December 10, 2021
In the media, Norway, California, and Québec are widely acknowledged as innovative leaders in electric vehicles (EVs). These three jurisdictions pursued and implemented market-creating electric vehicle (EV) policies earlier and with greater on-the-ground success than their neighbours, resulting in both a significant number of EVs on the road and substantial EV-related economic growth. In 2020, EVs, battery and plug-in hybrid, commanded a 75 per cent market share of new vehicle sales in Norway, while Québec and California represented 45 per cent of national EV registrations in the U.S. and Canada respectively. Beyond just creating markets for zero emission transportation, these three jurisdictions are also nurturing domestic manufacturing, with California producing passenger EVs, Quebec producing medium and heavy duty EVs, and Norway producing electric maritime vessels. Our research set out to answer the question of how California, Norway, and Québec achieved this innovative leadership, which combined both experimental EV adoption policies and related industrial policies?
To answer this question, we first created an inter-disciplinary framework, which combined two recent theoretical advances from political science (i.e., decarbonization policy pathways) and evolutionary economic geography (i.e., regional innovation systems) (Figure 1). Next, we carried out 23 semi-structured interviews with experts in these three jurisdictions and combined this with data from a range of secondary sources (e.g., government documents, think tank reports, media articles). Our new framework helped to organize this data and assess the variety of political and economic factors behind the EV leadership shown by California, Norway, and Québec.
The extent to which EV policies take hold in a region (or not) is influenced by existing industries, organizational support, institutions, and natural assets, with these conditions differing across the three jurisdictions being studied. We found that incumbent passenger automakers did not have a major presence in any of our three cases. Norway and especially Québec have supportive state-owned hydroelectric utilities. Norway and California’s oil industries, which faced stagnant or declining production, could not block EV policy development. Meanwhile, California’s aerospace and technology sectors provided key skills that successfully attracted passenger EV manufacturing. Institutionally, all cases benefitted from early, strong, and durable EV policies. In particular, Norway benefitted from a unique pre-existing tax structure for internal combustion engine vehicles. All three jurisdictions boasted facilitative organizational support structures. California’s powerful air pollution-fighting institutions, notably its Air Resources Board, focused a lot of its attention on vehicle electrification. Québec policymakers rallied Hydro-Québec’s deep resources, monopoly power, and long-standing interest in regional economic development to overcome coordination challenges and pursue transportation electrification. Norwegian politicians directed the country’s state-led innovation system to promote the economic opportunities associated with electrifying transportation. In all three cases, influential environmental groups played an instrumental role in advancing EV policies and promoting regional economic development. Natural assets also loomed large: in Québec and Norway, cheap and relatively green hydropower proved a crucial natural asset, while in California, it was the scarcity of clean air that drove the adoption and use of EVs.
While each of the three jurisdictions has embarked on different EV leadership paths, we argue that these differences are a function of how EV policy entrepreneurs engaged the unique pre-existing local assets described above through the causal mechanisms of normalization, coalition building and capacity building. Looking first at normalization, norms informed the rationale for engagement, be it the need for clean air in California, historic environmental leadership in Norway, or hydro-powered economic development in Québec. Over the last decade, as EV policies multiplied and EVs became more common, societal norms around electrifying transportation emerged and reinforced related governance experiments. Capacity building, given the often nascent and expensive EV technologies, remained crucial in all three jurisdictions. All cases employed EV purchase and use incentives. California, due to its institutional legacy and large population, had a complex layering of EV policies at the federal, regional, and municipal levels. Norway created an extensive public charging network and subsidized EVs to the point of cost parity with fossil-fuelled vehicles. Québec has long built regional capacity for EV-related R&D and technology commercialization. Evidence for capacity building mechanisms is not limited to discrete EV policies but also includes the fruits of efforts by EV user associations and other non-state actors to advance electrified transportation. Finally, in all three cases, coalition building between local industries and environmental groups helped to secured multi-party political support. The minimal to non-existent presence of incumbent passenger automakers reduced the potential for and strength of counter-coalitions.
Beyond developing a new way to think about EV adoption and leadership, this study confirms a central argument regarding experimental climate policy governance, namely that supportive institutions have a key role in jointly exploring policy solutions with public and private actors and in scaling up successful policies. For instance, California’s Air Resources Board retooled the early zero emission vehicles (ZEV) mandate, after closer consultation with industry, with the new version directing valuable ZEV credits to EV manufacturers, notably Tesla. Over time, this policy has been scaled up in ambition, applied to more vehicle classes, and adopted by other jurisdictions. Norway’s policymakers, emboldened by success with EVs and prodded by local NGOs, created a national market for electrified maritime transportation. Associated policies generated revenue for local shipyards, reduced costs for ferry companies and have subsequently been scaled to encompass cruise ships visiting Norwegian fjords. In Québec, long-term private sector collaboration and funding from public institutions enabled early experimentation in R&D and the eventual commercialization of EV-related technologies and manufacture of electric commercial and recreational vehicles.
In all three cases, policymakers and other policy actors, through great uncertainty, iteratively and collaboratively attempted to advance the dual mandate of increasing EV adoption and promoting regional economic development. As Sabel and Victor (2015) stress, a key driver of successful experimental governance—what motivates actors to engage—is the threat of sanction. Transport manufacturers in all three jurisdictions faced a penalty default: payments for ZEV mandate credits, exclusion from lucrative ferry routes, or promised prohibition from selling polluting busses to transit authorities or fossil-fuelled passenger vehicles to households. For economic incumbents, the potential cost of inaction brought them to collaborate with other policy actors to pursue the electrification of transport.
For a detailed comparison of EV politics in California, Norway, and Québec conducted by Dr. Lemphers, and Professors Steven Bernstein, Matthew Hoffmann, and David A. Wolfe, see their recently published Smart Prosperity Institute Working Paper.