Electric vehicles: are they a passing fad, or here to stay?

Copyright: IEA/OECD

IEA transport expert looks at the status quo, and predictions for the years ahead.

2 May 2011

Over the past few years, electric vehicles (Evs) have seeped into public consciousness. Those promoting Evs bill them as essential for reducing dependence on oil and slashing the world’s CO2 emissions. But is that really the case? Or will they only play a token effort in improving energy security and winning the battle against global warming?

Lewis Fulton, a transport expert at the International Energy Agency (IEA), explains the benefits of Evs and the possible role they will play in the future.

What are the different types of electric vehicle?
There are three main types, all of which fall under the IEA’s term ‘advanced vehicles’:

  • Electric vehicle (EV).Typically refers to a plug-in, battery electric vehicle. It is sometimes also termed ‘battery electric vehicle’. Evs do not have an internal combustion engine.
  • Plug-in hybrid electric vehicle (PHEV).PHEVs contain both an internalcombustion engine and a motor with battery pack. In contrast, a regular hybrid vehicle does not have enough battery storage on board to be worthwhile adding a plug-in capability. PHEVs tend to have a shorter electric-driving range than Evs, but conversely have the benefit of a back-up internal combustion engine should the battery get drained.
  • Fuel cell models. These vehicles convert hydrogen into electricity using a fuel cell system. Hydrogen is typically stored on-board the vehicle for conversion, so these need not be plug-in vehicles. However, it appears likely that plug-in hybrid type fuel cell vehicles – with batteries and a fuel cell system instead of an internal combustion engine – may be an optimal configuration, and thus they would be plug-in vehicles.

How many EV models are there?
Around 30 road-certified Electric Vehicle (EV) models were available in various countries at the end of 2010. At least 40 additional models are expected to be introduced in 2011 and 40 more in 2012.

Is there public appetite for all these models?
It is too soon to gauge the level of demand for these vehicles, but high profile models such as the Chevy Volt and Nissan Leaf have experienced heavy demand in recent months, with waiting lists to purchase them in a number of countries. Business fleets around the world have announced commitments to purchase Evs that amount to hundreds of thousands of vehicles in the coming years. Government targets around the world reach over 1 million vehicle sales by 2015, and 7 million by 2020.

Why all this interest in electric vehicles?
Key drivers include rising oil prices, increased concerns regarding energy security (the uninterrupted availability of energy sources at an affordable price), and repeated warnings from scientists on the need to cut CO2 emissions. For example, the United Nations Intergovernmental Panel on Climate Change (IPCC) states that reductions of at least 50% in global CO2 emissions compared to 2000s levels will need to be achieved by 2050 to limit the long-term global average temperature rise to between 2 and 2.4ºC.

In its publication Energy Technology Perspectives 2010, the IEA developed a target-oriented scenario, ‘BLUE Map’, which outlines pathways to reach a target of halving global energy-related CO2 emissions by 2050 (compared with 2005 levels) and examines the least cost means of achieving the goals through the deployment of existing and new low-carbon technologies. In this scenario, transport accounts for 23% of the required reductions. In order to decarbonising the transport sector, there is a need for strong efficiency improvements, introduction of very low carbon fuels, and other changes, such as modal shifts.  One key element is the introduction of electric vehicles. The annual sales targets outlined in this scenario are:
2020 – 7 million Evs (e.g. 70 models selling 100,000 each).
2030 – 30 million Evs (e.g. 150 models selling 200,000 each).
2050 – 100 million Evs (e.g. 400 models selling 250,000 each).

Are these targets likely to be met?
The overall BLUE Map targets and the particular targets for Evs will be very challenging to meet. The seven million sales target for EV and PHEV sales in 2020 happens to align with government targets, so at least there is a clear global commitment to achieving this target over the next 10 years. But it will require heavy investments in recharging infrastructure, policies to promote electric vehicles and make them cost competitive, and information programmes to help consumers understand these new technologies and their benefits.

What are the key challenges?
Currently Evs are more expensive, harder to refuel, and have lower range than conventional internal combustion engine vehicles. Plug-in hybrids have fewer obvious problems – they do not suffer from a range issue, are perhaps somewhat easier (or at least faster) to refuel, and in the near term are likely to be less expensive than pure Evs. But in both cases the vehicle costs will likely come down over the coming 5-10 years as battery production scales increase and learning takes place; it is hoped that battery costs can be cut by at least half, to less than USD 300 per kilowatt hour, by 2015 or at the latest 2020. Furthermore, a substantial amount of investment will be needed in recharging infrastructure, and it is not clear who will pay for this, though many national and local governments are already providing strong support in this regard.

What level of investment is being channelled into these vehicles?
Public research, development and demonstration spending on Evs and PHEVs increased from USD 265 million in 2003 to USD 1.6 billion in 2010. (More information on this can be found in the IEA’s Clean Energy Progress Report).  Several USD billion per year is expected to be spent on vehicle incentive programs and infrastructure in the coming three to five years; this will probably need to be maintained to at least 2020 to ensure healthy market development and drive down the cost of vehicles and (in particular) batteries.

Which governments are leading the charge in promoting Evs?
There is significant support from members of the The Role of the Electric Vehicles Initiative (EVI), which provides a forum for global co-operation on the development and deployment of electric vehicles. Participating governments in this Initiative include China, Denmark, Finland, France, Germany, India, Japan, Portugal, South Africa, Spain, Sweden, the United Kingdom and the United States. Additionally, the IEA facilitates and coordinates the collection, analysis, and dissemination of EVI data. Some other government such as South Korea, the Netherlands and Israel, while not part of this Initiative, are also highly supportive of the widespread production of Evs.

In some countries, electricity is largely generated by coal. Surely vehicles which run on electricity won’t end up reducing global warming at all, as long as electricity is powered by fossil fuels?
If electricity continues to be generated by coal in a number of countries, then yes – this would not help efforts to stem climate change. However, even if there are aggressive sales of electric vehicles over the next few years, it will still only make up 2% of the global car pool by 2020. This will allow more time for countries to begin decarbonising their power sectors, which must be done anyway to meet CO­2 targets. But certainly by 2030, when up to 15% of the cars in many countries could be electric, it will be very important to have relatively low-carbon energy generation in place in countries with high EV adoption rates. This share of cars also means cutting Ligh Duty Vehicles (LDV) oil demand by 10 - 15% in 2030, with an overall impact on reducing oil demand around the world by up to 5% in 2030, rising to up to 20% by 2050.

What does the IEA Executive Director, Mr. Nobuo Tanaka, say about all this?
Nobuo Tanaka, Executive Director of the IEA has said: “Rapid market development of advanced vehicles around the world is one key element in enabling the global economy to achieve the target of halving of CO2 emissions by 2050. The combination of advanced vehicles powered by clean electricity is the ideal solution.”

How does the IEA work in the area of transport? 
Apart from its involvement in the Electric Vehicles Initiative, the IEA conducts a broad range of transport research and analysis, which focuses on ways in which countries can improve the energy efficiency of their respective transport sectors and shift to lower carbon fuels. This work involves analysing technologies and systems which can be developed and adopted by countries to reduce dependence on oil and the amount of greenhouse gases produced by the transport sector. We also bring together representatives – from part manufactures to global energy companies – to discuss areas of mutual concern and interest.

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