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The world turns to electric vehicles

Published Wed, 2016.06.22 | By

Nic Lutsey

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:
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? 
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?