Why is the EV rollout at risk of stalling?Helen Clarkson, CEO of The Climate Group
Ensuring a swift transition to electric vehicles is one of the clearest ways for governments to make significant progress on emissions reductions, writes Helen Clarkson. However, governments risk holding it back, she adds.
Despite the cancellation of the Geneva Motor Show, nothing is going to stop automakers pushing ahead with the announcement of their new state-of-the-art EV models.
BMW is one of several major manufacturers launching their latest EV offerings digitally to challenge electric car makers like Tesla. Adaptability has become par for the course for an industry in transition to a future of electromobility.
However, while automakers and the private sector are seizing this transition, governments risk holding it back. It is essential this year that they rapidly recognise the multiple economic, climate and health benefits the transition to EVs will bring and introduce consistent and ambitious policies to drive an even faster uptake.
Even beyond the auto industry, there are indisputable indicators of change from the private sector. Corporate fleets – which make up a huge proportion of global demand for cars – are increasingly switching to EVs, knowing it is simply good business.
The Climate Group’s EV100 initiative brings together 67 companies switching their fleets of over 2.5 million vehicles by 2030. They are set to save 42 million metric tons of CO2 equivalent every year – the annual emissions of 11 coal power plants.
In fact, they’re switching at such a pace, that automakers cannot meet their level of demand.
Early movers such as Daimler, Volvo and Volkswagen have committed to electrifying their entire fleets, but others have yet to demonstrate such leadership.
EV technology is moving forward in leaps and bounds with battery prices falling nearly 87% from 2010 to 2019 and expected to fall to $100/kWh by 2023. It has also been found that batteries can be recycled and research is underway into alternatives to lithium.
In October 2019, EV100 member LeasePlan published a total cost of ownership (TCO) analysis for EVs in Europe. The TCO for EVs was on average 5% cheaper than for petrol or diesel vehicles.
This is before accounting for foregone revenue if companies are unable to operate in jurisdictions with internal combustion engine vehicle restrictions, such as the 35 C40 Fossil Fuel Free Streets cities.
Over half of the 67 EV100 member companies active across 80 markets worldwide are headquartered in Europe. Since the turn of the year we have also seen that European vehicle emissions regulations are stimulating the supply of EVs into the market.
This is encouraging given that EV100 members cite a lack of EVs as their top barrier. This leadership is welcome, but we need to go further and faster still. By 2030, we need to call endgame on the internal combustion engine (ICE), so that we can halve emissions by 2030 and be on-track for net-zero by 2050.
Given that automakers have six-year product cycles, they need this level of foresight both to avoid wasted investments and to enable a smooth and inclusive transition for the industry.
The good news is that the European Green Deal policy agenda should enable a further ratcheting up of progress on EV rollout. Key elements include the Sustainable Mobility Strategy due later this year and the review of vehicle emissions standards in 2021.
We will be working with our European member companies to demonstrate business demand for a rapid Europe-wide ICE phase-out (as advocated already by Denmark and 10 other member states), coupled with stronger emissions standards and investment in charging infrastructure to make the transition a reality.
Aside from the climate benefits for the EU, policies to support a rapid transition to EVs will also help secure global competitiveness for the EU economy. We are already seeing job creation through, for example, the new Tesla factories in Europe.
And analysis shows that the shift to electric cars could create more than twice as many new jobs as the number that will be lost by the demise of the internal combustion engine.
The EU needs to implement policies that give automakers long-term clarity to switch their investment flows into electric vehicles and allow time for engagement with unions and workers to minimise disruption.
By supporting the transition to EVs with a 2030 end date for sales of petrol and diesel cars, governments will make health gains for their citizens by reducing air pollution. With three in four inhabitants of European cities exposed to unsafe levels of particles, according to the WHO, particulate pollution from cars is increasingly seen as ‘pollution enemy number one’.
It is the type of air pollution most closely associated with cancer, and chronic exposure has been found to affect the heart and the lungs. It is perhaps no surprise that tackling air pollution is the second most important driver for EV100 members, cited by 84%.
For example, four healthcare companies – AstraZeneca, Genentech, Mawdsleys and Novo Nordisk – joined EV100 in the past year, and all cite the health benefits of EVs as a key reason.
On the international stage, all eyes are on the EU and China to take the leadership position on climate and support the UK COP Presidency to secure successful climate negotiations in November.
Since clean road transport is one of COP President Alok Sharma’s top five priorities for COP26, an ambitious EU-wide ICE phase-out could be one clear way of demonstrating that leadership.
This is the Climate Decade. Ensuring a swift transition to electric vehicles is one of the clearest ways for governments to make significant progress on emissions reductions. Forward-thinking companies are demonstrating the economic and environmental benefits of EVs. Governments must not be a barrier to a full rollout.
They must urgently support it with policies that provide clarity and confidence for all businesses to get on board and accelerate progress towards the future of clean, sustainable, electric transport.