Progress Report: Accelerating EV ambition is driving the transitionNigel Topping, CEO, We Mean Business coalition
Welcome to the May edition of the Progress report, where we look at how certain policy makers are backing the rapid transition to electric vehicles (EV), despite some high-profile moves in the opposite direction, how business is responding with action and calling for even more ambition.
Policy makers backing the EV transition
Costa Rica – a country that has long been at the forefront of ambitious climate action – is again leading the way with its plans to embrace the EV transition.
Costa Rica’s new president, Carlos Alvarado, has announced a plan to end fossil fuel use in transport by 2021, as part of a total ban on fossil fuels. The country is already streaks ahead in terms of electricity generation, with a 98% renewable power grid, but needs to tackle transport pollution to reach its aim of becoming the first fully decarbonised country in the world.
Also this month, the European Union has agreed the region’s first emissions restrictions on new large trucks, which will now have to emit at least 30% less CO2 by 2030, compared to 2019. The EU was called on to raise ambition, with France and four other EU countries calling on the union to set a reduction standard of 35-45 percent for 2030. Though certain industry groups said the new regulation was too aggressive.
Even though the new regulation has further to go in terms of ambition, it could have a significant impact on overall traffic pollution. This is because despite making up just 5 percent of road traffic in the EU, trucks account for a quarter of all the region’s transport emissions.
Meanwhile in the UK, the ban on new petrol and diesel cars could be brought forward ten years to 2030, from the current target of 2040, as the country comes under increased pressure from MPs to put an end to “a national health emergency”. Plans are also being drawn up to ban hybrid cars that rely on internal combustion engines, which would include the Prius and up to 98 percent of the vehicles currently on the UK roads.
And Poland is positioning itself as an e-mobility leader in Europe, aiming to have 1 million EVs on the road by 2025. It’s a priority for Poland to get ahead of the curve on the EV transition as the automotive industry accounts for 8% of the country’s GDP, according to Head of Energy Advisors to the President of the Republic of Poland Marta Gajęcka. Poland has already made strong progress in terms of electric busses, having established manufacturing plants and an EV battery plant.
Business is backing it up with action
Business is responding to these growing calls for increased ambition by taking concrete action to accelerate the EV rollout.
Volvo made a decisive move into the heavy road vehicle market this month and announced two new fully-electric trucks designed to replace diesel urban delivery and refuse collection vehicles.
Meanwhile, US brewer Anheuser-Busch has ordered 800 fuel cell trucks from Nikola Motors to deliver its beers with zero emissions and Los Angeles International Airport has ordered 20 buses from BYD in its bid to clean up the airport’s emissions. And BYD announced another deal for 200 electric refuse trucks in Indaiatuba, Brazil.
UK airport Heathrow is also embracing the EV transition, as part of its membership of The Climate Group’s EV100 and RE100 initiatives, with driverless electric ‘pods’ to deliver passengers to their plans.
Nissan has this month decided to not launch new diesel models in Europe, according to sources – joining other Japanese automakers Toyota Motor and Subaru in focusing on EVs in the region. Nissan is aiming for EVs to account for half of its new vehicle sales in Europe by 2025.
Also this month, Audi has announced plans to sell 800,000 electric and hybrid car in 2025,
And calling on governments to do more
More and more leading businesses want governments to raise their level of ambition on the EV rollout, to give them greater confidence to invest in new technologies and embrace opportunities.
In the US, many companies are trying to mitigate efforts by the Trump administration to weaken the existing vehicle fuel economy and emission standards as research from Ceres shows the existing standards benefit the auto industry and the broader economy.
More than 40 major national and international corporations, including General Mills, Nike and Unilever, with combined annual revenues topping $400 billion, recently sent a letter to EPA Administrator Scott Pruitt on the matter.
The letter to Pruitt pointed out that strong fuel-efficiency and emissions standards “strengthen the US economy, save business and consumers money, enhance the global competitiveness of the US auto industry, provide regulatory certainty needed to spur innovation, reduce both our dependence on oil and climate risk, and create jobs.”
Meanwhile, UK-based automaker Jaguar Land Rover has warned the Australian government that if it doesn’t step up on driving electric vehicle uptake, it could risk missing a major economic and environmental opportunity.
The companies joining The Climate Group’s EV100 initiative are sending a strong demand signal by committing to accelerating the transition to EVs. These companies range from leading power utilities like EDF to multinational fleet operators such as Leaseplan.
EV tipping point approaching
Globally the switch to EV is gathering pace. In the January-to-April 2018 period, EV sales rose 59% versus the same period of 2017. At those kinds of growth rates, the current share of new car sales that EVs hold could rapidly accelerate from the 2017 share of 1.34% to over 100% within ten years (#dotheExponentialMath).
Even this exponential growth is underestimating the speed of transition, according to Tony Seba, Lecturer in Entrepreneurship, Disruption and Clean Energy at Stanford University.
“By 2025, all new vehicles sold will be electric,” according to Seba, who charts out the disruptive path forward for the EV rollout.
With policy makers and businesses working together to raise ambition and drive action on the transition to low-carbon vehicles, these predictions could be well founded. Because of this, those automakers gearing up for the EV transition are well placed to harness the opportunities of this growing market.