For more than 75 years Oslo-based car dealership Harald A Møller has been importing Volkswagens, but early in 2024 it bid farewell to fossil fuel cars.

Now all the passenger vehicles for sale in its showroom are electric (EV).

“We think it’s wrong to advise a customer coming in here today to buy an ICE [internal combustion engine] car, because the future is electric,” says chief executive Ulf Tore Hekneby, as he walks around the cars on display. “Long-range, high-charging speed. It’s hard to go back.”

On the streets of Norway’s capital, Oslo, battery-powered cars aren’t a novelty, they’re the norm. Take a look around and you’ll soon notice that almost every other car has an “E” for “electric” on its license plate.

The Nordic nation of 5.5 million people has adopted EVs faster than any other country, and is on the cusp of becoming the first to phase out the sale of new fossil fuel cars.

Last year, the number of electric cars on Norway’s roads outnumbered those powered by petrol for the first time. When diesel vehicles are included, electric cars account for almost a third of all on Norwegian roads.

And 88.9% of new cars sold in the country last year were EVs, up from 82.4% in 2023, data from the Norwegian Road Federation (OFV) showed.

In some months sales of fully electric cars were as high as 98%, as new petrol or diesel car purchases almost fizzled out.

By contrast, in the UK electric cars made up only 20% of new car registrations in 2024. Although this was a record high, and up from 16.5% in 2023.

In the US, the figure was just 8% last year, up from 7.6%.

Norway is undoubtedly an EV pioneer, but this electric revolution has been three decades in the making.

“It started already in the early 1990s,” says Christina Bu, the secretary general of the Norwegian EV Association, as she took me for a spin around Oslo in an electric minivan.

“Little by little taxing petrol and diesel engine cars more, so they have become a lot more expensive to purchase, whereas electric cars have been exempted from taxes.”

The support for electric vehicles was first introduced to help two Norwegian manufacturers of early EVs, the Buddy (previously Kewet) and TH!NK City. While they went out of business, the incentives for greener vehicles remained.

“It’s our goal to see that it’s always a good and viable choice, to choose zero emission,” says Norway’s Deputy Transport Minister, Cecilie Knibe Kroglund.

Even though it’s a major oil and gas producer, Norway aims for all new cars sold to be “zero emission”, starting at some point in 2025. A non-binding goal was set back in 2017, and that milestone now lies within reach.

“We are closing up on the target, and I think that we will reach that goal,” adds Kroglund. “I think we have already made the transition for passengers cars.”

Key to Norway’s success has been long-term and predictable policies, she explains.

Rather than banning combustion engine vehicles, the government has steered consumer choices. In addition to penalising fuel fossil vehicles with higher taxes and registration fees, VAT and import duties were scrapped for low-emission cars.

A string of perks, like free parking, discounted road tolls and access to bus lanes, then followed.

By comparison, the European Union plans to ban sales of new fossil-fuel cars by 2035, and the UK’s current government wants to prohibit their sale in 2030.

Petrol and diesel car sales are still permitted in Norway. But few are choosing to buy them.

For many locals, like Ståle Fyen, who bought his first EV 15 months ago, going electric made economic sense.

“With all the incentives we have in Norway, with no taxes on EVs, that was quite important to us money wise,” he says while plugging in his car at a charging station in the capital.

“In the cold, the range is maybe 20% shorter, but still, with the expansive charging network we have here in Norway, that isn’t a big issue really,” Mr Fyen adds. “You just have to change your mindset and charge when you can, not when you need to.”

Another driver, Merete Eggesbø, says that back in 2014 she was one of the first people in Norway to own a Tesla. “I really wanted a car that didn’t pollute. It gave me a better conscience driving.”

At Norwegian petrol stations many fuel pumps have been replaced by fast-charging points, and across Norway there are now more than 27,000 public chargers.

This compares with 73,699 in the UK – a country 12 times bigger in terms of population.

That means that, per 100,000 people, Norway has 447 chargers while the UK has just 89, according to a recent report.

Tesla, VW and Toyota, were Norway’s top-selling EV brands last year. Meanwhile, Chinese-owned marques – such as MG, BYD, Polestar and XPeng – now make up a combined 10% of the market, according to the Norwegian Road Federation.

Norway, unlike the US and EU, has not imposed tariffs on Chinese EV imports.

Ms Bu says there’s “not really any reason why other countries can not copy Norway”. However, she adds that it is “all about doing it in a way that can work in each country or market”.

Norwegians aren’t more environmentally-minded than people elsewhere, she reckons. “I don’t think a green mindset has much to do with it. It has to do with strong policies, and people gradually understanding that driving an electric car is possible.”

Yet Norway is also a very wealthy nation, which thanks to its huge oil and gas exports, has a sovereign wealth fund worth more than $1.7tn (£1.3tn). This means it can more easily afford big infrastructure-build projects, and absorb the loss of tax revenue from the sale of petrol and diesel cars and their fuel.

The county also has an abundance of renewable hydro electricity, which accounts for 88% of its production capacity.

“A third of cars are now electric, and it will pass 50% in a few years,” says Kjell Werner Johansen from the Norwegian Centre for Transport Research. “I think the government accepts that a few new petrol or hybrid cars will still be on the market, but I don’t know anybody who wants to buy a diesel car these days.”

The company says it sold 207,734 EVs in December, taking its annual total to 1.76 million, as subsidies and discounts helped attract customers.

It comes as Tesla is due to announce its own quarterly sales figures later on Thursday.

The US electric car maker maintained a slim lead in EV sales over BYD in the previous quarter but the Shenzhen-based firm has been narrowing the gap.

BYD’s total vehicle sales jumped more than 41% in 2024, year-on-year. The surge was powered mainly by sales of its hybrid cars.

The company has benefited from a rise in car sales in its home market, as intense competition drove down prices and government subsidies encouraged consumers to replace their old cars with EVs or other more fuel efficient options.

BYD sells 90% of its cars in China, where its been extending its lead over foreign brands like Volkswagen and Toyota.

The rise of BYD and other Chinese EV makers contrasts with the challenges faced by some legacy car makers, which have been struggling in major Western markets.

Last month, Honda and Nissan confirmed that they were holding merger talks, as the two Japanese firms seek to fight back against competition from the Chinese car industry.

Also in December, Volkswagen announced it had reached a deal with the IG Metall trade union which will avert plant closures in Germany and avoid immediate compulsory redundancies.

The German motor industry giant had previously warned it might have to shutter plants in the country for the first time in a bid to cut costs.

Earlier in the month, the boss of car making giant Stellantis, Carlos Tavares, quit with immediate effect following a boardroom clash.

His abrupt exit from the company – which owns brands including Vauxhall, Jeep, Fiat, Peugeot and Chrysler – came two months after Stellantis issued a profit warning.

In the third quarter of 2024, BYD saw its revenues soar, beating Tesla’s for the first time.

It posted more than 200bn yuan ($28.2bn, £21.8bn) in revenues between July and September – a 24% jump from the same period last year, and more than Elon Musk’s company whose quarterly revenue was $25.2bn.

However, Tesla still sold more electric vehicle (EVs) than BYD.

Chinese car makers have been trying to boost sales of their EVs outside the country but have faced pushback in some major markets.

In October, European Union tariffs of up to 45.3% on imports of Chinese-made EVs came into force across the bloc.

The US has also imposed a 100% duty on EVs from China and President-elect Donald Trump is expected to impose further tariffs on imports.

Meanwhile, BYD has been expanding its foothold in emerging economies.

Last month, it faced a setback in Brazil – its largest overseas market – with authorities halting the construction of a BYD factory, saying workers lived in conditions comparable to “slavery”.

BYD said it had cut ties with the construction firm involved and remained committed to a “full compliance with Brazilian legislation”.

Musk, the chief executive of Tesla, has waded into British politics openly on social media, predicting “civil war” and criticising prime minister Sir Keir Starmer.

But behind the scenes his firm was trying to persuade the new government to extend a policy that would boost his firm’s profits.

The company called for the mandate to boost electric car sales to be extended to lorries, and said electric vehicle (EV) subsidies could come from charging people buying petrol and diesel cars.

The government should ask those still choosing to purchase a new polluting vehicle, to pay more,” Tesla’s European boss, Joe Ward, wrote in a letter addressed to roads minister, Lilian Greenwood, in July.

The letter, released under a Freedom of Information request made by the EV newsletter The Fast Charge, shows that Tesla “applauded the Labour Party’s strong position [on] decarbonisation of the energy system by 2030, growth and net zero”.

The praise came just weeks before Musk lashed out online at the UK government over the summer riots.

The BBC reported in September that Musk was not invited to the government’s investment summit partly because of tensions over his political interventions.

Since then the billionaire has become the indispensable right-hand man to incoming US president, Donald Trump. The surging value of his stake in Tesla since the election there has underpinned an incredible rise in Musk’s wealth.

The UK government is currently consulting on changes to a key measure, meant to encourage sale of electric cars, the Zero Emission Vehicle (ZEV) mandate.

The ZEV mandate requires carmakers to sell a set number of EVs per year, and if they cannot meet their targets, they have to purchase credits from other EV makers who have sold more of the lower polluting vehicles.

UK carmakers are pushing for the policy to be diluted, arguing customers are not yet buying EVs in high enough numbers.

The letter from Tesla lobbied for the opposite policy, saying the ZEV mandate “must be protected and strengthened”.

Tesla stands to become a major beneficiary of the ZEV mandate as it can sell surplus credits from its imports of its own EVs, made in China.

Tesla also lobbied the new government for the UK to lead on the “scale up of autonomous vehicles”, and offered a demonstration of the companies’ vision.

Electric car sales grew in November for the 11th consecutive month, according to the Society of Motor Manufacturers and Traders (SMMT) as carmakers raced to meet tough targets.

Manufacturers gave “massive” discounts worth around £4bn on electric vehicles (EVs), the SMMT said.

Some firms are expected to miss the government’s electric vehicle (EV) sales targets this year and could face fines, but flexibilities in the rules mean this is unlikely.

The rules say carmakers have to sell a certain amount of EVs but they are able to buy sales credits from other firms or “borrow” from their own quotas in future years.

SMMT chief executive Mike Hawes said manufacturers were investing in electric vehicles “at unprecedented levels” and “spending billions on compelling offers”.

But he added: “Such incentives are unsustainable – industry cannot deliver the UK’s world-leading ambitions alone.”

New electric car registrations bucked a general downwards trend for other vehicles.

Although the bulk of demand for new cars came from fleet sales to businesses, this sector still saw sales fall overall. Private buyer sales also dropped.

Sales of new petrol cars fell by more than 17%, diesel cars fell by more than 10%, while hybrids and plug-in hybrids dropped by more than 3% and 1% respectively.

The government has promised to meet with carmakers to discuss EV targets. It has said the targets “will not be weakened” but it will discuss “flexibilities”.

Manufacturers have said they won’t be able to meet the current targets, which state EVs must make up 22% of cars sold in 2024, without more customer incentives.

That figure is currently at 18.7%, and they think they may hit 19% by the end of the year.

However, that still leaves them open to paying other manufacturers who have built up credits for selling EVs.

While many of those companies are either Chinese or make cars in China – for example, US firm Tesla – other carmakers may also have credits.

Manufacturers have long argued that it doesn’t make sense to subsidise Chinese firms by buying credits.

Earlier this month, both Ford and Stellantis, which owns Vauxhall, announced job cuts, which both partly pinned on the EV targets.

But both firms have previously raised doubts about their future in the UK because of other factors.

Ford closed its Bridgend factory in 2020, getting rid of 1,644 jobs, citing Covid as one of the reasons. Vauxhall’s former owner PSA Group suggested in 2019 that Brexit threatened its Luton factory.

In general UK-based companies have been embracing the move to electric, with JLR’s Jaguar attracting a lot of attention over its recent rebrand as an electric-only carmaker.

Other car brands are also outperforming the government’s EV targets.Vauxhall’s EVs represent 36% of its sales, Peugeot’s 29%, Renault’s 27%, MG’s 27% and Skoda’s 23%, according to the non-profit New AutoMotive.

A Department for Transport spokesperson said it was “alive to the global challenges the industry is facing”.

It is investing £2.3bn “to support industry and boost the uptake of electric vehicles,” the spokesperson said, adding that Labour’s manifesto commitment to phase out new cars with internal combustion engines by 2030 “has not changed”.

Output of all cars dropped by more than 15% from a year earlier, mainly due to a fall in exports following weak demand, the Society of Motor Manufacturers and Traders (SMMT) said.

Production of electric and hybrid vehicles declined by a third compared with last year, due to flagging European demand and the retooling of factories for new models.

The figures come after Vauxhall maker Stellantis said this week it would close its Luton van-making factory, partly due to rules imposed to speed up the transition to electric vehicles in the UK.

In addition, Ford said last week it would cut 800 jobs in the UK over the next three years because of difficult trading conditions, including intense competition and less demand for electric vehicles (EVs).

Mike Hawes, the SMMT’s chief executive, said: “These are deeply concerning times for the automotive industry, with massive investments in plants and new zero emission products under intense pressure.”

Globally, demand for EVs has slowed, he said, while in the UK, manufacturers have to contend with “the toughest targets and most accelerated timeline” without the incentives necessary for customers to drive demand.

Although production of EVs fell in October, sales of electric cars in the UK have been increasing.

In October, they made up one out of every five cars registered, although industry sources insist this is largely down to unsustainable discounting.

There has been a growing row between the government and the industry over the sale of new petrol and diesel cars being phased out over the next few years.

Under the UK’s zero emissions vehicle (ZEV) mandate, manufacturers are currently required to sell a certain percentage of cars and vans that do not emit any emissions ahead of a 2030 ban on the sale of new petrol and diesel cars.

In 2024, EVs must make up 22% of a carmaker’s car sales, and 10% of van sales. This target is set to rise.

For every sale that pushes it outside the mandate, firms must pay a £15,000 fine – but they can also buy “credits” from firms that can meet this mandate.

Business Secretary Jonathan Reynolds has said there will be a “fast track” consultation of how the EV targets are enforced.

However, he also reiterated Labour’s commitment to the 2030 phase-out of new petrol and diesel vehicle sales.

A spokesperson for the Department for Business and Trade said the government knew the industry “needs certainty and stability” and was investing £2bn in car manufacturing and more than £300m to support the uptake of electric vehicles.

“We continue to work closely with the sector to make the transition a success,” the spokesperson added.

The closure of Stellantis’ factory at Luton will put 1,100 jobs at risk.The former UK manufacturing lead for Stellantis, Mark Noble, expressed his “disappointment, shock, and anger” about the closure plans.

He said the site was closing “for a number of reasons that are external to the plant”, including uncertainty over Brexit tariffs and the ZEV mandate.

He said troubles for Stellantis’ UK plants at Luton and Ellesmere Port “started with Brexit” because it “caused a lot of uncertainty”.

“When you’ve got two UK plants that export 80%+ of their build, with the tariff confusion and no clarity that really hurt the two plants.”

He added that for the ZEV mandate the government “has to decide: is this a tax, a £6bn tax on the car companies, or is it their mandate to go green?”

“They need to make it possible for the car manufacturers to meet these targets,” he said.

He added that there were still barriers to mass adoption of EVs, including a lack of charging infrastructure.

“If everybody bought an electric vehicle tomorrow, I don’t see how we charge them,” he said.However, Vicky Read, chief executive of EV charging industry body Charge UK said a charger “is being installed every 25 minutes”.

Charging rollout is reliant on private sector funding, so talk of electric car targets being weakened is “incredibly concerning”, she said.

According to government figures, there are more than 71,000 public charge points in the UK, with 57 added on average each day.

Government adviser James Richardson, the director of analysis for the Climate Change Committee said that traditional car companies were at risk of being overtaken by new competitors.

“Companies don’t always see how quickly these markets can change, and then they can get left behind,” he said.

He said electric sales targets were “really helping to send that signal to companies that they need to move fast, or competitors will come in and take the market from them”.

The comments add to a growing row between the government and the industry over the sale of new petrol and diesel cars being phased out over the next few years.

On Tuesday, Stellantis, the owner of Vauxhall, said it would close a plant in Luton, putting 1,100 jobs at risk, partly due to the EV targets.

Business Secretary Jonathan Reynolds told the House of Commons on Wednesday that Stellantis’s decision was “a dark day for Luton”.

It joins Ford in axing UK jobs. Last week, it announced it will cut 800 jobs in the UK over the next three years, partly due to the EV target but also because of increased competition.Ms Brankin said: “The one thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles.”

She said Ford has invested “significantly” in the production and development of EVs, with “well over” £350m put into electrification in the UK.

“So we kind of need to make it work,” she said.

Both firms have previously raised doubts about their future in the UK because of other factors, separate to EV targets.

Ford closed its Bridgend factory in 2020, axing 1,644 jobs, citing Covid-19 as one of the reasons while Vauxhall’s former owner suggested in 2019 that Brexit threatened its Luton factory.

Meanwhile, some analysts have said a shift towards luxury vehicles and away from cheaper models are also part of the reason for Ford’s problems.

Reynolds blamed the previous government for Stellantis’ Luton closure, saying Labour had “inherited a position of extreme frustration”.

He said there would be a “fast track” consultation of how the EV targets are enforced, but reiterated Labour’s commitment to a 2030 phase-out of new petrol and diesel vehicle sales.

However, shadow business secretary Andrew Griffith said the 2030 target was a “jobs killer” and that Stellantis’ decision was “the direct result of a government policy that is simply unworkable for industry”.

The previous Conservative government moved the deadline for the phase-out from 2030 to 2035, but it kept penalties for non-compliance.

Under the current mandate, a percentage of the cars that companies sell must qualify as zero-emission.

EVs must make up 22% of a company’s car sales and 10% of its van sales this year.For every car sale outside of that, firms must pay a £15,000 fine.

That target is set to rise to 28% for cars and 16% for vans in 2025. The rules will then get tougher every year ahead of a complete ban of new petrol and diesel car sales.

Labour has said it intends to reinstate the 2030 target as part of its wider commitments to climate change policy, but it will consult on how the “direction of travel” for the policy will work.

There are flexibilities in the current system, allowing manufacturers that can’t meet the targets to buy “credits” from those that can.

In practice, this means firms could buy credits from companies such as Tesla or Chinese firm BYD, which build electric models exclusively.

Manufacturers argue that demand for electric cars has not been as high as was expected when the rules were drawn up.

As a result, to avoid fines, they say they are having to discount new vehicles heavily, or subsidise rivals that only build electric cars, none of whom have a manufacturing base in the UK.

Sales of electric cars have, however, been increasing. In October, they made up one out of every five cars registered. However, industry sources insist this is largely down to unsustainable discounting.

Reynolds told an industry audience at a dinner hosted by Society of Motor Manufacturers & Traders (SMMT) on Tuesday he is “profoundly concerned” about the way zero-emissions policies currently operate.

“I don’t believe the policies that we have inherited, and I mean specifically in relation to zero emission vehicles, are operating today in a way anyone intended them to,” he said.

He and Transport Secretary Louise Haigh met car firms last week to discuss the EV rules.A number of options have been suggested, such as allowing sales credits to be transferred between cars and vans and giving “credits” for British-made EVs sold abroad.

The SMMT has called for urgent government intervention to safeguard the sector, warning that weak demand for electric cars and the requirement to fulfil sales quotas had “the potential for devastating impacts on business viability and jobs”.

Nissan, which builds EVs at its plant in Sunderland, has said at the time the rules are “undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment”.