Almost a third of new cars sold in Norway last year were pure electric, a new world record as the country strives to end sales of fossil-fuel vehicles by 2025.

In a bid to cut carbon emissions and air pollution, Norway exempts battery-driven cars from most taxes and offers benefits such as free parking and charging points to hasten a shift from diesel and petrol engines.

The independent Norwegian Road Federation said on Wednesday that electric cars rose to 31.2 per cent of all sales last year from 20.8 per cent in 2017 and just 5.5 per cent in 2013, while sales of petrol and diesel cars plunged.

"It was a small step closer to the 2025 goal," by when Norway's parliament wants all new cars to be emissions-free, Oeyvind Solberg Thorsen, head of the NRF, told a conference.

But he cautioned that there was a long way to go since two-thirds of the 148,000 cars sold in 2018 in Norway were powered by fossil fuel or were hybrids, which have both battery power and an internal combustion engine.

Tesla sold 245,000 cars in U.S. in 2018

The news comes as Tesla announced it will be reducing the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000 US to make up for the loss of federal tax credits for electric car sales.

Tesla delivered over 245,000 electric cars and SUVs last year, nearly as many as all previous years combined.

Markets responded by driving down Tesla stock by seven per cent to $310 US.

Electric cars made up 1.9 per cent of the new passenger vehicle market in U.S. and 2.2 per cent Canada, as of October 2018.

Norway's sales figures consolidate its global lead in electric car sales per capita, part of an attempt by Western Europe's biggest producer of oil and gas to green its economy.

The International Energy Agency (IEA), using a slightly different yardstick for electric vehicles that includes hybrids that can be plugged in, showed Norway's share at 39 per cent in 2017, far ahead of second-placed Iceland at 12 per cent and Sweden at six per cent.