Zero-carbon fleets are set to drive the #FutureFasterBy Nigel Topping, CEO of the We Mean Business coalition
If you lived in London or New York in 1884 you’d be facing a crisis – the Great Horse Manure Crisis to be precise. So dependant were these leading cities on horses for the transport of people and goods that the manure burying the streets was literally poisoning the cities’ people.
Of course we know what happened next, by the early 1900s, virtually all the horses had been replaced with motorized vehicles and that particular problem had been resolved. Now a hundred years later we face a different problem, born out of the same need to move people and things, but one that can be resolved through a mixture of technology, innovation, political will and a desire to accelerate towards the zero-carbon #FutureFaster.
Fortunately, progress is already underway. Virtually all of the world’s major automakers have committed to electrify part or all of their fleet. For example in Europe, Volvo has committed to phase out all pure gasoline cars after 2019. In the Asia-Pacific region the state-owned Chinese auto group SAIC plans to invest more than 20 billion yuan ($2.9 billion) to develop 30 new models by 2020. While US majors GM and Ford both plan to drastically ramp up their fleet of available electric and hybrid models over the coming years.
The shift is reshaping the auto sector as the race to capture the growing electric vehicle (EV) market speeds up. For example, EV pioneer Tesla now boasts a bigger market cap than GM or Ford and is outselling luxury German models from BMW, Audi and Mercedes in the key market of the US. While other potential disruptors are springing up like Lucid Motors, also in the US, and the UK-headquartered producer of vacuum cleaners Dyson.
Taken all together, automakers have announced more than $150 billion in investments to achieve collective production targets of over 13 million EVs annually by around 2025, which is likely to make up over 10% of global light-duty vehicle sales.
This huge flow of investment is being met with increased customer demand, which is set to deliver exponential growth to the EV market.
A report from the International Energy Agency predicts that the global fleet of EVs is likely to more than triple to 13 million by the end of the decade from 3.7 million last year, with an average growth rate of 24% each year out to 2030. That would put the world on track for a global fleet of 127 million electric cars by 2030, according to the report.
However, the real marker of success is the share that EVs hold of the entire market for light cars. Certain countries, such as Japan and China, are seeing the share of EVs grow at such a rapid rate that the switch to 100% EVs could be complete well before the start of the 2030s. For example, the EV share in Japan virtually doubled from 0.59% in 2016 to 1.1% in 2017. If this near doubling of market share carried on, EVs would dominate the country’s auto market before the end of 2024. #DoTheExponentialMath
Thanks to this race to electrify light passenger vehicles, coupled with the huge growth in demand, several countries including the UK, France and Norway have committed to phasing out gas and diesel powered light passenger vehicles completely in the coming decades. China has signalled it will follow suit soon and India has a stated aim to have every vehicle sold in the country powered by electricity by 2030.
These bold policy signals are vital to encourage producers and consumers to invest, but more granular policies are also critical to accelerate the transition to zero-emission fleets. For example, Norway has some of the most ambitious policy measures in place – including free city parking and reduced road tax – resulting in the highest penetration of EVs per capita at roughly one third of the population.
“The uptake of electric vehicles is still largely driven by the policy environment,” the IEA said in recent report. “The 10 leading countries in electric vehicle adoption all have a range of policies in place to promote the uptake of electric cars.”
This call to action is being taken up by the 26 cities, states, and businesses that unveiled plans at the Global Climate Action Summit (GCAS) to deploy zero emission vehicle fleets, with the #ZEVChallenge, created by The Climate Group, C40 Cities and the Under2 Coalition.
They are leveraging collective purchasing power to demonstrate to automakers the growing demand for EVs, accelerate the switch to zero-carbon vehicles and create the required infrastructure at the speed and scale now needed.
Meanwhile, more than 20 multinational companies have committed to accelerate the rollout of EVs and charging infrastructure with the EV100 initiative, including Chinese search giant Baidu, the world’s leading mail and logistics company Deutsche Post DHL Group and fleet operator LeasePlan.
Deutsche Post DHL Group has committed to reduce logistics-related emissions to zero by the year 2050. As part of this effort, the company aims to operate 70% of its own first and last mile services with clean pick-up and delivery solutions, such as electric bicycles and vans by 2025.
LeasePlan – with 1.8 million vehicles on the road – is working toward net-zero emissions by 2030 and aiming to transition its employee fleet to 100% EVs by 2021. Auto components companies are taking climate action too, such as Michelin and Gestamp, which have both committed to set science-based targets to reduce emissions.
Along with the commitments of EV100 companies to deploy the charging infrastructure required, companies including ChargePoint and EVBox announced at GCAS a goal to create more than 3.5 million new charging points for electric vehicles by 2025.
However, it’s worth noting recent analysis by Transportation & Environment on the UK and European markets finds that 95% of all EV charging happens at home or work, with only 5% taking place along roads. The report concludes that “it is a lack of choice and availability of electric cars that is the principal barrier”. That barrier is set to be remedied by the wave of investment coming from the automakers.
Meanwhile, investment in the battery technology needed to keep all these EVs moving over ever greater distances is also speeding up. Just this month, GM announced it will invest $28 million to enhance its battery development and testing lab in Detroit as part of its shift to EVs. The search for more efficient batteries continues, with the likes of Dyson searching for a solid-state alternative to lithium-ion technology. And of course there’s the Tesla Gigafactory, which will be the largest battery factory in the world when up to full capacity.
The opportunities for EVs to act as a cornerstone technology, in combination with zero-carbon grids and zero-carbon buildings, are only now starting to be fully understood.
One illustration of this can been seen by Renault’s efforts to create ‘smart’ islands. The latest project is on Belle-Île-en-Mer, an island off the northwest coast of France. Once underway, residents will be able to drive EVs, charge them with solar power installed on the buildings, recycle old car batteries for storing renewable energy, while a digital control network will shift power to where it is needed.
While Enel subsidiary, EMotorWerks, is using its fleet of 10,000 connected chargers to bid into California’s wholesale power market – tapping the distributed storage capacity of cars to act as a giant battery that can deliver power to the grid.
This integration of zero-carbon fleets with zero-carbon grids and buildings will help to avoid the mistakes of the past – too much manure, too much pollution – while ensuring we’re not creating new ones further down the road. It will unlock innovation, grow new markets and help to build the zero-carbon #FutureFaster.
- Zero-carbon buildings are set to create the #FutureFaster
- Read how zero-carbon grids are set to power the #FutureFaster
- Join the conversation on Twitter and see how companies are helping to create the zero-carbon #FutureFaster
- Find out how your company can Take Action