The Rise and Fall (and Rise, and Fall) of Electric Vehicles
The Center for Automotive Research in Michigan recently cancelled its 2012 annual electric vehicle conference, with the conference co-director stating “We see the hype and the activity, but there continues to be no real business case.” This is a far cry from sentiment a few years ago, when Nissan’s CEO forecast that 10 percent of the world car market would be EVs by 2020, Warren Buffet upped the ante by predicting that all cars will be electric by 2030 (and put his money where his mouth is), and the Christian Science Monitor chronicled the great electric car race of 2010.
What happened? At first glance it may seem that there has been a dramatic shift in electric vehicle prospects. But closer examination reveals that this is just one more episode in a long-running drama. More so than for most emerging technologies, opinions regarding the future of electric vehicles seem to cycle between periods of enthusiastic optimism and bouts of near despair. For those new to the conversation some history is in order.
In 1990 General Motors announced that it would market an electric vehicle based on the GM Impact concept car. That same year the California Air Resources Board mandated that beginning in 1998 two percent of the passenger vehicles placed for sale in California must be zero emission vehicles (ZEVs), with the requirement increasing to 5 percent in 2001 and 10 percent in 2003. During the ensuing decade the Board maintained support for the mandate but, in recognition of ongoing ZEV cost issues, it pushed back the effective date and reduced the percentage requirements, essentially trading off reduced ZEV deployment in exchange for greatly increased production of the cleanest conventional vehicles. By 2006 an award-winning documentary pronounced the electric vehicle dead and searched for the killer.
Then beginning in the late 2000’s the tide began to turn. As technology improved and costs came down, many jurisdictions outside of California began to aggressively encourage vehicle electrification, adopt ambitious goals, and provide attractive incentives. In China, for example, the draft 12th Science and Technology Development Five Year Plan set a goal that sales of electric-drive New Energy Vehicles would total 5 million by 2020. Vehicle manufacturers began to voluntarily pursue a variety of advanced technologies to secure their competitive position in the global marketplace, with the Nissan Leaf becoming the first mass market EV. In January 2012 the Air Resources Board for the first time made changes to the ZEV program that increased rather than decreased the number of ZEVs required in future years. Perhaps most telling, the 2011 sequel to the 2006 documentary “Who Killed the Electric Car” found the electric car to be gaining its revenge.
But the boom-and-bust cycle continues on, and today’s conventional wisdom is turning negative again. A quick sampling of recent press headlines finds that “Even With $4 Gas, Electric Cars Face Dark Days” (USA Today), “Engineers Cast Wary Eye on Role of Electric Cars” (Wall Street Journal), and “Electric Vehicle Sales Still Face Too Many Obstacles” (Los Angeles Times). Meanwhile China has scaled back its New Energy Vehicle goals, and the environmental benefits of electric drive are also being questioned.
It is easy to understand the enthusiasm for electric drive. ZEVs eliminate urban criteria pollutant emissions, and have the potential, when powered by renewable energy sources, to eliminate virtually all emissions from passenger vehicle transportation. They completely avoid deterioration or emission control system failures that can turn even the cleanest conventional vehicles into high emitters. By making use of diverse energy resources they help reduce our dependence on petroleum. They are highly efficient and help stretch energy supplies. New technologies have reduced the cost of batteries and fuel cell stacks, and additional cost reductions will be achieved as production levels ramp up.
It also is easy to see why enthusiasm periodically wanes in the face of stubborn problems. Cost and weight limit the size of the battery that can be installed in battery electric vehicles, and hence their range. Recharging a battery takes many hours under most circumstances. Although fuel cell vehicles feature longer range and more rapid refueling, careful planning and mutual commitment among disparate parties is needed to ensure a coordinated rollout of vehicles and fueling stations. Customer acceptance of EVs is also open to question. Early adopters by definition are more willing to try new technologies and make compromises, and are less concerned about risk. At some point, however, the demand for EVs from early adopters will be fully supplied. Before purchasing an EV, customers in the broader market will need to have a number of concerns addressed regarding cost, risk, vehicle range, convenience, and for some the environmental performance of the vehicle.
But any prognosis based on near term circumstances misses an essential point. Observers, and in particular policymakers, need to be patient and even-tempered. The transition to electric drive, while necessary to meet long-term climate goals, will take decades to be fully realized. There will inevitably be fits and starts along the way. The ICCT is sponsoring modeling work that will help to better characterize the dynamics of the transition and the costs and benefits of various investment strategies. But in the meantime it is clear that if policymakers want to continue to foster a transition to electric drive they will need to muster the fortitude to avoid over-hyping near-term successes and over-reacting to near term challenges.
Chuck Shulock was the manager of several CARB ZEV rulemakings.