Analysis & Synthesis

The Economist recently ran an extensive, special report on the state of electric vehicles touching on issues ranging from technological development to market conditions, as well as those concerning legislative pressures and climate requirements. The Economist’s reporting provides a detailed overview of the state of the industry from a variety of key perspectives and, as such, proves a comprehensive summation of the industry’s progress thus far.

Legislative pressures

The Economist’s report provides an extensive overview of the efforts of the world’s major governments in their various campaigns to ensure the environmental sustainability of our societies. The four most significant governmental institutions in this respect are, according the article, the United States, China, the European Union, and Japan. The governments of these four regions have displayed a remarkably consistent resolve in their efforts to pressure car makers into reducing CO2 emissions rates despite a slow start which has noticeably weakened the resolve of even the world’s most well established and profitable car companies.

The above mentioned four governments have all consistently tighten legislative restrictions on new vehicles, introducing new standards which automakers must meet at roughly five year intervals. The European Union leading the way, relative to its current emission rates; the “Euro 6” standards set for 2014 are set to enforce strict new requirements on a variety of greenhouse emissions which would have been inconceivable when the authorities began setting regulations over a decade ago. With average CO2 set to fall “130g per km now to 95g per km in 2020” and governments already planning further reductions by 2025, with predictions suggesting limits as low as 70g, car makers are left with little choice but to continue investing in low-carbon technology and production, despite the currently anemic market trends.

Technological development

Despite the legislative and environmental realities facing automakers, current market trends and consumer surveys have seemingly led many of the industry’s major influencers to taper expectations for the future of electric vehicles, at least in the immediate future. The Economist suggests despite the much publicized cost efficiency of operating an electric vehicle, the current cost of an electric vehicle nonetheless still outweighs the potential savings. As such, the Nissan Leaf, a vehicle often touted as the savior of the mass market electric vehicle industry, failed to sell anywhere near its maximum capacity of roughly 150,000 cars a year, selling  less than half of its modest 20,000 initial target for American markets. Even industry experts cast a harsh light on the reality of electric vehicle adoption at present, suggesting that the most practical use remains “short and predictable commutes or school runs” or for businesses “Light delivery vans are another potentially strong market.”

The prevailing trend in technological development among major automakers has been in alternative powertrain research, with automakers exploring the efficiency of a variety of different solutions in an effort to find one which would provide an easier route to emissions reduction. However, it would appear that none of the solutions on the horizon at present offer a clear advantage over advancing traditional petrol and diesel engines, due in large part to the prohibitive cost of many of these alternatives. Next in line are the hybrid engines which have seen considerable support over the last decade, the market leading Toyota Prius selling as many as 1.2 million units worldwide in 2012, among both environmentally conscious drivers as well as automakers. Interviews with automotive insiders also suggest that this preference is unlikely to shift too drastically in the near future, with a senior engineer at GM indicating that the company is unlikely to transition its Volt hybrid to pure electric operation, preferring instead the relative stability of hybrid sales and thus choosing to reduce battery size and therefore price, while offering the same range estimate.

However, some companies remain optimistically inclined, exploring such far off technological potentials as a fuel cell solution which would create electric and water out of hydrogen gas or others which utilize compressed or liquefied natural gases. Despite this willingness to explore future technological possibilities, the ultimate responsibility does not lie in the hands of automakers alone. The article also addresses the infrastructural demands for sustainability in traffic systems, a responsibility which falls to public authorities and energy companies.

With estimates suggesting that new CNG (Compressed Natural Gas) cars, which boast production costs that rival those of traditional diesel vehicles, could achieve effective CO2 rates as low as 30g per km, local authorities are given considerable incentive to establish the infrastructural requirements necessary to produce the biomethane necessary to run these vehicles. However, many respected industry insiders continue to believe in the potential of pure electric vehicles, despite their rough start, arguing that even the world’s most efficient fuel technologies would none the less be best put to use in producing the electricity necessary to power the sheer simplicity of pure EVs.

In the meantime, however, the commuter landscape will remain a patchwork of outdated technologies, current trends and future potentials in which the choice is ultimately left up to each individual motorist. Therefore, the current surge in automotive industry related innovation, signified by a notable rise in patent filings between 2006 and 2011, is likely to continue for the foreseeable future.

Source: The Economist

Read More: The Economist's full coverage

 

Norway’s four electric cars for every 1,000 passenger cars puts it well ahead of the United States, where electric vehicle sales account for a mere 0.6% of all vehicles sold (through November 2012) and even other similar European countries such as Sweden (0.13%). What can other European countries learn from Norway’s exemplary efforts to help its citizens enter a future of sustainable transportation?

Norway’s success relies largely on a wide scale combination of measures which have been individually commonly acknowledged as essential to successful EV build-up. These measures include both incentivizing measures as well as those which discourage the purchase of traditional, gas-fueled vehicles, an approach which, yet again, is hardly news to government authorities wrestling with their own EV plans. In addition to the usual tax incentives and purchase subsidies and discouraging measures, such as increased gas-taxes, Norway has also introduced other incentivizing measures, including an exemption from import taxes, leading to a marked sales increase for the Nissan Leaf, and priority access to bus-lanes in Oslo and free parking in city owned spaces.

Another country making significant strides towards expanding EV ownership is Estonia. Estonian EV sales rates continue to trail those of world leading Norway, but the country is making significant strides with a rate of 1 EV for every 1,000 passenger cars. Hoping to further drive EV adoption, Estonia’s government has recently increased its efforts to raise consumer interest in EVs and hybrids. A new subsidy plan offers from €3,000 to €12,000 per EV, depending on the battery type. The new plan comes in addition to an existing EV subsidy plan offering a maximum of €18,000 as well as another €1,000 towards the purchase of home charging equipment.  Furthermore, the country has also supported this development through an ambitious infrastructure build-up program. As a result, there are now 144 chargers available in Estonia, upon completion the country’s network will include a total of 163 chargers and charging will be free until end of January 2013.

These forward-thinking and aggressive plans from other near-by countries should encourage others in the region to reconsider the effectiveness of their own programs and take these lessons to heart in developing equivalent measures of their own.

Read more: Information on Norway’s forward-thinking EV program

Information on Estonia’s EV programs

Finnish EV adoption rates and car sales figures from Statistics Finland

While electric vehicles free transportation from its most immediate reliance on fossil fuels, a new study finds that these cars are far from zero-carbon. The study, conducted by the Norwegian University of Science and Technology, has found that, despite, operating on pure electricity, the greenhouse gas emissions produced by electric vehicles remain shockingly high. As a result of a combination of factors, the recent study finds that EVs may, in fact, prove more harmful to the environment in some areas of the world than traditional, gas-fueled vehicles.

Perhaps the most damaging of the study’s findings was that the production and manufacturing of electric vehicles produces, on the whole, more greenhouse gas emissions than do traditional, gas-fueled vehicles. While significant, the issue of the greater environmental burden imposed by electric vehicles, this factor is ultimately of less significance when one considers the future potential they hold. For while electric vehicles may indeed be more emissions heavy at the moment, these emissions will be significantly reduced by the ongoing popularization of electric vehicles as components and equipment become available in greater quantities and, consequently, move closer to production centers. Furthermore, as greater numbers of drivers buy electric vehicles they will create a new market for used electric vehicles, thereby increasing the life span of each individual vehicle and decreasing its individual impact, a reasonable assumption given the high sales of pre-owned cars.

Alongside this finding, the Norwegian study also determined that the ultimate environmental impact of an electric vehicle depends on the energy structure in the driver’s region. The study’s authors found that the overall “well-to-wheel” environmental impact, or the combined emissions produced throughout the production of the electricity required to fuel EVs through to the operation of an EV, of electric vehicles is, in fact, higher than those of traditional gas powered vehicles in areas with a fossil-fuel heavy energy structure. While dispiriting, these findings are not altogether damning. Given the carbon-intensity reduction programs currently underway in numerous countries across the world, efforts which will eventually lead to low or zero-carbon energy production processes, electric vehicles continue to hold far more promise than do traditional vehicles; as gas-fueled cars will always produce a certain base level of emissions regardless of advances made to this technology.

Finally, rather than discouraging the spirits of those concerned with the fate of our environment, these results should lend hope for the future and our ability to eventually cut emissions to zero. Achieving this result will rely equally heavily on realizing the ambitious targets set forth by world governments for the development of the low-carbon cities of the future, as on perfecting EV technology.

Source: Report by the BBC

Read more: Discussion with one of the study’s authors at the Guardian’s Eco Audit blog

The Norwegian University of Science and Technology study

While initially hesitant in committing to renewable energy, many of the world’s biggest chain stores have become leading examples of any company’s potential to change its energy approach. As the number of individual solar electric systems currently installed in the U.S. reaches 24,000, nonresidential systems contributed a total of 3,600 new installations in the first half of 2012 alone. Utilities naturally continue to lead the charge in their overall number of installations; however, the future development of the solar industry and the potential for widespread adoption relies on the contribution of actors outside of the traditional utility market.

Green products and sustainability has become a major focus of advertising for most major retailers. As of late, however, major retail chains have also begun to see the benefits in transitioning to renewable energy in their operations. Such corporate giants as Walmart, Costco, and Ikea are leading this charge among the world’s major retailers. These retailers are contributing to the growth of the solar industry in their enthusiastic installation of solar energy systems at their retail outlets, with the flat roofs of the ‘big box’ stores serving as ideal sites for installing a large array of solar panels.

This trend among major chain retailers has only recently begun to gather steam as a result of the once prohibitively high costs of solar installations. However, recent years have seen the decline of these prices at an encouraging pace, which has consequently helped encourage big chain retailers to explore the cost-cutting potential of renewable energy. This trend towards commercial installations is also apparent in the European solar market, where recent industry surveys suggest that commercial installations will continue to drive the market for the foreseeable future.

In the European market, which is considerably more advanced than that of the United States boasting a total installed production capacity of 51,680 MW in 2011 as compared to the US’s 2012 figure of 5,161 MW and German (24,678 MW in 2011) and Italian (12,574 MW in 2011) installations alone amounting to well over 30,000 MW, commercial rooftop installations represent a very large share (well over 60% of installations in the UK, the Netherlands, Austria, and Belgium). The overwhelming prevalence of commercial installations in these European markets is a strong indication of the private sector’s significance in driving the transition towards renewable energy in the future.

While the private sector is undoubtedly a major contributor to the growth of the solar industry, the impact of public policy and guidance cannot be discounted. Industry analysts continue to note the significance of energy subsidy policies; such as those instituted by several European countries in response to the EU’s renewable energy targets for 2020. As such it is imperative that these two forces continue to work in conjunction with each other in building up the solar industries across the world in order to, one day, reach the shared goal of replacing fossil fuels with renewable energy altogether.

Source: NY Times article

Read more: Solar Energy Industries Association report on commercial adoption

Solar Energy Industries Association solar industry overview for the second quarter of 2012

European Photovoltaic Industry Association’s market overview and outlook report

Industry analyst comments on the significance of EU energy policy at EUobserver.com

Several Chinese cities are spearheading a slowly building movement among the country’s decision makers which could serve as a significant step towards achieving the ambitious national emissions targets for the coming years.  The Chinese government has set a goal of reducing CO2 intensity levels, including energy consumption and industrial activity accounting for all the savings accrued through reductions made in processes and energy consumption, by 40-45%, from 2005 levels, by the year 2020, with an additional intermediate target set out in the 12th 5 year plan of 17% by 2015.

According to recent estimates by the International Energy Agency (IEA) China has managed to reduce this level by 15% since 2005.  However, the IEA’s assessment also revealed that a majority of those reductions came between 2005 and 2008, in the last three years Chinese emissions have remained relatively stable. While the state government has acknowledged the need to make these reductions and taken numerous steps to establish supportive programs and new legislative efforts, reaching the country’s targeted reductions by 2020 will require significant, municipal and local level action regarding many of the policies and approaches proposed by the country’s ministries in coming years.

As such, the recent programs initiated by municipal level governments serve as far more promising signs of actual progress than earlier state policies, such as efforts to close down inefficient factories and power plants and directing ever increasing amounts of money towards energy conservation and emission reductions. Among these recent developments are a series of new measures initiated by the Guangzhou municipal government aimed at halving the number of cars on its streets. The municipal government of Guangzhou, China’s third-largest city, has introduced a system of license plate auctions and lotteries which has been described as among the most restrictive move yet made by a Chinese city in pursuit of these reductions targets. In introducing these restrictive policies, which place long-term environmental issues ahead of short-term economic growth in a strikingly overt fashion, the major metropolis sets a bold example for China’s other heavy polluters and smaller municipalities to follow. Alongside these most recent efforts to cut down on the amount of private vehicles on its streets, the city has also taken an important step towards encouraging mass-commuting in its construction of a subway system.

Among those cities also making strides towards reducing transport-sector emissions, albeit not in as drastic a fashion as Guangzhou, are Nanjing and Hangzhou, which have put in place new policies requiring cleaner gas and diesel vehicles, or Xi’an and Urumqi which have both moved to ban cars built prior to the introduction of stricter emissions legislation in 2005.  These vehicle targeted efforts are joined by those in cities such as Dongguan, Shenzhen, Wuxi, Suzhou, and Beijing, all of which have taken some steps towards shutting down factories causing heavy pollution.

These recent programs are the first true signs of budding potential among China’s cities to make any realistic progress towards reaching the goals set out by a state government which, ultimately, has little effect on the practical measures required to reach those goals.

Source: NY Times article on new legislation

Read more: NY Times article on rising emissions in 2011

Reuters article on rising emissions in 2011

Assessment of China’s targets from Climate Action Tracker

IEA assessment of China’s success until now

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