Norway powers ahead electrically with over half of new car sales now electric or hybrid

A Norwegian citizen disconnects his electric car from a free recharging station in Oslo. Pure electric cars and hybrids, which have both battery power and a diesel or petrol motor, accounted for 52 percent of all new car sales in Norway last year. (Reuters)
Updated 03 January 2018
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Norway powers ahead electrically with over half of new car sales now electric or hybrid

OSLO: Sales of electric and hybrid cars rose above half of new registrations in Norway in 2017, a record aided by generous subsidies that extended the country’s lead in shifting from fossil-fuel engines, data showed on Wednesday.
Pure electric cars and hybrids, which have both battery power and a diesel or petrol motor, accounted for 52 percent of all new car sales last year in Norway against 40 percent in 2016, the independent Norwegian Road Federation (OFV) said.
“No one else is close” in terms of a national share of electric cars, OFV chief Oeyvind Solberg Thorsen said. “For the first time we have a fossil-fuel market share below 50 percent.”
Norway exempts new electric cars from almost all taxes and grants perks that can be worth thousands of dollars a year in terms of free or subsidised parking, re-charging and use of toll roads, ferries and tunnels.
It also generates almost all its electricity from hydropower, so the shift helps to reduce air pollution and climate change.
Last year, the International Energy Agency (IEA) said Norway was far ahead of other nations such as the Netherlands, Sweden, China, France and Britain in electric car sales.
By the IEA yardstick, which excludes hybrid cars with only a small electric motor that cannot be plugged in, electric car sales in Norway rose to 39 percent in 2017 from 29 in 2016, when the Netherlands was in second on 6.4 percent.
Norwegian car sales in 2017 were topped by the Volkswagen Golf, BMWi3, Toyota Rav4 and Tesla Model X. The Tesla is pure electric and others have electric or hybrid versions.
In many countries, high prices of battery-driven cars, limited ranges between recharging and long charging times discourage buyers. Car makers say the disadvantages are dwindling over time with new models.
“We view Norway as a role model for how electric mobility can be promoted through smart incentives,” a spokesman at BMW’s Munich HQ said. “The situation would probably be different if these incentives were dropped.”
Other “good examples” of policies to spur electric-car demand include Britain, California and the Netherlands, he said.
Last year, Norway’s parliament set a non-binding goal that by 2025 all cars sold should be zero emissions. Among other nations, France and Britain plan to ban sales of petrol and diesel cars by 2040.
Christina Bu, head of the Norwegian Electric Vehicle Association which represents owners, said the 2025 goal meant that Norway should stick with its incentives for electric cars.
“It’s an ambitious goal only seven years away,” she told Reuters. Overall, sales of zero emissions cars in Norway rose in 2017 to 21 percent from 16 in 2016.
Electric cars have widespread support among Norway’s 5.3 million people. A plan last year by the right-wing government to trim electric car incentives, dubbed a “Tesla Tax,” was dropped in negotiations on the 2018 budget.
Sales of diesel cars fell most in 2017, to 23 percent from 31 in 2016. Some regions in Norway have started to charge higher road tolls for diesel cars than for petrol-driven vehicles.
Norway’s electric car policies are hard to imitate. Norway can be generous because high revenues from oil and gas production have helped it amass the world’s biggest sovereign wealth fund, worth $1 trillion.
Illustrating the supportive benefits, a Volkswagen e-Golf electric car sells for 262,000 crowns ($32,300) in Norway, just fractionally above the import price of 260,000, according to the Norwegian Electric Vehicle Association.
But a comparable gasoline-powered Golf, which costs just 180,000 crowns to import, ends up selling for 298,000 crowns after charges including value added tax, carbon tax, and another tax based on the weight of the vehicle.
Even in Norway, the benefits strain finances. Norway’s 1.3 trillion Norwegian crown budget projects a loss of tax revenues of 3 billion crowns a year because of electric cars.


China’s real estate investment slows as caution sinks in

Updated 19 October 2018
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China’s real estate investment slows as caution sinks in

  • Property increases downside risks to economy
  • September new construction starts up by a fifth

BEIJING: Growth in China’s real estate investment eased in September and home sales fell for the first time since April, as developers dialled back expansion plans amid economic uncertainties and as additional curbs on speculative investment kicked in.
A cooling market could increase the downside risks to the world’s second-largest economy, which faces broader headwinds including an intensifying trade war with the United States.
However, while analysts acknowledge increasing caution in the property market, they say investment levels are still relatively high, suggesting a hard landing remains unlikely.
Growth in real estate investment, which mainly focuses on residential but also includes commercial and office space, rose 8.9 percent in September from a year earlier, compared with a 9.2 percent rise in August, Reuters calculated from National Bureau of Statistics (NBS) data out on Friday.
“I think overall, China’s real estate market is still resilient, and the decline in sales is within our expectations,” said Virginia Huang, Managing Director of A&T Services, CBRE Greater China.
“There is no sign that the government has relaxed their control, but it still has many methods and tools to support the market if the economy deteriorates rapidly,” Huang said.
Real estate has been one of the few bright spots in China’s investment landscape, partly due to robust sales in smaller cities where a government clampdown on speculation has been not as aggressive as it is in larger cities.
The market has struggled as authorities continued to keep a tight grip over the sector, ramping up control in hundreds of cities. Transactions fell sharply over the period dubbed “Golden September and Silver October,” traditionally a high season for new home sales.
Property sales by floor area fell 3.6 percent in September from a year earlier, compared with a 2.4 percent gain in August, according to Reuters calculations, the first decline since April. In year-to-date terms, property sales rose 2.9 percent in the first three quarters.
China’s central bank governor Yi Gang said last week he still sees plenty of room for adjustment in interest rates and the reserve requirement ratio (RRR), as downside risks from trade tensions with the United States remain significant.
The government has implemented four RRR cuts this year, releasing hundreds of billions in new liquidity to the market.
China has for several years pushed a deleveraging campaign to reduce financial risks, clamping down on shadow banking and closing many “grey” financing channels for real estate firms.
For many highly leveraged developers, there are already signs of increasing caution as exemplified by a surge in failed land auctions due to tight liquidity and thinning margins.
New construction starts measured by floor area, an indicator of developers’ expansion appetite, rose 20.3 percent in September from a year earlier, compared with a 26.6 percent gain in August, Reuters calculations showed.
That’s against the backdrop of seemingly looser funding conditions for China’s real estate developers, who raised 12.2 trillion yuan ($1.76 trillion) in the first nine months, up 7.8 percent from the same period a year earlier, the NBS said.
The growth rate compared with a 6.9 percent increase in January-August period.
“Many developers will face lots of maturing debt by the end of this year, and there are perceived risks in the economy, so they will be more cautious,” Huang said.
China’s housing ministry is considering putting an end to the pre-sale system that developers use to secure capital quickly, in an effort to crack down on financial risks in the property sector.
China’s home prices held up well in August, defying property curbs. But analysts expect additional regulatory tightening and slowing economic growth will soon take the wind out of the property market’s sails.
The National Bureau of Statistics will release September official home price data on Saturday.