How Much Can Electric Vehicles Reduce Our GHG Emissions?
The Electric Vehicle (EV) frenzy has taken the world by storm. It has actually been building up over the years, but 2016 and 2017 seem to be the years of the EV. This is partly because there has been significant advances in the technology (particularly batteries), lower EV prices, as well as renewed focus on climate change action after the 2015 Paris Agreement. Furthermore, Tesla has been on the forefront of the news with the release of their Model X and Model S - vehicles that have captured the hearts of people who have never previously thought twice about owning an electric vehicle.
As at 2015, EVs on the road totaled about 1.26 million. Compare this to 2010 when the number of EVs on the road was in the hundreds, and mainly in the United States. Now for the first time, China is leading the United States in the number of EVs on their roads. In fact, the EV market is largest in nine markets namely China, United States, Japan, the Netherlands, Norway, France, United Kingdom, Germany and Canada. Currently, only Norway, the Netherlands, Sweden, Denmark, France, China and the United Kingdom have EVs in their markets exceeding 1% of all cars on their roads. But Norway is the clear leader in this regard with a significant 23% of the vehicles on their roads being EVs. In 2016, more than 40% of all new EVs sold globally were in China, clearly showing that they are leading the pack in this regard.
Still, with more than 1 billion vehicles on the road, and total number EVs (both vehicles and 2-3 wheelers) barely 2 million globally, EVs still represent barely a fraction of the vehicles in use currently and is unlikely to truly take the world by ‘storm’ anytime soon.
But growth is expected from the current less than 0.01% of EVs on the road globally. Europe and Asia are seen to be driving this growth. A total of 14 countries have formally announced quantitative EV targets. These countries are China, India, Japan, South Korea, Austria, Denmark, France, Germany, Ireland, Netherlands, Portugal, Spain, United Kingdom and United States. The total target from these markets is 13 million EVs on their roads by 2020, with expectations that EVs will make up 7% of new cars sold in these markets (collectively) between 2016 and 2020. However, this will be nowhere close to global targets as mandated by the Paris Agreement.
The Paris Agreement sets a target for 100 million EVs (and 400 million vehicles, 2 and 3 wheelers) in use globally by 2030. This ambitious target is necessary because the transport sector contributes about 23% of global energy-related GHG emissions and 14% of total emissions. This means that for global warming to be kept within the 2 degrees limit, the transport sector has to contribute up to 1/5 of total energy-related GHG emission reductions. Ambitious is an understatement. But utilizing EVs widespread on a global level, especially when they are charged using decarbonized sources, is a critical action towards achieving this reduction.
Unfortunately, the current projections for EVs globally (i.e. about 3% of total vehicle stocks by 2020) is nowhere close to what is required by the transport sector to reduce energy-related GHG emissions. By 2040 though, global projections for EV is about 70 million, still only about 6% of all cars on the road, and still less than the 100 million Paris Agreement 2030 target.
At this rate, it doesn’t look like EVs is going to put any dent into car-related GHG emissions reductions efforts in the next 25 years – at least not enough to make an impact on keeping us within 2 degrees warming. This will remain the case even if most European countries totally bans the sale of internal combustion engines as the trend shows. For example, France has announced that they will ban sales of petrol and diesel cars by 2040; French manufacturers Peugeot, Citroën and Renault are the leading large manufacturers with the lowest carbon emissions. And Swedish multinational manufacturers, Volvo, has announced that they will only make fully electric or hybrid cars by 2019.
In addition, the widespread use of EVs globally should, in theory, contribute to reduced demands for oil, the source of which is a major contributor of GHG gases. However, this may not realistically materialize even in 2040. Projections for oil demand are varied, but oil demand from cars is expected to rise from 19 million bpd in 2015 to 23 million bpd in 2035 even despite growth of EVs. This is mainly because of several other factors, the biggest of which are growth in population (we will be more than 9 billion in number by 2040), steady GDP and growth of megacities (41 megacities by 2040 as opposed to the 29 we have now, all of which are expected to invest heavily in road infrastructure; and more than half will be in developing countries where the demand for secondhand vehicles is high). All these will encourage the purchase of more traditional internal combustion engine cars, or at least, keep these vehicles in circulation for longer.
Despite the current bleak numbers for EVs, several researchers are optimistic in their predictions. For example, Bloomberg forecasts that EVs will make up 54% of all light vehicle sales by 2040 and as such, will reduce global oil demand by 8 million bpd.
. Cities in particular, will have a key role to play in promoting EVs – whether through policies such as tax rebates and other incentives for car owners and manufacturers, or through providing infrastructure which encourages the use of EVs e.g. ubiquitous charging stations, electric rail, etc. Needless to say, it will be interesting to see whether the uptake of EVs will grow, especially in China and Europe as a whole, and the effect that policies and other enabling factors will have on EV sales.