Has Norway Reached Peak Demand?

Motor gasoline sales declined by 2.9%, dutiable diesel fell by 2.7%, and duty-free diesel declined by 2.6%. This decline follows sales that were flat in 2014, and then grew by 1% in 2015 and 3.2% in 2016. Overall petroleum product sales declined by 2.2%, although some categories of consumption, such as heavy fuel oil, jet kerosene, and other petroleum products all showed higher consumption.

Norway’s automobile fuel consumption is still higher than it was in 2013, and preliminary figures show that April 2018 petroleum product sales were 10.9% higher than in April 2017. Total automobile consumption in April was about 3% higher than in April 2017.

So it’s a bit premature to suggest that Norway’s fuel consumption is finally on the decline due to surging EV sales. But, this could finally be the start of the decline you would expect as EVs continue to increase market share.

In any case, Norway’s experience is instructive. The market share of EVs on Norway’s roads, following years of triple-digit growth, is above 5%. Growth rates in the U.S. have been far lower. Even though Norway’s growth rate has slowed in recent years, its 41% increase of EV sales in 2017 was still well ahead of the U.S. EV growth rate of 26%.

If Norway tells us anything, it’s that even rapid EV growth isn’t going to lead to peak demand as quickly as proponents think. It isn’t even clear that peak demand is yet occurring in Norway, and it is going to take years of double-digit EV growth for the U.S. to reach Norway’s level of EV penetration.

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