The Tesla Model S has a bunch of great things going for it, but there's definitely a weird facet of it's sales strategy that is a little funky. The car's second largest market, in the entire world, is Norway. Little, tiny Norway. In fact, it's the best-selling car there overall. And here's the reason why.
The Model S has a base price of around $70,000 in the US, which would make Norway seem a bit unusual. Usually, the best-selling car in any country is, if not cheap, not one of the more expensive cars on the market. For comparison, a Mercedes C63 AMG Coupe only starts at $65,625. And it's not like the Model S is magically super-cheap straight from the factory once it gets to Oslo, either, as the Model S goes for over $100,000 over there.
But even still, the Tesla is a total phenomenon. In the month of March this year, Tesla moved over 1,500 of the things. That's not just more cars than any other sold in the country in one month, that's the most cars sold in one month in Norway, ever.
So what gives, Norway?
Two things are helping to goose Tesla sales up in Scandinavia, actually. The first is that Norway is a pretty wealthy country, relatively speaking, and it values its reputation as an environmentally country, as the excellent Freakonomics podcast explains:
Well, for starters, Norway is fond of electric vehicles generally. It has a higher share of them than any other country in the world; it's easily the biggest European market for electric vehicles. This has to do with both demand and supply. On the demand side: Norwegians are affluent and see themselves as proudly green; the country plans to reduce its greenhouse emissions by 30 percent by 2020. And, on the supply side: Norway gets virtually all of its electricity from hydropower, which is both cheap and clean.
But valuing the environment isn't enough to fund the purchase of all those pricey Teslas. The other part of the equation is that it Norway gives ENORMOUS subsidies to people who buy electric cars, all funded by its absolutely monumental sovereign wealth fund:
... if you buy one, the annual registration fee is waived, as are tolls, and you get access to less-congested traffic lanes. If you drive for a living in Norway, an electric car gets you an income-tax deduction. And – here's the biggest difference – the Norwegian government makes electric cars, including the Tesla, exempt from some very, very hefty sales taxes. So when you add all this up…
The difference between the price of a Tesla and the price of a similar gasoline-driven car is huge in Norway compared to other countries. And so in relative terms, the Tesla is a lot cheaper than other cars.
Consumers are also incentivized to get a Tesla now, rather than later, as a lot of the subsidies will end once the country has 50,000 cars. And all that is swell and good.
Except this whole plan has one deep, dark, dirty little secret – all of those little extras are funded by the country's aforementioned sovereign wealth fund. A sovereign wealth fund which is largely made up of oil money.
Which makes the morality of the whole thing extremely dichotomous. So there's that.
Head on over to Freakonomics to listen to the whole thing about the Tesla sales weirdness in Norway, or read the transcript here. It's definitely bizarre.
Photo credit: David Van Der Mark