3 Signs That the Electric Vehicle Revolution is Here
According to NASA, road transportation is the greatest contributor to global warming and will continue to be so for the next 50 years, unless policies support mitigation and a transition to better public transportation and better modes of transportation, such as electric vehicles. Luckily, there are signs of not only industries and government supporting the transition, but also consumers are showing a growing interest in electric vehicles. There is no doubt that electric vehicles are going mainstream- now the only question is how smooth the transition will be.
The first good sign is that recently, the US electric vehicle loyalty and volumes reached record highs, according to IHS Markit. U.S. policy makers must take steps to reduce emissions, promote green growth, and mitigate transportation’s harmful effects on the climate. In the end, investing in business as usual, is a bad investment, as shown with this example in Ohio, a state that is very dependent on the auto industry: A report from Synapse Energy Economics in partnership with the Great Lakes Energy Institute at Case Western Reserve University estimated that preserving the current focus on traditional internal combustion drivetrain systems alone would cost Ohio “over $740 million in annual GDP by 2030, with the loss of 7,000 jobs and the associated $675 million in annual wages.” If Ohio welcomes the electrification opportunity, the state’s auto industry could instead grow by 2,000 jobs and $135 million in annual wages, the report estimates. All signs point to EV transition in the US, so it’s about being prepared for it. New registrations for EVs during 2018 more than doubled year-over-year from just over 100,000 while EV market share has also increased exponentially, over the past three years. This growing demand combined with upcoming new entries in the market from start-up automakers like Rivian, Lucid and SF Motors, as well as traditional manufacturers, US consumers are expected to have substantially more options on the dealership floor over the short-term.
The second good sign is that automakers are now making huge efforts — for example, the German manufacturers who are now asking for governmental help to change to EV manufacturing and companies are taking charge with EV initiatives and are increasingly ramping up their commitment to EVs. Last month, Volkswagen upped its target to 70 fully electric models by 2028 and reportedly threatened to quit German car lobby group VDA over its lack of support for EVs.
Meanwhile, over 35 companies including the world’s leading auto leasing company LeasePlan are working to drive the shift to more sustainable powertrains and demonstrating demand for EVs through EV100 – a global business initiative designed to fast-track the uptake of electric vehicles and infrastructure among large global corporations, launched by The Climate Group. German automakers — including BMW, Daimler, and Volkswagen (VW) — will spend about $45 billion on electric vehicle (EV) technology over the next three years, according to a new report from VDA. In many ways, the manufacturers themselves are leading the fight for EVs, they see that EVs are cost-competitive, and that to reach global climate agreements, satisfy consumer demand, and prepare for smart growth, EVs are the only way.
The third good sign is government seems to be supporting these industry goals and they are realising that EVs are not only good for the environment, but also the economy. There is also opportunity to see that this issue is tied to so many sectors and can influence so many different bills and sectors in a positive way. It can be a symbiotic positive transition.
The practical steps for policy makers are first, to focus directly on the need to drive everywhere. Second, shorter trips. We need to support better connections between land use planning and transportation—aka smart growth—so that trip lengths can be reduced. Third, we need to give the public more choices. As origins and destinations come together, you can have more choices. Public transportation makes sense, buses make sense, bike paths make sense, walking makes sense. These are all things to be considered when planning for sustainable development policy. “By adopting clear long-term policies that embrace the growth potential of rapidly transitioning to electric vehicles (EVs), the German government can provide the catalyst the industry needs to thrive both in Europe and internationally.” Germany's economy ministry and its finance ministry have both expressed intentions of extending the country's subsidies for electric vehicles. There are also other measures to push electric mobility, including tax subsidies for corporate purchases of electric cars and bicycles that would last until 2030. In China, automakers are already reaping the benefits of ambitious government policies on EVs and pulling ahead in the race to define the future of the industry. In 2018, China’s sales of new-energy vehicles surged 62% to 1.26 million, most of which came from domestic producers.
In the words of David Burwell, “There is an opportunity to generate enormous amounts of revenue for energy and climate legislation through either a carbon fee or cap and trade provisions. We also have a transportation bill that is broke—we are funding about $20 billion per year of the transportation program out of the general fund. So, if we could move some of the money generated by the energy and climate bill to green transport—which also reduces carbon—and fund the transportation program, you get a deficit reduction bill, you get a funded transportation bill, you get an oil independence bill, you get an energy independence bill, and you get a climate protection bill. It’s like eating your Wheaties in the morning. It contributes good things to everybody to link these two bills.”
In the end, there is a lot of hope and the future of autos is certainly electric- just more awareness is needed. Investing in and transitioning to electric vehicles is a transition to more sustainable jobs, better health and cleaner air, and helping to avoid future climate disasters. Consumer demand for the industry as well as citizen demands from their government will be the key needed in how fast the transition is.