Posted Wednesday, 22 June 2016, 18:47
It seems the world can’t shift quickly enough to electric vehicles. Within the past few months there has been a steady drumbeat of stories about possible bans on combustion vehicles, prompting calls for a more rapid deployment of electric vehicles. At this point, the push for more electric vehicles isn’t just coming from tree huggers and electric vehicle enthusiasts, but from governments and automakers as well.
I know we’re all trying to stay up-to-date with our Twitter feeds, but let’s just take a moment to look at what has recently transpired, with the goal of giving it some context and perhaps clarifying what was announced. As for the government announcements, here’s what we have collected so far from what the policymakers have stated:
- Norway: Although it was widely reported as a ban, Norway’s Minister of Climate and Environment tweeted that the major Norwegian parties have agreed to “strong actions” to phase out fossil fuel cars by 2025, but not an outright ban.
- The Netherlands: In what was also initially reported as being a ban, the Dutch government took what was really a first step toward banning combustion vehicles by 2025, with a motion passed by its lower house of parliament.
- Germany: A high-ranking government official reportedly indicated that having a mandate by 2030 would be necessary to achieve Germany’s emission goals of 80%-95% carbon reduction by 2050. Though Germany’s recent electric vehicle promotion program is a very big deal, this statement was qualified as a conditional statement, not a ban.
- India: The Energy Minister announced India’s ongoing work toward becoming a 100% electric vehicle nation by 2030. This one is also not a ban, and it differs from the above statements by referring to the fleet (not just new sales), and in its intent is to be self-financing.
- United Kingdom: The British government aspires to having every new car be an ultra-low-emission vehicle (i.e., plug-in electric or fuel cell vehicle) by 2040.
- California and seven other U.S. states: California’s goal is to have 1.5 million electric vehicles on the road by 2025, and hopes for at least 15% of electric vehicle sales in 2025 with its Zero-Emission Vehicle (ZEV) “mandate.” The eight states combined are committed to having 3.3 million electric vehicles on their roads by 2025. This goes well beyond the Obama Administration’s once-held goal of having 500,000 electric vehicles nationwide by 2015.
- Canadian provinces: Québec announced its own plan for having 1 million electric vehicles (20% of all vehicles) by 2030, and it is contemplating its own ZEV mandate, as is British Columbia.
- National, provincial and state governments belonging to the International Zero-Emission Vehicle Alliance (ZEV Alliance), which includes the European, U.S., and Canadian governments mentioned above, are calling for a full transition to 100% electric vehicle sales by 2050.
We at the ICCT have compiled the government electric vehicle targets through 2015, and they would amount to sales of more than 7 million electric vehicles per year in 2025. We also found that government targets would have electric vehicles accounting for more than a 15% share of new vehicles in 2025, but only in the very progressive electric vehicle markets like those listed above and China, which have supportive policies in place. These commitments are big, but they do not amount to actual bans.
We might loosely refer to these governments’ calls as the “demand side” of what society is calling for to meets its clean air, petroleum reduction, and climate change goals.
Let’s turn to the “supply side.” What are the automakers planning to produce?
- Renault-Nissan: The company has long targeted having 20% of its sales be electric vehicles in 2020, and that goal was recently reiterated by Nissan for its Europe planning. Twenty percent of the company’s sales would be more than one million vehicles per year. The Renault-Nissan Alliance sold over 70,000 electric vehicles in 2015, the most of any automaker.
- BYD: The Chinese automaker has announced it will sell 500,000 electric vehicles by 2020. In 2015, the company’s electric vehicle sales were over 60,000, the second highest globally.
- Volkswagen: After first announcing a target of 1 million electric vehicles by 2025 in May, Volkswagen later committed to having sales of 2-3 million electric vehicles by that year, which would be about a quarter of its total vehicle sales. (Audi, which is part of the Volkswagen Group, had already announced a 25% goal). In 2015, Volkswagen sold more than 55,000 electric vehicles, putting it in third place for electric vehicle sales.
- Tesla: The electric vehicles specialist recently suggested it could produce 500,000 electric vehicles per year by 2018, or two years earlier than originally planned. The company’s 2015 electric vehicle sales were over 50,000, the fourth highest globally.
- Others are working on their own goals. For example, Mercedes is aiming to produce 100,000 electric vehicles by 2020. But most of the rest have been coy about their volume projections.
Of course, there is also greater scrutiny than ever on vehicle tailpipe emissions (as can be seen in our discussion of emission testing programs in the United Kingdom, France, and Germany). South Korea, one of the world’s largest diesel markets, has launched a probe into Volkswagen and has announced it plans to restrict diesel and move toward having electric vehicles account for 30% of vehicle sales by 2020. And, as part of the Volkswagen’s ongoing settlement discussions with the U.S. Environmental Protection Agency, the German automaker might ramp up its electric vehicle production in the United States.
Adding all of this up, it's conceivable that if everyone – governments, automakers and consumers – all align, we could see the birth of a robust electric vehicle market.
But let’s be real. There are many outstanding technical, policy, and consumer questions, and several things would have to happen to let the market take off. Global economies of scale, innovation, and competition would have to drive down battery prices and enable the widespread market to mature. Consumers, as pre-orders and recent surveys testify, are increasingly becoming aware of, and starting to really want, electric vehicles. Increased model availability, greater electric vehicle choices, and less expensive 200+ mile range electric vehicles are all critical parts of the equation. And there’s the question of making sure the electric cars are powered from low-carbon electrons. Governments keep getting smarter when it comes to implementing effective incentives, and also in working directly with automakers on innovative public-private electric vehicle campaigns (see the UK’s Go Ultra Low). Electric public utilities (such as those around Los Angeles and San Diego) are all starting to see major benefits to integrating electric vehicles into their long-term plans, and are helping to build the charging infrastructure.
This progression, to be sure, is happening, and the world is turning. The question is how fast?