Electric vehicles: The Norwegian way

NARRATOR Welcome to the DNV Talks Energy podcast series. Electrification, rise of renewables and new technologies supported by more data and IT systems are transforming the power system. Join us each week as we discuss these changes with guests from around the industry.

MATHIAS STECK Welcome to a new episode of DNV Talks Energy here from the Global Smart Energy Summit in Dubai. Our guest today is Christina Bu from the Norwegian Electric Vehicle Association. Welcome Christina.

CHRISTINA BU Thank you. Nice to be here.

MATHIAS STECK Thanks for making time. Christina, we want to talk around electric vehicles obviously today; a little bit looking into the Norwegian success story but also looking into challenges and opportunities around electric vehicles. But before we go there, it would be great if you could introduce yourself as a person and then also tell us a bit about the mission of the Norwegian Electric Vehicle Association.

CHRISTINA BU Yes, of course. So, my name is Christina, and I’m heading this NGO, which is an organization organizing the owners of electric cars in Norway. Electric cars that, fully electric vehicles, full electric cars that only run on electricity. We have more than 50,000 members, paying members, and I think that makes us the world’s largest EV owner association.

The work that we do is twofold, really. One thing is that we work to promote electric mobility and to talk to our politicians, industry. Do the lobby work that is necessary to make this happen as fast as possible. That means both having incentives, for example, in Norway but also getting charging infrastructure up and going. But just as important is helping our members.

Norway is the first country in the world that has moved from the early movers stage to the early mass market, which means that people buying these cars now are different than a few years ago. Then it was the tech savvy people, the engineers, that had read everything about the car before they bought it. They knew all about the technology. Now it’s just normal people buying these cars. And they have lots of questions and enquires. So, we have several people answering e-mails and phone calls every day. We receive a lot of questions, and they’re pretty much about three things.

Charging, charging, and charging. And yes, so, lots of questions. And of course we also have membership deals that we offer our members, which is also a big part of our, the work that we do. Yes, so we’re an NGO working to promote electric transport and also helping the consumers, our members, with the needs and the questions that they have.

MATHIAS STECK So, how do you become a secretary general of an electric vehicle association?

CHRISTINA BU Well, my background, actually, I’ve never even owned a car. So, it’s quite a good question. I’ve had my driver's license since I was 18, but it’s environmental reasons why I got into this. I believe that if we are to reduce emissions, both local and global emissions, we have to electrify transport. So, I got into this because of that.

My former job, I worked as a political adviser, as a lobbyist really, for the AAA in Norway., also work, but my responsibility was environmental issues and electric mobility and things like that. So, that was my background. So, I’ve been leading this organization for four years almost. And we’ve grown quickly, as the car sales has grown. Around 20 people now working at the association.

MATHIAS STECK And you must have done a good job because, at least by market share, Norway is the leading country in the world on the uptake of electric vehicles. So, how did that happen?

CHRISTINA BU Well, I’m not going to take all the honour for that. It’s been… I think the real honour is to our politicians. They started with… Actually, it started early 1900s really. Norway has a long history of taxing cars. Buying a new car in Norway is extremely expensive. You pay a purchase tax and VAT on top of that. So, buying a new car is expensive.

In the early 1990s, so Norwegian politicians decided that we’ll remove those taxes for BEVs, Battery Electric Vehicles, which means full electric. And they removed both the purchase tax and the VAT. And that’s still the case. So, for many years, there were still with these incentives. And they also added other incentives, local incentives as well. For example, free public parking, access to bus lanes. You didn’t have to pay at toll roads. Things like that.

But something, it didn’t really start happening until around 2010-11. And why was that? Of course, because before that there were not that many cars to buy. 2011, the Nissan Leaf was launched, and then more and more different car models were introduced. And then the sales just started slowly growing. And so, we’ve gone from—I’m talking about full electric vehicles now—gone from a market share of 3% to 21%, which was last year, in five years. Which is quite quick.

And it’s a quite quick period for people to just get aboard, which I think is probably the most interesting part of the story. If you include the plug-in hybrids, the market share now is more than 40%. So, more than 40% of new car sales are now either fully or partly electric cars.

MATHIAS STECK So, while this is a great success, this uptake of EVs and environmental factors which I like to discuss later, of course an important part of the story, there’s also a challenging part around EVs, and this is with the utilities. So, we hear this quite a bit from other countries that the utilities are worried about what’s coming. But it seems also here we can learn from Norway how to handle this problem. So, how did Norwegian utilities react?

CHRISTINA BU Well, the utilities in Norway has been mostly supportive really, and I think part of the reason is that the Norwegian grid is quite robust. On the central grid, well, we have more than enough electricity available really. If all passenger cars in Norway are electrified, it will only, fully electrified, it would only demand 5%–6% of our hydropower.

Norway has almost hundred percent renewable electricity production, but the distribution grid is, of course, a bigger challenge, can be a challenge. But they tend to see that EVs are, which I totally agree, is important to make this happen and make this work. And they see that there are also business opportunities connected to the increasing number of electric cars, especially when it comes to demand management.

Steering, well, most cars, well, actually all cars are parked longer than the time that you spend charging. So, if you can tell your consumers, your customers to charge at the right time, that can help you also shave the peaks, which is especially in Norway in the afternoons. You don’t necessarily have to charge exactly then. And they are also investing in businesses related to charging infrastructure. I think they have been a little bit slow at the beginning.

This has not been the driving force in Norway. It hasn’t been the businesses that has been pushing this. It’s been, it’s been from the top, from the politicians and from the bottom-up, from the consumers really. But now there’s a lot more happening and a lot of exciting things too—cool projects, big charging infrastructure projects—and also more and more getting the consumers along to new business models.

MATHIAS STECK On this charging aspect, I know everybody’s asking about this. I have a question. It’s probably not very new. What about standardization? If you’re an early adopter, you will have a zoo of technology. Can I charge my electric vehicle in Norway at any charging point?

CHRISTINA BU Almost. Of course, this is from a consumer point of view. I represent the consumers. It’s ridiculous, of course, that we couldn’t just have one charging standard. You have different fast-charging standards, and you also have different plugs on a normal charging as well.

But pretty much, you could go to any fast-charging station. For example, you have fast-charging when you go on long trips and then you have the normal charging when you charge at home or where the car is parked. So, these are two issues you need solve. You need to have charging where you live, and, which can be problematic in city areas especially.

And you need fast-charging stations where you want to go a longer trip. And yes, you could definitely take any car really, and go fast and fast charge. But you have different plugs. So, you have to know which plug to choose right? Whether it’s the CHAdeMO plug or the CCS or maybe your car should charge on an AC charger.

And this is the reason why we get a lot of e-mails and phone calls to the Norwegian EV Association. People get confused, and they tend to call us when they stop at the fast-charging station the first time and wonder what to do.

MATHIAS STECK You also mentioned an interesting part, which is probably also part of being an early adopter moving into an early mass market, that the people who buy these cars are now different people. We see more and more people maybe buying these cars because they like them and they’re maybe even soon cheaper than the usual combustion engine.

So, that obviously implies that there’s a huge challenge on the car industry. I think briefly we also described or talked about the challenge that some models were just not available. That is why it took some time. So, how do you look at this aspect, and how do you work with the car industry on these matters?

CHRISTINA BU We are a lot in dialogue with the car industry. They’re quite interested in what’s going on in Norway, especially the consumer point of view. So, they’re coming to Norway lots, also the ones who don’t have electric cars yet. So, we talk to a lot of CEOs and top management in the different OEMs, car manufacturers. I think what is interesting is that if you’re in Germany, for example, people are still discussing the myths.

They’re still challenging this a lot, whereas Norway we passed… to a large part, we passed that stage and it’s becoming normal for people. In some of the biggest cities, like Oslo and Bergen, now more than 10% of the cars on the road is a full electric vehicle. So, people are… seeing is believing, and everybody has a neighbour or friend or someone. If they don’t own an electric car themselves, then they have someone else there.

So, for the car industry to come to Norway, it opens their eyes a little bit. That said, these are big companies, and these are big ships to steer in different directions. So, although some of their top managers understand where it’s going, it’s a big challenge for them to get the ship in a different direction.

And my worry is that… Actually, I’m quite sure that in a few more years we will see a Kodak moment, and that there are big manufacturers that won’t be able to survive because this is a disruptive technology. The demand side is there, as soon as the price is more or less level; and this will happen in country by country. And it’s also connected to autonomous vehicles and car sharing. All these are reinforcing each other, these trends, and producing an electric car is actually quite simple. And even worse for the car manufacturers, there’s not much to fix afterwards.

They have a lot of revenue on fixing your cars after. Removing all of that is a possible real big danger, actually, for the type of manufacturers that we have. And I think definitely some of them are really getting that, and they’re getting there faster than the others. But they will be challenged now with… One thing is car manufacturers from China, for example, or even India. But consumer tech companies, they also know, they can do this and so, it’s a very interesting story going on in the car industry right now, and it’s going to be totally different in another five or ten years.

MATHIAS STECK I think I’m certainly not surprised that in countries like Germany, there’s certainly also a moment of denial. Because the car industry was the holy grail and that was pretty much the combustion engine and very little any new innovations on electric vehicles. And it’s related to certainly also how your company is set up. There were a lot of investments. We talked a bit about this before we started this podcast. There’s your whole labour which you cannot just retrain and turn by 180º.

But would you say that somebody who doesn’t change today is most certainly, I mean, he will not be around any more in the future. So, I think that moment the people have to get, and I sometimes foresee there’s a bit the parallel with renewables. So, we were fighting this battle for decades, trying to make the world greener. Now suddenly that has become very easy because renewables are starting to be cheaper than conventional generation.

This seems to be exactly the same thing that’s going to happen in electric vehicles. At some point, family will decide they buy the electric vehicle because it’s more affordable than the combustion engine. So, I guess the car industry at some point will get to this.

I want to highlight one more topic actually, and that is the environmental aspect. So, of course very often EVs are seen connected to environmental benefits. And certainly, in a city environment, that is immediately true when we talk about the emissions of the car floating around the people walking on the roads. But when we look into countries like Singapore, for example, most of the electricity is produced by fossil fuels so that effect kind of goes away. You don’t have this question in Norway a lot because you have hundred percent renewables there. But I would still be interested on your on view on that.

CHRISTINA BU Yes, well, first of all, an EV, an electric car, is better, even though it runs on coal. It’s not good, but it’s better. First of all, because as you mentioned, it doesn’t have pollution where it’s driven, which is really important to remember.

In India, for example, more than 2 million people die every year because of local pollution. I was in Delhi in December. I actually felt sick because the pollution was so bad. So, this alone is a good reason. But you were talking about CO2 emissions and climate. I think that if we are to solve this huge problem for humanity, we have to do it as fast as we can. And I don’t believe that we can wait until we have a hundred percent renewable electricity production in the world before we start developing the products and the vehicles that can run on this renewable power.

We have to do this at the same time and develop this simultaneously. So, and then we see big breakthroughs also when it comes to renewables with solar and wind, especially solar. And this is moving faster and faster. So, I think that, yes, this have to go hand in hand and both have to happen as fast as we possibly can make it happen. But also, people tend to forget that the electric motor so much more effective.

Most of the energy is put use to move the vehicle forward, whereas with a conventional motor, it’s most is lost in heat and lost energy. So, you’re lucky if you get 30% of the energy to move the car forward. So, just with that calculation, even for climate reasons, it’s better with electric car, even though you use fossil fuels. But we have to move away from fossil fuels. We have to clean up the grid, and we have to have cars, electric cars that can use these renewables.

MATHIAS STECK So, now I need you to be a bit visionary. I pull it all together. So, we do have electric vehicles. I think here in the conference you were in a panel where also autonomous driving was discussed, and you briefly mentioned earlier in an answer shared models, like shared economy, shared cars. So, this stereotype of someone who loves his car and because of that gets into driving might totally go away by us sitting in autonomously driven electric vehicles which don’t belong to us. So, what does that do to the industry?

CHRISTINA BU Well, that depends on how the industry gets on board these trends. It’s definitely a lot happening here. And of course, I don’t think we will not have cars that are owned. I heard a joke, I don’t even think it’s a joke, it’s actually true. The last car we will get rid of is actually the sports cars.

People will have cars as something that it’s fun to drive and do. But as soon as the costs come down, why would most people especially in the cities, choose to pay a lot more when they can just buy a service and get all their needs covered? There’s a company called MaaS Global that launched a new solution in Helsinki a few months back, where they already have this. They offer, for a fixed price a month, they offer you all the mobility that you need.

You could use public transport, taxi, and get a car when you want it, as long as you don’t use them at the same time. So, I think we will slowly get there, especially when price comes down. And autonomous cars, electric cars, and car sharing are integrated. These are disruptive trends and technologies that reinforce each other.

You can’t get one without the other, I think, because electric mobility will be cheaper in the end, especially when you think about maintaining the costs and everything. Car sharing will, I think, definitely be important especially in the city areas. And these are, the cities are where the population growth is the biggest.

And autonomous vehicles, the technology is already here. I think there’s still some time off before we all drive autonomous vehicles, and I think we also have to handle this in a way that we don’t get more cars in the cities. If you have your own autonomous cars come and get you and then go back to your garage or something, then we have failed.

So, we need to make this work in a good way. But it’s definitely interesting things going on in the mobility sector, and it’s moving fast. And we were discussing this before that none of us actually own a car. So, I think increasingly people are thinking, do I really have to own one?

MATHIAS STECK True. And I might add interesting aspect I learnt from a colleague from an insurance sector, who said, we will all move immediately to autonomous driving when it is proven that that causes less damages than a driver behind the steering wheel, and the reason for that will be that nobody can afford the insurance for driving himself any more.

CHRISTINA BU Exactly.

MATHIAS STECK This is also interesting pressure. So, my last question really would be more like maybe a global view. We know already Norway leading on market share. What are the next big markets you would think around the globe where EVs will really make an impact?

CHRISTINA BU Well, we already see… Actually, it’s quite interesting to see how in country after country there are new incentives and politics put in place. And also, country by country, they are also launching quite ambitious goals.

Norway launched the goal last year that from 2025, in seven years, we’re only going to sell zero-emission vehicles, meaning battery electric or hydrogen. Shortly after, India said that they will do the same from 2030, and India’s a lot bigger than Norway, which is really cool. And I went to India in December. And I was amazed about how they really believe in this, and they want to do it.

And then, of course, China is interesting. And I think people in Europe and other countries maybe don’t even really realize what’s going on there. You have examples of Shenzhen, for example, one of the bigger cities that now already have electrified, all of their buses are full electric. So, it’s moving fast.

And there’s a lot of countries around the world now that have bigger increases in the EV sales than what Norway had a few years ago. So, the increase is higher. New Zealand, for example, hundred and thirty percent growth from one year, year on year from 2016 to 2017. And you see this in country by country. People just don’t really realize it because it’s still quite small volumes, but it’s starting and…

So, Norway is five or ten years ahead, but the other countries are quickly following. So, I don’t want to name just one country. But for me, it’s just the amount of attention that my organization is getting from around the globe is just increasing and increasing. And it’s telling me that the world is waking up, and people are understanding that this actually working and will be the future.

MATHIAS STECK So, it should be a no-brainer for the car industry to really get into this big time.

CHRISTINA BU They should, or else they will be gone. Yes.

MATHIAS STECK On that happy note, Christina, we have to stop unfortunately because this episode comes to an end. But thank you very much for your very valuable insights and enjoy your time here in Dubai.

CHRISTINA BU Thank you very much.

MATHIAS STECK It was great having you.

CHRISTINA BU Thank you.

MATHIAS STECK Thank you. And for the listeners, thank you very much for listening. That was Christina Bu, Secretary General from the Norwegian Electric Vehicle Association.

NARRATOR Thank you for listening to this DNV Talks Energy podcast. To hear more podcasts in the series, please visit dnv.com/talksenergy.