A Bright Future for Electric Vehicles
Updated: Jul 16, 2020
With governments taking action to make electric cars more affordable & commonplace, we dive deeper into what the future looks like for electric cars in a handful of major markets around the world.
We have some news - or rather, the United Kingdom government has some: The UK’s Committee on Climate Change (CCC) has called for the ban on the sale of petrol and diesel cars to be brought forward by three years to 2032 ‘at the latest’. The coronavirus crisis presents global governments with a once-in-a lifetime opportunity to correct the course of greenhouse gas emissions and invest in a ‘green recovery’; part of which is reducing emissions from vehicles.
In the UK, as previously mentioned, the CCC recommended that the government push forward the ban on petrol and diesel cars to 2032, along with raising taxes on fossil fuels. Lord Deben, chairman of CCC, said the committee had based its new 2032 recommendation (it previously advocated ‘at least’ 2035), on “some very detailed work to show we can do it”, although he added he would ideally like an even earlier target of 2030.
Capture’s climate advisor, Jake Langmead-Jones, who has also been working with the CCC on advising the UK government on ‘green recovery’ measures, said the committee believes “it is feasible for electric vehicles (EVs) to be rolled out at the scale required to replace conventional vehicles. Consultation with industry experts resulted in general agreement that raw materials would not be a limiting constraint on the UK EV market, although it would need good policy to ensure an ethical supply chain is secured. Charging infrastructure will need to scale and this will require investment, but again this is achievable.”
But will this be enough?
Langmead-Jones says, “No single action is enough to mitigate climate change, although taking action on the emissions from vehicles is a big step. The committee noted in its 2020 Progress Report to Parliament that 24% of the UK’s emission in 2019 came from surface transport, the single highest emitting sector. Emission from cars and vans make up a big chunk of that number, so phasing out petrol and diesel vehicles is one of the most impactful measures the UK can take.”
Another country that is doubling down on increasing usage of electric vehicles is Germany, with the German government doubling existing subsidies to €6,000 ($6.7k) on electric vehicles that cost up to €40,000 ($45k). The total incentive increases to as much as €9,000 ($10k) when the existing contribution from manufacturers is included. Potential car buyers will also benefit from a temporary reduction in the country's sales tax to 16% from 19%.
The incentives are part of a sweeping €130 billion ($145 billion) package approved by the German government designed to help Europe's largest economy recover from the effects of the coronavirus pandemic. The subsidies for electric cars are expected to cost €2.2 billion ($2.5 billion), while carmakers and their suppliers will receive another €2 billion ($2.2 billion) to aid research and development. This comes at a good time for German carmakers, including Volkswagen, who are planning to manufacture and sell more electric cars. Volkswagen, which also owns Audi, Porsche, SEAT and Skoda, plans to spend €33 billion ($37 billion) on electric development by 2024, expanding into new business areas including charging infrastructure and battery production.
Next up is France. The French government has announced plans to offer some of the most generous incentives of any country to buy an electric vehicle. Buyers could be eligible to receive up to €12,000 ($13,150). "This is a historic plan to confront a historic situation," French President Emmanuel Macron said when he outlined the incentives as part of an €8 billion rescue plan for the country's auto industry.
France is setting aside more than €1.3 billion of the sum for incentives, which will bring down the price of a battery-electric vehicle by nearly 40% in some cases. For example, a Renault Zoe that costs €32,000 would be €20,000 under the most generous case, in which the owner of an older diesel car also receives a bonus of €5,000 for scrapping it, along with €7,000 toward buying a new electric vehicle.
Another strong contender in paving the way for a future with only electric cars is Norway, the world's unofficial leader in EV driving, where more than 40% of new cars sold are now electric (with thousands of drivers on waiting lists for the latest models). Last month, while the global economy was getting battered by the coronavirus crisis, fully electric cars accounted for just under 60% of Norway’s new car market, and plug-in hybrids just over 15% – meaning 3/4 of all new cars sold were either wholly or partly electric.
The government set a target in 2016, with full cross-party parliamentary support, of phasing out fossil-fuel based cars and light commercial vehicles by 2025, and they are certainly on course to succeeding. “It’s actually quite amazing how fast the mindset’s changed,” said Christina Bu of the Norwegian EV Electric Vehicle Association. “Even in 2013 or 2014, people were sceptical. Now, a majority of Norwegians will say: my next car will be electric.”
Global spending on electric vehicle (EV) purchases grew more than 70% in 2018 to US $82 billion. While this represented little more than 2.5% of the total light duty vehicle market last year, it does mean that US $36 billion was added to the global EV market in just one year – this carries EVs past freight ships in terms of market size for new orders, and represents more than double the investment in new biofuels production capacity worldwide.
We believe that Europe is going to lead global growth in electric-car sales next year, as governments across the region offer consumers ever-sweeter incentives. However, globally, sales of electric cars topped 2.1 million in 2019, surpassing 2018 (already a record year) to boost stock to 7.2 million electric cars. Electric cars, which accounted for 2.6% of global car sales and about 1% of global car stock in 2019, registered a 40% year-on-year increase.
Now it’s our turn to ask you a question… How does your country fare in investment in EV distribution? Are they doing enough? If you want to know more, the International Energy Agency created an excellent analysis on global EV distribution and government subsidies on EV.
Interested in finding out more about planet-friendly living? Check out our app Capture - we can help you calculate a monthly guideline CO2 allowance, based on recommendations from the Intergovernmental Panel on Climate Change, then balance emissions at the end of each month through verified nature-based offsets. Simply search 'carbon footprint and CO2 tracker' to find us in your app store.