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Are Electric Vehicles the Answer or Just New Packaging?

SolarInstitute for
Energy Research

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Electric vehicles are interesting, but do consumers want them, are they affordable and are they anything more than a new way to package the same fuels?

Globally, the number of electric vehicles on the road in 2016 was 2 million, according to the International Energy Agency (IEA). China, Europe and the United States make up the three main markets, totaling more than 90 percent of all electric vehicles sold. China alone accounted for over 40 percent of the electric vehicles sold in 2016—and more than twice the volume sold in the United States—due to its lucrative subsidies and large population. Is this the future?

electric vehicles

In Europe, Norway had the highest share of the electric vehicle market at 29 percent, followed by the Netherlands with 6.4 percent and Sweden with 3.4 percent. Electric vehicles still made up only 0.2 percent of passenger light-duty vehicles on the roads of the world in 2016. According to the IEA, in order to limit temperature increases to below 2°C by the end of the century, the number of electric cars will need to reach 600 million by 2040—a factor increase of 300.

electric vehicles

European countries are calling for a ban on the sale of combustion-engine vehicles—Norway by 2025 and France and Britain by 2040. However, while these countries have touted the bans, they have not yet legislated them. Unless the majority of their consumers prefer electric vehicles in the future, it is unlikely that they will implement these laws because subsidizing them is expensive.

For electric vehicles to claim that much market share, they need to at least match the driving range of combustion vehicles, and their refueling time needs to be greatly reduced to nearly mimic the time it takes to refuel a combustion-engine vehicle.

Further, a huge increase in electric vehicles would require many thousands of new charging stations, an upgrade in generating capacity, improved batteries and new sources of government income to replace lucrative fuel taxes that European governments receive from purchases of gasoline and diesel.

Bans on Combustion-Engine Vehicles

Norway, which has the highest penetration of electric cars in the world, has a target of only allowing sales of 100 percent electric or plug-in hybrid cars by 2025. About 40 percent of all cars sold in Norway last year were electric or hybrid vehicles due to its substantive package of incentives, which includes exemptions or reductions in taxes, no charges on toll roads or ferries, free municipal parking and access to bus lanes. Norway’s vast hydroelectric power system provides the majority of electricity for charging its electric vehicles.

Because France gets most of its electricity from nuclear power, it sees a ban in 2040 on gasoline and diesel vehicles as a way for the country to meet its commitments to the Paris accord. Britain’s new clean air strategy has sales of new gasoline and diesel cars and vans ending by 2040 and is making 255 million pounds ($332 million) available for local governments to take short-term actions like retrofitting buses.

Besides Norway, France and the UK, Austria, China, Denmark, Germany, Ireland, Japan, the Netherlands, Portugal, Korea and Spain have targets for electric car sales and some are considering banning gasoline and diesel vehicles. The Netherlands has a motion to ban diesel and gasoline cars by 2025. India is considering no longer selling gasoline or diesel cars by 2030.

Auto Manufacturers Are Supporting the Electric Vehicle Market

Auto manufacturers are taking the electric vehicle market seriously. Volvo has announced plans to go all electric. The company’s long-term plan is to transition to three fully electric cars between 2019 and 2021, although sales of older pre-2019 gasoline vehicles could extend out to 2025. Volvo, which is owned by China’s Geely, plans to sell 1 million electric or hybrid cars globally by 2025. It is the only major automaker other than Tesla to make the 100 percent commitment to electric vehicles.

Toyota has a goal for all of its vehicles to be zero emission by 2050 and has favored electric vehicles for short-distance commuting. The company is in the production engineering stage of building a solid-state battery that will improve on the weight and range of the lithium-ion battery and possibly on the charging time.

Because it takes 4 to 5 years to design and develop a new car, many automakers began planning for electric vehicles in 2014 to debut by 2019, upping the model availability by almost a factor of three in the five-year period. By 2022, some 143 models of electric vehicles are expected to compete with combustion-engine vehicles.

electric vehicles

Companies Upping Their Electric Vehicle Forecast

The IEA more than doubled its forecast for electric vehicles, increasing it to 58 million in 2030 from 23 million.

Oil producing companies have also increased their electric vehicle forecasts. Exxon Mobil expects electric vehicles to reach about 100 million in 2040 from a previous forecast of about 65 million. BP expects 100 million electric vehicles on the road by 2035—a 40 percent increase compared with a year ago.

The Organization of Petroleum Exporting Countries (OPEC) increased its forecast for sales of plug-in electric vehicles by more than a factor of five. OPEC raised its electric vehicle forecast to 266 million in 2040 from 46 million in last year’s forecast. (See graph below.) Electric vehicles are expected to account for 12 percent of the market within 23 years in OPEC’s new projection, compared to 2 percent in the prior year’s forecast. OPEC expects half the number of diesel vehicles in this year’s forecast, compared to last year’s forecast.

electric vehicles

Bloomberg New Energy Finance expects electric cars to outsell gasoline and diesel models by 2040 based on a projected rapid decline in the cost of lithium-ion battery units. It expects 530 million plug-in cars on the road by 2040—about a third of the total number of cars worldwide. It also expects those cars to reduce oil demand by 8 million barrels by 2040. According to the agency, the world’s top automakers have a combined plan to sell 6 million electric vehicles a year by 2025, increasing to 8 million in 2030.

Consumers Will Decide the Fate of Electric Vehicles

Despite what these forecasters project, consumers will determine the future market for electric vehicles. If consumers find that electric vehicles are too costly, that they need recharging too frequently or that they are inconvenient due to a dearth of charging stations, they may decide that gasoline and diesel vehicles are a better buy.

Electric vehicles still have range limitations, which can be more restrictive than manufacturers’ estimates. Because recharging stations are still too few to be available when needed, drivers must plan their trips around charging opportunities. Due to these factors, no more than 10 percent of consumers who consider purchasing an electric vehicle actually buy one.

If these forecasts are generally in the ballpark, there are still the long-term issues of whether the charging infrastructure will keep up with the number of vehicles and whether electric grids will be able to handle the additional demand. Further, if the mix of technologies in the generating sector does not change to zero emission technologies in concert with the growth in electric vehicles, the change will be for naught because the electricity that fuels the vehicles will be generated from technologies that emit carbon dioxide.

Conclusion

Consumers must be convinced that the combustion era is ending and electric is taking over for the bans on combustion vehicles to be effective. Otherwise, habits are unlikely to change. While financial incentives can help bring electric-vehicle prices closer to those of traditional vehicles, they are not enough for consumers to forfeit their traditional vehicles, given the limited driving range and lengthy charging time of electric vehicles.

Editor’s Note: Putting aside the subsidies, especially to companies such as Tesla that only survive due to them, which I adamantly oppose, electric vehicles increasingly mean natural gas vehicles by another name in this country. More and more of our electricity is made with natural gas and when electric vehicles drive-in for a recharge in the Northeast they are essentially filling up with natural gas extracted from the Marcellus Shale using a combination of horizontal drilling and hydraulic fracturing, two old concepts miraculously combined to foster the shale revolution. It’s all in the packaging!

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11 thoughts on “Are Electric Vehicles the Answer or Just New Packaging?

  1. Again:
    The Cycle of Energy to use an electric car if natural gas is the fuel for generating the electricity:
    Chemical Energy to Mechanical Energy to Electric Energy to Mechanical Energy plus line loss of electricity in transmission.

    The Cycle of Energy to use a Natural Gas fueled vehicle:
    Chemical Energy to Mechanical Energy.

    No coal because of pollution and strip mining.
    No nuclear because of Three Mile Island and Chernobyl and the waste disposal issue.
    No Hydro because it ruins the fisheries, the valleys that are filled, and destroys habitats.
    Wind and solar don’t work 24/7.
    Natural Gas (methane) is a normal and natural constituent of this planet and many other ones.

    Natural Gas cars are more efficient and have a lesser global warming impact if one looks at the whole story.
    Unless the electric car has a solar panel on its roof or a giant pinwheel, they are less efficient than a natural gas vehicle. (Remembering of course that this comment began with the postulation that natural gas will be used to produce the base load electricity for the electric cars. And it is no argument that we will import electricity from Canada, for that only shifts the environmental damage to the First Nations. Where is the environmental social justice in that?)

  2. Good article.

    I’d be willing to bet that 3/4 of electric car buyers think their purchase is entirely “green”. Not even close…

    Electric propulsion is superior and simpler, but manufacturers have still made these cars very expensive.

    The battery tech is still lagging and in Tesla’s case comprises some 7000 individual 18650 cells/car.

    Combine this with range anxiety, 1/2 hour supercharge time and the massive infrastructure build out required to make EV’s the norm. There is no free lunch.

    Can’t even happen without vast new natural gas turbine generating capacity – since “environmentalists” (NIMBY posers) are anti nuke and are dreaming re solar and wind…

  3. Unless electric generation via non-fossil fuel sources really steps up, there is another issue. Opposition to new generating facilities fueled by natural gas and opposition to natural gas production and transportation will limit the availability of sufficient electrical power for charging EVs.

  4. Ken makes an interesting point. Does this article even mention natural gas? Natural gas isn’t diesel is it?

    Why didn’t IER write about natural gas use in transportation? Like with ships for example? Is the use of LNG as a shipping fuel something that is likely to happen?

  5. https://www.vox.com/energy-and-environment/2017/8/11/15943200/al-gore-still-has-faith

    By the way an Erik McGregor picture made it’s saying this fascinating article on Al gore and his daughter. Seems like it’s a shame that people who actually sit down and speak with people like Al gore and his daughter karenna aren’t up to date really on some important things about what Ms gore says and does and who she is associated with and gets her information from.

  6. A Tweet appeared on my Twitter news feed today that put forth the question what happens when emergency vehicles, powered by electricity, are needed when a disaster knocks out the electric grid for a long period of time ?? How would they be recharged then ??

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  8. Based on the second law of thermodynamics: says that energy is neither created nor destroyed, it just changes forms, energy for vehicles will come from fossil fuels directly [Natural Gas, gasoline] or indirectly from electrical generating stations using Natural Gas and some coal – In USA, Teslas can be purchased for $35-75K with solar-powered homeowner recharge station for about $5500 after tax deduction subsidy – Richard W Goodwin West Palm Beach FL 8/13/17

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