How Policy Decisions Allowed Electric Vehicles To Prosper in Norway and China
Chapter 1: Introduction
Narrator: On April 17, 2023, the Biden administration promised that 50 percent of all new vehicle sales in the United States would be electric vehicles, or EVs, by 2030. Regardless of what your opinions are on electric vehicles, you may agree this is a very difficult goal to achieve. With rising misinformation, consumer skepticism, and politicalization of electric vehicles, there are challenges to overcome to make that goal come into fruition.
Narrator: The market share of electric vehicles in new car sales in the United States was 9.5% in 2023. But in other countries, electric vehicles are sweeping across their automotive markets. In 2023, 54% of all new cars sold in Finland were EVs. That number is 60% for Sweden that same year. And in Norway, that number is a whopping 93%. Even in China, the world’s largest automotive market, EVs made up 31% of all new car sales in 2023. These numbers include battery-electric, hybrid-electric, and fuel cell electric vehicles.
Narrator: So, what is the United States doing wrong, and why are countries such as Norway and China ahead of the U.S.?
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Chapter 2: A Brief History of Electric Cars
Narrator: Electric cars have existed almost as long as cars themselves have existed. In fact, some of the earliest production cars were electric and came to dominate the young automotive industry in the late 19th and early 20th century. These early EVs were touted for their reliability, quietness, and ease of operation. Additionally, some of the first automotive land speed records were set by electric vehicles. But as the development of gasoline engines advanced rapidly, the launch of cheap and reliable gas-powered vehicles such as the Ford Model T began to push these early EVs into obsolescence.
Narrator: In 1916, Congress passed the Federal Aid Road Act, allocating funds to construct a paved road network to better connect cities in the United States. Motorist groups and automotive companies in the United States were able to successfully convince the government (and a good portion of the people) to make acts such as this a reality. And it is here that the automotive takeover of American transportation really began.
Narrator: Fast forward to after the two world wars, the United States had emerged from the conflict as a global superpower, and millions of returning soldiers were starting families. Even before the end of the Second World War, the road systems in America were strained and outdated. And at this point, the rapidly rising American population warranted an ever dire need to efficiently move people to where they wanted to be. Under the Eisenhower administration, the Federal-Aid Highway Act of 1956 created more funding towards road infrastructure in the United States, especially intra- and inter-state highways, largely neglecting rail and public transit. And with the influence of corporations and motorist organizations, owning a car became part of the American Dream.
Narrator: The explosive rise of the automotive industry in the U.S. came with interest and investment in innovation. Manufacturers studied and tried many different ideas to change automotive transport. Hydrogen-powered cars, solar-powered cars, gas turbine-powered cars, nuclear-powered cars, and of course, battery-powered cars were among the many ideas that were researched throughout the years.
Narrator: When OPEC placed an oil embargo on the United States in 1973, gas prices instantly skyrocketed, and drivers across America clawed for whatever fuel they could find. Serious interest in alternative fuel vehicles rose.
Narrator: In the following year, Sebring-Vanguard revealed the CitiCar, a compact, wedge-shaped electric car. After the company was sold to Commuter Vehicles Inc., the CitiCar was updated and rebranded to the Commuta-Car. Over 4,000 units were sold, making Commuter Vehicles the most successful electric vehicle manufacturer between the end of WWII and 2013.
Narrator: Fast forward to 2008, a small startup named Tesla had just released its first model, the Roadster. Being the first production electric car to utilize lithium ion batteries to store power, it had a range advantage over every other production electric vehicle up to that point, with an optimistic range estimate at about 200 miles. Although an expensive and small demonstration of the potential of electric vehicles, it was the start of the rebirth of the electric vehicle.
Narrator: Following this success, Tesla then began sales of its Model S electric sedan in 2012, and in 2013, Tesla surpassed Commuter Vehicle’s sales record. The Tesla Model X crossover was released two years later in 2015. Using revenue and investment drawn from its luxury S and X models, Tesla then went on to release the Model 3 in 2017, and electric vehicles began to enter the mass market. Today, Tesla is the largest player in America’s EV race, but other manufacturers such as Hyundai, Ford, and GM are catching up. Even with this incredible growth in the recent decades, EV adoption in the United States, as a percentage of new car sales, is below that of a number of other countries, including China and Norway. Why is that the case?
Chapter 3: The Norwegian Head Start
Narrator: Norway is a very wealthy country. With a population of about 5.5 million and a GDP of around $580 billion USD, the GDP per capita in Norway is $106,148 USD, greater than even the United State’s GDP per capita $85,370. Norway is western Europe’s largest oil and natural gas producer, and has a rich history of fishing, logging, and mining. These are long standing industries that explain Norway’s incredible wealth and stability. Ironically, despite being a petrol state, Norway has one of the cleanest electric grids on the planet, with nearly all of its power generation coming from cheap and clean hydroelectricity.
Narrator: In 1990, Norway released an exemption on registration tax on electric vehicles. In 1996, it exempted electric vehicles from tolls. In 1999, Norwegian EVs gained access to free parking. In 2001, Norwegian EVs were exempted from another tax, this being value added tax. The standard value added tax rate in Norway is 25%, making this a huge cost benefit. In 2003, electric cars in Norway could access bus lanes. These early actions, though initially created in an insignificant electric car market, allowed electric vehicles to become incredibly popular in Norway after the rapid rise of Tesla and other electric vehicle brands.
Narrator: Additionally, Norway is investing heavily into relevant infrastructure, with an expansive network of charging stations and upgrades to grid equipment. Chargers are also installed in apartment parking lots to provide home-charging access to renters. Wireless charging pads under parking spots are an ongoing experiment. Buses and ferries in Oslo are all electric, making the Norwegian capital the first major city to completely electrify its public transit. The Norwegian government is also looking into zero-emission trucks and construction vehicles.
Chapter 4: Chinese Domination
Narrator: China is a big country. With a population of over 1.4 billion and a similar land area to the United States, it is the second largest economy on the planet. With so many people and a large economy, China also holds the title as the world’s largest automotive market. About 30 million cars were sold in China in 2023, almost twice as much as America’s 15.5 million that same year. Thirty-one percent of new cars sold in China that year were EVs, which amounts to about 9.5 million brand new EVs. Compare that to the relatively miniscule 9.5% in the United States in 2023, amounting to a meager 1.5 million electric vehicles.
Narrator: China has incentives for the industry to invest in electric vehicles and crucial minerals. Beijing enacted legislation in 2015 to encourage domestic growth in the Chinese battery industry. Soon after, it provided generous subsidies for companies developing batteries and electric vehicles. While most American brands refused to make significant investments in electric vehicles, Chinese brands were already pumping electric models onto the market. This head start has allowed a number of Chinese auto manufacturers to make a profit on their vehicles, while the late American arrivals are struggling to ramp production on their electric models, let alone make a profit.
Narrator: This East Asian juggernaut also possesses a significant industrial advantage over practically every other country on the planet in the manufacturing process in electric vehicles. Critical battery minerals, such as cobalt, lithium, nickel, manganese, and graphite are controlled in massive quantities by China. Even if minerals are mined elsewhere, China possesses an even greater refining capacity to process these aforementioned minerals into usable material, and the world depends on China for its mineral refineries. To compound this supply chain issue further, Chinese companies also produce the majority of batteries, battery components, and the electric vehicles they would eventually go into. This industrial leverage sets up China to be the most prepared from a manufacturing standpoint to switch all of its passenger vehicles to electric power in the future and gives China a crucial role in other nations’ EV goals if no other country poses a challenge to the Chinese monopoly.
Chapter 5: America’s Catch-Up Game
Narrator: The United States also has incentives for electric vehicles. Battery-electric vehicles receive a $3,750 point-of-sale rebate if it meets “certain critical mineral requirements” and $3,750 point-of-sale rebate if it meets “certain critical battery components requirements” are met. If a vehicle qualifies for one or both of the rebates, consumers get a price incentive to purchase an electric vehicle. The manufacturer is also incentivized, as it receives the same amount of money from the government per qualifying vehicle sale. However, very few vehicle models qualify one of the rebates, and even fewer for the full $7,500 rebate. These “certain critical mineral and battery components requirements” largely circle around requiring a percentage of minerals and components to be made in America or American allies. And many electric vehicles happen to utilize batteries made mostly in China or batteries made mostly with Chinese minerals. In the past few decades, the United States became more and more dependent on China for large quantities of cheap minerals and cheap manufactured goods, to the point that American mines have been depreciated in favor of imported Chinese minerals. And now, with the U.S. and China seemingly standing toe to toe against each other, there is a greater reluctance for American policymakers to be so reliant on China.
Narrator: So, what can the United States learn from Norway and China?
Narrator: Just like how the U.S. government encouraged the use of cars through massive investments into public road infrastructure, encouraging the adoption of electric vehicles requires infrastructure to achieve.
The availability of fast-charging stations can be a challenge in certain areas, and range anxiety can dissuade buyers. Elon Musk’s recent layoff of Tesla’s charging team has serious consequences to the availability and expansion of EV chargers in America. By encouraging companies to build more charging stations and maintain them, electric vehicles become a more viable purchase.
Narrator: A side effect of Norway’s incentives to EVs is that public transportation usage decreased, and traffic problems increased. The Norwegian government is planning to roll back some of the benefits that EVs receive, and encourage more public transit usage. Public transit, after all, is more efficient and environmentally-friendly the more people use it. The United States is in dire need of better public transit and rail, and encouraging more users to high occupancy vehicles such as buses and trains can reduce emissions, traffic, road damage, and accidents. Having more public transit also reduces the number of vehicles that need to be sold to reach the EV adoption goal.
Narrator: Norway did make mistakes in expanding its charging network. Though not a problem exclusive to Norway, the differing types of payment systems to access chargers make the charging experience problematic to navigate through. By standardizing methods of payment, such as mandating credit card readers at public charging stalls, can make the charging experience significantly faster and more efficient. On the topic of charging, in the United States, there is no standard charging connector. Different manufacturers may choose different plugs that their vehicles are compatible with, and as a result, certain vehicles can only access certain charge stations, and certain charge stations can only charge certain vehicles. By standardizing the plug architecture, drivers do not have to buy adapters for new cars or spend extra time searching for a compatible charging stall.
Narrator: Another challenge Norway faces is in power transmission. Though Norway generates enough electricity to meet demand, transmission lines have experienced higher usage and will require upgrades to safely transmit the predicted future electricity demand to its destination. By investing early into grid infrastructure, the United States can better prepare its grids to meet the electricity demand generated by plug-in electric vehicles and as a bonus, be more resilient in the case of a grid disruption.
Narrator: Perhaps the issue with the hardest problem to solve is with battery minerals. If the United States were to become more reliant on China for minerals, it would allow China to exert a greater influence on the American economy than it does now, and any increase in geopolitical tension between the two nations could threaten to starve the American economy greater. The United States needs to invest in more mining domestically and in friendly countries, which it had neglected decades ago in favor of China. America also needs to build out more refineries for these battery minerals and encourage the development of battery plants on U.S. soil. By exerting greater verticality over the battery-making and EV-making process, the United States can be more resilient against the wills of outside powers such as China.
Narrator: As similar and as different to us that countries with successful EV adoption rates are, there is never nothing to be learned. The United States may be behind, but it has the benefit of some hindsight. America can learn from the successes and mistakes that other countries have made, and strive to do it as best as it can. The race to electrify transportation is not merely a social media trend or a technological gimmick, but an investment into humanity’s future.
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Very thorough and detailed. Good subheading titles.
You will give me this script along with your creator’s statement in the Unit 3 part of the Final Portfolio.
Q: your title suggests that the focus of your video essay is the advances in Norway and China and not anything about America’s place in this race. Should you reevaluate that title?
Looks good! I am really looking forward to your presentation on your genre project!