Electric cars made up almost 80% of the cars sold last year in Norway, following a series of incentives offered by the government. Four of out every fifth car registered last year was an electric car, according to data released by the Norwegian Road Federation (OFV).

Tesla sold more cars in Norway than any other brand for a second consecutive year, clinching a 12.2% share of the overall market ahead of Volkswagen with 11.6%, registration data showed. The Tesla Model Y was the single most popular model of the year, ahead of Volkswagen’s electric ID.4 in second place, and Skoda Enyaq in third.

While China is by far the biggest car market overall, Norway with its 5.5 million inhabitants, has achieved the world’s highest proportion of electric vehicles with the help of generous subsidies, making it a proving ground for automakers launching models.

Norway has also led the way in switching over to electric cars by offering people several incentives. Most importantly, people were exempt from paying taxes on their electric cars last year, but that changed this year.

From January 1, those who buy more expensive electric cars will have to pay VAT or value-added tax on their cars. While tax exemptions helped cut emissions, they cost the Norwegian government around $4 billion (€3.7 billion) in revenue losses in 2022, the Finance Ministry said. Those with electric cars also paid a lower toll and public parking fees.

Norway, a country of 5.5 million people, aims at having all cars sold by 2025 produce zero emissions, namely electric or hydrogen-powered cars.