World’s biggest economy poses EV challenge

Most of the world’s top carmakers now want to make electric vehicles (EVs) the mode of transport to choose.  The Washington Times reported that a race has begun for EV dominance and the newspaper suggests that this trend could firmly put China in the driving seat because the country is the world’s largest car market.

Peter Morici, an economist and business professor at the University of Maryland claims the Chinese have also created “savvy government policies”. So with Trump repealing Obama-era legislation such as the $7,500 (£6,352) tax credit, which helped to stoke up consumer demand for electric vehicles, it’s widely thought that the advantage goes to China.

Speaking about the repeal of the tax credit by the Trump administration in the US, Sahand Malek, Strategy consultant, Ptolemus Consulting Group. Comments: “For consumers to consider switching from traditional powered engines to all-electric and plug-in hybrid car, the US federal income tax credit is a great motivation.” However, the oil industry’s lobby is quite strong in the US and, to a certain extent, it views electrification as a threat to its existence. After all, the key focus of any support is EVs on the reduction of harmful emissions from diesel and petrol engines.

Sahand adds: “On the other hand, for OEMs, this tax credit meant an extra boost to the market for EV cars, which could help them with costs related to customer acquisition and building customer base. Right now, the newly proposed tax plan, which would abolish federal income-tax credits for electric vehicles, would affect the future prospect of EV in the US.”

The US is often, therefore, touted as the biggest challenge for electric vehicles. Without US government backing, demand could be weak. Federal government support is also needed to ensure that the infrastructure is in place to support this fledgling alternative to internal combustion engined vehicles. Without it, the required infrastructure just won’t grow sufficiently to make EVs worthwhile.

Legislative perceptions

However, Anjan Kumar, research manager, powertrain and EV mobility at Frost & Sullivan, thinks this question is presumptive: “Why will the US be the last bastion of the internal combustion engine? Is cheap fuel, President Trump’s stance and the lack of investment in the electric vehicle infrastructure the only reasons for this claim?  This observation is presumptive, based on many countries in Europe expressing their intentions to ban the sale of ICE vehicles and USA not doing so,” he says before adding: “We anticipate many political, economic and business hurdles and opposition in walking the talk of ICE vehicle sales ban. First and foremost, any such policy or legislation that seeks to ban or block a specific technology (ICE for instance) will be seen as discriminatory and may not be passed by the legislature.

“US anti-trust laws do not allow such discriminatory policy or legislation and the US has maintained a technology neutral posture when it comes to emissions regulation (US EPA has common standards for all technologies),” he claims and then points out: “Most other countries on the other hand have different standards for petrol (SI) and diesel (CI) engines. Also, there is a massive sunken investment and employment in the ICE supply chain and, therefore, the need to protect the business and labour interests.”

“Electric mobility on the other hand will need substantial new investment for developing the charging infrastructure and grid capacity. Also, the battery technology has to go a long way to match the energy density of fossil fuel and battery cost and cycle life need significant improvement to match the economics of ICE vehicles and expand the use case for electric vehicles,” he emphasises.

Slower transition

He comments: “Frost and Sullivan therefore sees the move from ICE technology to electrics to be much slower and calibrated than most people think. The stance of the current US administration on environmental and economic issues and its impact on the pace of move to electric mobility is seen as transitory and not significant or lasting by most political and economic commentators.”

Biggest challenges

Malek thinks that the biggest challenges for electric vehicles are:

·       customer acceptance;

·       variety of size and models;

·       charging points and infrastructure;

·       car ownership model will shift by the time EV will become an attractive alternative.

Furthermore, while EVs may reduce air pollution, they could still cause other forms of environmental pollution emanating from their battery components. Even air quality won’t be off the agenda in countries that still burn fossil fuels for generating electricity at power stations.

Charging stations

“The major charging station infrastructure projects in US currently are Electrify America, National EV charging network and West Coast Electric Highway, where majority of charging stations are still 50kW with a few ranging up to 150kW,” says Kumar.

He adds: “Globally the range of battery electric cars is going to double, which means we may expect at least 30 BEVs with an autonomy of 200 miles at a minimum. This calls for upgradation of charging stations as well.” This is certainly true but it’s not going to change the current comparative speed of re-fuelling an internal combustion engine vehicle with an EV alternative.

For example, he says that ultra-fast charging is the “next wave of sensation that will juice up 200 miles of charge in 20 mins.” You can re-fuel a petrol or diesel vehicle in a matter of a couple of minutes, and so consumers in the US or elsewhere may still prefer to own one of these than to wait 20 minutes at a charging point with an electric vehicle.

Nevertheless, he comments: “These charging points are 350 kW chargers (7X faster than today’s DC chargers). IONITY – a consortium of German manufacturers is driving this initiative, which is expected to build about 400 of such stations by 2020.”

Limiting factors

So, you could say that the technology itself is the biggest limiting factor – more so that the removal of the tax credit by the Trump administration. Even so, The Guardian newspaper reported in June 2017 that “China, the US and Europe accounted for more than 90% of electric vehicle sales last year, with China the single biggest market, according to research by the International Energy Agency”.

Ptolemus Consulting Group says China – not the US – was the largest seller of electric vehicles – equating to 40% of electric vehicles sold in the world. The Trump administration could, therefore, lose out on a major opportunity for the US if it doesn’t encourage investment into electric vehicles.


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