Norway electric vehicle uptake at record high in 2020

Norway's uptake of electric vehicles (EVs) hit a record high in 2020, and multiple new battery projects took off, reflecting the country's push towards the electrification of transportation over the next five years.

Despite pandemic-led travel restrictions, the country's battery-powered vehicles accounted for two-thirds of sales in December, up from 56.1pc in November, and 54.3pc over the whole of 2020, according to Norwegian Road Federation OFV.

It is the first time that EVs have accounted for the majority of vehicle sales for an entire year in Norway, having made up just over 42pc in 2019.

By contrast, only 16.5pc of new car registrations in the UK were battery powered, according to the Society of Motor Manufacturers and Traders, while EVs made up under 10pc in the EU during the third quarter of 2020, according to the European Automotive Manufacturers Association.

Policy, infrastructure support EV growth

The rapid uptake of EVs in Norway is because of ambitious policies and expanded infrastructure. Norway's electric policy is one of Europe's most ambitious. It has banned the sale of internal combustion engines by 2025, and imposed a 50pc rule in 2017 — EVs cannot be charged more than 50pc of the amount that fossil fuel-based cars are charged for parking, tolls and ferries.

In addition, internal combustion engines are taxed at much higher rates than EVs to encourage switching.

In terms of infrastructure, Norway has also pushed to become one of Europe's leaders on charging points. While the Netherlands has the most public charging points at roughly 50,000, Norway is in fifth place with 10,000, giving it one of the highest charge points per capita in Europe. Many of these points are fast or ultra-fast chargers, which much of Europe lacks, further enabling EV uptake.

Battery cell development

Norway's private sector has also helped development in the battery sphere for EVs.

Battery producer Freyr last month outlined plans to develop an environmentally friendly lithium-ion based battery cell facility in northern Norway. In October, it signed a battery metals supply deal with Norwegian silicon supplier Elkem for the supply of graphite and high-silicon content materials for use in its batteries.

At the same time, new Norwegian start-up Morrow Batteries has picked possible locations for its 32GWh Gigafactory, with the aim of completing the first section of the facility in 2024.

Norway's uptake of EVs is expected to push ahead this year, and for now the country is on track to meet is 2025 target. As a result, demand for metals used in batteries is expected to rise. Demand for materials such as silicon and graphite produced in Norway is anticipated to rise, while sources of lithium are being developed in Germany and the UK — vital if carbon emissions produced during the manufacturing of Li-ion batteries are to fall, given that most lithium is currently imported from regions such as Australia and South America.

European silicon prices have been rising since October, largely because of increased freight rates from China. Prices for 5-5-3 grade silicon reached €1,820-1,900/t ddp Europe in January 2021, after jumping from a 2020 low of €1,550-1,600/t on 24 September, according to Argus data. Prices for min 56.5pc lithium hydroxide are rebounding after falling for much of 2020, and have reached $8.50-10.00/kg fob China. Prices hit a bottom in 2020 of $8.00-9.50/kg on 7 July, and remained at that level until the start of September.

By Yusuf Khan