommendations for Vietnam

1.     Establish an intergovernmental body: This agency would coordinate efforts and optimize the speed and cost of transitioning to EVs.

2.     Leverage Vietnam’s strength in two-wheel EVs: Vietnam is the world’s second-largest market for two-wheel EVs, after China.

Policies should focus on: Enhancing financial accessibility for consumers to bridge the cost gap between EVs and traditional vehicles. Setting standards to address consumer safety concerns. Accelerating the phase-out of gasoline-powered motorbikes to free up the market for new two-wheel EVs.

3.     Expand public charging networks: For electric cars, a systematic approach to building public charging stations is essential, starting with urban areas and gradually expanding.

4.     Manage grid impact and encourage off-peak charging: The government should shift EV charging to public stations during the day to reduce peak load on the power grid. Initiatives should include: Reforming electricity pricing to incentivize off-peak charging. Deploying smart chargers and installing solar panels at public charging stations to mitigate grid pressure.

The Norwegian model demonstrates the power of government support, infrastructure investment, and cultural shifts in driving EV adoption. For Vietnam, achieving a green transport system requires a tailored approach that addresses local conditions while drawing inspiration from Norway’s success.

Tam An