Highly misleading figures regarding Norwegian EV benefits in Reuters article
22 mars 2013
In a widely quoted Reuters article, Bjart Holtsmark of SSB claims that Norwegian EV owners receive tax breaks and other benefits amounting to as much as $8.200 per year. Compared to a Toyota Prius, Mr. Holtsmark estimates a cost per tonne CO2 saved of $13.200. These figures are based on unrealistic assumptions, and have little connection with reality.
Mr. Holtsmark uses a Toyota Prius as a benchmark for his numbers. According to our own calculations, the yearly tax breaks and other benefits of driving an EV compared to a Prius amounts to $3.336, or 40% of Mr. Holtsmark's estimate. As for the cost per tonne CO2 reduced, our estimate is at $2.500, or 19% of Mr. Holtsmark's.
A comparison between our estimates can be found below. Briefly, the large differences in our estimates can be attributed to the following factors:
The world does not end in 2020
Mr. Holtsmark's assumptions are based on a total vehicle lifespan of 7,8 years. This is deduced from his estimate that a total of $11.000 in purchase tax breaks equals $1.400 per year. Coincidentally, this means that the vehicle will be scrapped in 2020.
We base our estimate of a total vehicle lifespan of 15 years. This is also a moderate estimate, as the average scrapping age of Norwegian cars is closer to 18 years.
Very few Norwegian EVs are parked for 3.000 hours per year in paid public parking spots
Mr Holtsmark bases his estimate on the assumption that an EV owner saves as much as $5.000 per year just in parking fees. Parking on public spaces in Norway is free for EV owners, but EVs still have to pay in privately operated parking spots.
The most expensive public parking spaces in Oslo have a 30 minute parking limitation. In the unlikely event that an EV owner did nothing else than move his car around between these 30 minute spaces, he would still have to be parked for around 950 hours per year in order to save $5.000.
If the EV owner instead parked at public parking spaces in Oslo with a limitation of 8 hours or more, as is the case with most EV users who commute to work in their car, the EV would need to be parked between 1.875 hours and 3.000 hours per year to save $5.000. This is highly unlikely, and is at best true for a marginal proportion of Norwegian EVs.
A typical EV owner does not drive only 6.000 km per year
Mr Holtsmark assumes yearly CO2 emissions per year for a Toyota Prius to be 0,6 tonnes. This translates to roughly 6.500 km driven per year. Norwegian EV owners typically drive closer to 15.000 km per year, as most EVs are typically used as everyday commuter cars. Assuming the Prius was driven in the same way, the yearly CO2 emissions would be 1,33 tonnes. This, compared with a more realistic estimate on the yearly tax breaks and benefits for an EV owner, dramatically reduces Mr. Holtsmarks estimate of the cost per tonne CO2 reduced.
Our estimates, compared with Mr. Holtsmark's estimates from the Reuters article, can be found below. In sum, we believe that Norway's EV benefits represent a far better investment in our transportation future than the Reuters article would have us believe.
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Ole Henrik Hannisdahl
+47 97 78 26 77