Rystad Energy Research: Heavy-Duty Vehicles Key to Norway’s Road Fuel Demand Amidst EV Uptake


As electric vehicles (EVs) continue to dominate Norway’s automotive landscape, the surprising persistence of road fuel demand has raised questions about the true impact of EVs on diesel and gasoline consumption. Recent research and modeling by Rystad Energy have revealed the underlying reasons for this phenomenon and emphasized the crucial role of electrifying heavy-duty vehicles in reducing overall fuel consumption. Norway, often hailed as a global leader in EV adoption, has seen electric cars accounting for at least 80% of all passenger vehicle sales for the past three years. In 2023, EVs, including plug-in hybrid (PHEV) and battery electric vehicles (BEV), constituted around 90% of all new car sales. Remarkably, over 50% of passenger cars in Oslo are now electric, with BEVs projected to surpass 50% within the next two years.

Despite this substantial growth in EV sales, a corresponding decline in fuel demand has not materialized. Statistics Norway (SSB) data shows that diesel and gasoline demand has only modestly decreased since 2017. In the first half of 2023, road fuel sales hovered around 62,000 barrels per day (bpd), representing a 10% drop from the 70,000 bpd recorded between 2017 and 2019, well after the EV boom commenced. Current consumption remains relatively stable, ranging between 60,000 and 70,000 bpd, with no precipitous drop forecast in the near term.

However, Rystad Energy’s research, which delves beyond SSB’s reported figures, paints a different picture. Their model takes into account official fuel sales, annual average mileage by vehicle type, and car sales data as reported by SSB. This comprehensive approach, factoring in vehicle efficiency as of 2022, reveals a clear reduction in road fuel demand from passenger cars, declining by more than 20% since 2016, aligning with the BEV market’s growth.
Meanwhile, fuel demand from buses and trucks, primarily running on diesel, has increased from approximately 30,000 bpd between 2010 and 2015 to 32,000 bpd in 2022. A structural decline in fuel demand is not anticipated until the ongoing electrification efforts in these sectors take full effect. Norway’s status as a pioneer in transport electrification raises important questions for other nations striving to emulate its success.

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Artem Abramov, Head of Clean Tech Research at Rystad Energy, noted, “Electrifying the road transportation sector is a pillar of many countries’ energy transition strategy, with policymakers around the world offering incentives to those who switch to EVs. However, the situation seen in Norway could play out on a global scale as adoption ramps up. If efforts to lower emissions and reduce the carbon intensity of road transportation are to succeed, the focus should not be solely on passenger cars, but must also address heavy-duty vehicles that run on traditional fossil fuels.”

The Mileage Matters
The persistent fuel demand in Norway has prompted speculation that BEVs may not have as significant an impact on fuel displacement as previously assumed, or that BEV owners drive fewer miles on average. SSB’s data on average annual mileage by vehicle and fuel type offers insights to dispel such myths.

Since 2018, the average BEV in Norway has surpassed passenger cars of other fuel types in terms of mileage. In 2022, the average BEV covered 12,950 kilometers (km), exceeding the 12,000 km average for diesel passenger vehicles. Overall, the average mileage for passenger vehicles in Norway has steadily decreased, from approximately 13,800 km in 2007 to 11,100 km in 2022. The average distance covered by BEVs has gradually risen, from around 11,800 km in 2015 to 12,950 km. EV penetration in Norway is skewed towards customers and regions with above-average annual driving requirements, and constraints related to charging infrastructure and vehicle range are no longer major impediments.

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Population Growth
In addition to the growing fuel demand from trucks and buses, a burgeoning population and increased reliance on passenger vehicles contribute to the resilient consumption trend. The driving-age population in Norway, individuals over 20 years old, has increased by 800,000 since 2005, with the number of passenger cars per person rising from 0.65 to 0.75 over the same period. This means that, on average, Norwegians are more likely to own a car, leading to the distribution of total fuel sales over a greater number of vehicles.

Over the past five years, the average mileage of non-BEV passenger cars has started to taper off as battery electric cars gain greater market share. The BEV market now has the capacity to offset population growth and the rise in vehicles per capita, resulting in a decrease in the average mileage for non-BEV vehicles. Total mileage for diesel, gasoline, and PHEVs has declined by almost 20% since 2017, from around 33.7 billion km to 27.3 billion km in 2022.

Meanwhile, the importance of heavy-duty non-passenger road transport has increased across the country, with electrification progressing slowly. In 2022, battery-electric buses represented only 7.6% of all bus mileage in Norway, while the electric contribution for light/medium and heavy commercial vehicles stood at 2.8% and 0.2%, respectively. Consequently, the resilience of diesel consumption in the bus and truck sectors conceals significant fuel demand reduction, primarily occurring in the passenger car segment in recent years.

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Rystad Energy’s modeling sheds light on this trend, revealing the rapid decline in passenger car fuel demand concealed by official figures. The structural decline in road fuel demand has commenced in Norway as BEV adoption accelerates and electric cars become the norm. However, the pace at which demand diminishes will largely depend on the rate of BEV penetration in the bus and truck segment. If the transition in these sectors accelerates, the destruction of road fuel demand could snowball from 2025 onward.

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