Happy Thursday friends! Here’s my weekly take on the five most interesting developments in LCFV trends over the last week.
I am not sure Trump is going to kill the EV, he just might not help it along. Three ways he could do that:
With respect to federal incentives, they may not be needed anyway. First, technology innovation, particularly for batteries, is driving costs down. A paper from the Zero Emission Vehicle Alliance this week showed that the EV range and cost improvements will greatly expand the market and reduce the need for incentives. “Due largely to battery innovation and manufacturing scale, higher-range electric vehicle costs will be reduced by greater than $10,000 in the 2017–2022 time period.”
Second, state incentives may actually play a more important role. According to a paper produced by ICCT this week, such incentives typically range from $1,000-3,000 per battery electric vehicle in most states, and they are typically about half as much for plug-in hybrid vehicles due to their lesser all-electric driving capability. Colorado has the highest incentive: as much as $5,000 per vehicle. State ZEV mandates, such as California’s, are a powerful mechanism to foster the EV market. This point was made in a post by former Colorado Governor Bill Ritter this week.
The Bloomberg article makes several interesting points about the post-election Trump world and the future of EVs, some of which I have made already:
As if to underscore Bloomberg’s point, eight countries this week at COP22 in Marrakech signed the Government Fleet Declaration, pledging to increase the share of EVs in their government fleets and calling for other governments to join them. The countries included: Canada, China, France, Japan, Norway, Sweden, the United Kingdom and the U.S. The goal is the global deployment of 20 million electric vehicles, including plug-in hybrid electric vehicles and fuel cell vehicles, by 2020. The figure below shows EV sales from 2010-2015 globally.
According to IEA’s World Energy Outlook released this week, renewables and natural gas will be the big winners in meeting energy demand through 2040. Energy demand is expected to increase 30% over this period. Read more about it here.
Trump or no Trump, the Obama Administration is planting one of its final seeds, making what could be a final statement on climate change, the need for decarbonization in the U.S. by 2050 and how it can be achieved while growing the economy. Read more about it here.
As I said last week, if any low carbon fuel and vehicle (LCFV) regulation is rolled back, it will be the federal fuel economy standards as applied in the years 2022-2025 and which are currently under review. And no sooner did I write those words did the Alliance of Automobile Manufacturers present its request to the incoming Trump Transition Team to, among other things, find “a pathway forward” on the future of the fuel economy standards. Read more about it here.
The EU is also in the midst of planning new fuel economy standards. The way to go, according to a new study from MIT, is to altogether ditch corporate average fuel economy (CAFE) standards, the regime the U.S. has in place, and extend its existing emissions-trading system (ETS) to encompass transportation. Not only would such a plan be more effective in reducing GHGs, it would also save 63 billion Euros per year. Adding the transportation sector to the ETS would shore up weaknesses in the existing program as MIT says there are not enough emissions-producing sectors of the economy to be effective.