image: Danilo Rizzuti / freedigitialphotos.net
The Toyota Prius, which was released in 1997 was the catalyst for a small green consumer segment around the globe for hybrid technology, creating and spurring the hybrid niche trajectory. Hybrid-electric vehicles (HEVs) have experienced a significant rate of growth in the last 10 years. We now not only have available HEVs but also battery powered electric vehicles (BPEV) which together, represent opposite ends of an electric vehicle (EV) spectrum. The HEV uses an internal combustion engine (ICE) exclusively to power the electric motor, the BPEV uses a battery.
A series drivetrain plug-in hybrid-electric vehicle (PHEV) represents a vehicle somewhere towards the middle of this spectrum. It uses a battery for short range driving, and switches to ICE-generated electricity when the battery is depleted. This transformation in technology is regarded as a considerable tipping of the technological scales in the context of an automotive sector which is typically averse to radical change in the technology of car engines.
This inflexibility can only be highlighted by the dominance of the internal combustion engine over the last 100 years. But what are the reasons for this inflexibility and what is obstructing the revolution against petrol power and the embrace of the electric motor in its various configurations?
Below I put forward that there are three main factors affecting this shift: demand, environmental impact, and political motivation.
Demand
The first and probably the most obvious factor is that of demand. Analysts are quick to point out that market trajectories need to surpass a critical size in order for the electric engine to be economically viable. PSA Peugeot Citroën was the first carmaker to introduce electric vehicles in Europe starting in late 2010, with the Peugeot iOn and the Citroën C-ZERO, but it was unable to reach a critical size for its electric vehicle activities, despite considerable investments and support from local and national governments. The vehicles were broadly regarded as relatively expensive and impractical. First year sales of hybrid electric vehicles (HEV) were to the order of 10 times higher than first year sales of BPEVs (about 15,000 vehicles versus about 1,500).
Hybrids were appreciated for high fuel economy, which boasted comparable practicality to their ICE counterparts and benefitted from the positive social connotation. Analysts hypothesise that somewhere in between these two values may be where the critical size for a market niche on the automobile market lies.
A well-known commentator on electric vehicles, Theo Lieven, conducted a study of 1,152 German individuals which aimed to disseminate the factors affecting a potential car-buyers’ likelihood of purchasing an EV vehicle on a range of vehicle categories. He found that of 1,152 participants, 5% represented potential EV buyers, with the main factor affecting this difference being the fact that their prioritising of price and performance range was lower than non-EV potential buyers, and therefore their barriers in terms of demand were lower.
Some analyst (such as Oscar Van Vilet et. Al) point out that the total cost of ownership (TCO) of current EVs are uncompetitive with regular cars and series hybrid cars by more than €800 (£694) per year. The group anticipate that TCO of future PHEVs may become competitive when batteries cost €400 (£347) per kWh, even without tax incentives, as long as one battery pack can last for the lifespan of the vehicle.
However, TCO of future battery powered cars is estimated to be at least 25% higher than that of hybrid or regular cars. This cost gap remains unless cost of batteries drops to €150 (£130) per kWh in the future.
Moreover, complete EV’s require a considerable change in consumerist behaviour. Whereas you can buy an HEV such as a Toyota Prius or a Cheverolet Volt and almost completely avoid changing your driving behaviour, complete EVs require a considerable transformation. The longest range EVs on the market now, such as the recently released Tesla Model S, can go up to 300 miles on a single charge, but still cost more than €51,000 (£45,000). The Nissan LEAF, which costs about €22,100 (£19,200) can travel less than 100 miles on a single charge, and the slightly more expensive Ford Focus Electric can travel a similar distance. Tesla’s Model S will yield about 60 miles of range per hour of charging with the best home plug-in systems, and even the LEAF’s smaller battery takes around an hour to charge. Evidently, if convenience is your bag, current EV battery technology is not quite cutting the mustard.
Environmental impact
The second factor that I would like to expound is the effect of EVs on the environment and electricity demands. There seems to be a consensus amongst the academic community that a high proportion of EVs may be possible in the future, based on the capacity of today’s electricity grids. Adolfo Perujo and Biagio Ciuffo (2010) conducted a study of the potential effects of a large scale introduction of EV’s in the private car fleet on the electric supply system and the environment in the province of Milan, Italy. The study was projected for a future date of 2030 using Milan’s current electricity producing capabilities whilst a number of possible EV market trends were considered.
The results showed that even with a very high future market penetration (20-25% by 2030), the impact of the vehicles on annual energy consumption was negligible, although without appropriate regulation (i.e. intelligent integration, preventing overuse of electricity at a given time) there could be a serious impact on power request.
Perujo and Ciuffo also claim significant reductions in CO2 emissions deriving from a large scale introduction of EVs, though these are only significant within the higher estimates of EVs as a percentage of future fleets and are commensurate with the proportion of renewable and environmentally friendly energy used in a given grid.
Oscar van Vliet et al. (2011) examined efficiency and costs of current and future EVs, as well as the impact from charging EVs on electricity demand and infrastructure for generation and distribution, and thereby on GHG emissions in the Netherlands. The results of their study bore a number of similarities with the findings of Perujo and Ciuffo. They projected that uncoordinated charging would increase national peak load by 7% and household peak load by 54% respectively, at a 30% EV penetration rate in the vehicle market, which may exceed the capacity of existing electricity infrastructure. However, they anticipate that at a 30% penetration of EVs, off-peak charging would result in a 20% higher, more stable base load with no additional peak load at the national level and only up to a 7% higher peak load at the household level.
Therefore, they maintain that if off-peak charging is successfully introduced, electric driving need not require additional generation capacity, even in case of a 100% switch to electric vehicles. This projection is a lofty claim, and will depend highly upon a number of factors, including the efficiency of the technology available to BPEVs and PHEVs, the success of peak use regulation in the future, as well as the decarbonisation of the electric grid and movement into renewable electricity.
Political motivation
This brings me to my third and arguably most important point of enquiry: The political motivations and dynamics at play with regards to the adoption of EVs. Julia Hildermeier and Axel Villareal (2011) have examined the political factors of influence in the French and German EV markets. I will apply most focus on the dynamics at play in France, since investment there has been more forthcoming.
Former French president Nicolas Sarkozy in October 2008 at the“Mondial de l’automobile”announced the setting up of a major plan on“véhicules décarbonés”(decarboned vehicles), the president’s speech aimed to promote all clean technologies in automobiles – that is, BEVs, HEVs, and alternative fuels vehicles. Just after the president’s speech and in the middle of the global economic crisis in January 2009, the“Etats Généraux de l’Industrie”(a group of all French industrial actors) was organised in order to create a broad and coherent industrial policy for France.
During this process, financial assistance was decided upon and €3.5 billion was allocated to carmakers, mainly Renault and PSA who each received €1.5 billion. In return, the two manufacturers committed to invest in R&D and to preserve employment and production in France. The aim was to protect the French industry from delocalisation and to modernise the national sector to ensure the competitiveness and the dynamism of factories. The low carbon vehicles plan implemented in October 2009 was designed to promote the re-localisation of production and the creation of a new sector based on electric technology in acknowledgement of Sarkozy’s support of clean automobile technology. To that end, the government agreed to finance a part of the conversion of the factory in Flins (near Paris) to produce the ZOE, Renault’s future main electric car, whose manufacture is supposed to employ new qualified workers.
In addition, the plan proposed fourteen actions to ensure the fast development of electric battery and hybrid vehicles to attain the conversion of 5% of the current French motor vehicle fleet by 2020, that is about two million vehicles. It should be noted that France was already in a strong position to embrace EV’s from an environmental perspective, since its grid was largely comprised of nuclear facilities, which produce no GHGs.
By comparison, Germany, the country home to some of Europe’s biggest car companies (Volkswagen, BMW, Daimler) has aimed at only half the number of EV’s by 2020 (1 million) even though it collectively produces over twice as many cars as France annually. This could reasonably be viewed as a conservative aim borne out of the fact that Germany’s electric grid is still predominantly powered by coal. It should also be noted that as Hildermeier and Villareal point out, employment effects were not at the centre of the German electric car debate, which may have contributed to the more cautious and incremental investment commitment made in Germany.
In France, the plan, implemented by the Departments of Industry and Environment, set up five main levers that were supposed to create demand and supply at the same time. To create demand, a purchasing bonus of €5,000 for the 100,000 first buyers of vehicles emitting less than 60g CO2/km was introduced and a collective purchase agreement of 100,000 BEVs by an industrial buyer group led by La Poste (the French postal service) was promoted.
The demand side of the plan focused mainly on the BEV because of its relative marginality in the market, but the three other levers concern the normalisation and the regulation around charging standards and infrastructure, subsidies for research and development, and investments in charging infrastructures. This process involved numerous actors: civil society (associations), public and political institutions (ministries, local governments, etc.), carmakers, suppliers, mobility operators, electricity providers, and large para-governmental enterprises such as the French mail company La Poste and others like Areva and Vinci.
As we can see, there were a great range of factors which inspired a French surge of support for EVs. These included a relatively competent and emissions friendly electricity supply. It can also be argued that without the combined catalysts of economic down turn and a need to bolster the automotive sector and secure jobs the French government’s investment in EV’s may not have been so forthcoming.
It should also be noted that it was not only direct governmental intervention that mobilised the new embrace of EVs, but that of a whole range of actors which I have mentioned above. Furthermore, the success of the investment remains to be seen. Between January 2010 and December 2012, 14,600 highway capable all-electric vehicles were registered in France.
This figure, though promising, would have to increase exponentially over the remaining two year increments leading up to 2020 in order to reach the goal of two million EVs in use within the French private fleet.
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