Will EV Adoption Look Like Renewable Electricity Capacity Building: Only Capturing the Incremental Demand?

In 2021, globally, 1 out of 12 new car sales was an electric vehicle (EV), an impressive year-on-year growth, making some claim that this decade will see the coming-of-age for electromobility. This performance is concentrated in large markets, like China or the EU. However, seen from Mars, the global car pool strongly remains “thermal” (Internal Combustion Engine Vehicles, ICEV), with 16 million EVs out of a 1.2 billion total.

The ICEV pool looks to remain in place for many years, if not decades, as the second-hand market, nearly entirely thermal, remains buoyant, boosted by the reduction in spending power in developed economies and remaining a standard feature of less advanced ones, where affordability is the name of the game.

Are we then facing the same situation as what has been observed during the last decade in the electricity production sector, incremental growth almost entirely renewable-based, but not gaining sufficient market share to turn the table over and start a drastic reduction of GHG emissions, when power generation is deemed the easiest sector to decarbonize?

In a recent post, I quoted IRENA data, from the REN21 report, about electricity generation: between 2010 and 2020, despite a jump in the share of renewable electricity investments, from below 40% to 83% of all investments in power generation, logically assumed from low-hanging fruits capacity addition, incremental renewable electricity capacity has just kept in line with the global demand increase, implying we are nowhere close to a true greening of power. Which is of course a worry for electrification of activities, like in light duty transport.

Back to road transport, cars mostly, and focusing on Europe for the rest of this article. It may seem surprising, but even in a mature market like the old continent, where road congestion is rampant, where fuel prices come and go but with a definitive trend toward increasing, thank you taxes, and where motorization rate is high (around 560 cars for 1000 inhabitants), the car pool, close to 250 million cars, is increasing, by no less than 7.5 % between 2016 and 2020, the last relevant year for analysis, the beginning of this decade suffering from so many external shocks, pandemic, lack of microchips, war in Ukraine, return of inflation, all contributing to a brutal drop in car production and sales.

In the second half of the past decade, we are then talking of 4 million additional cars every year on average, and still 3 million in 2020, when the coronavirus attacked. New car registrations increased until 2019, up to 13 million units that year, down to less than 10 in 2020. Simple math tells us used cars balance is negative, between end-of-life in scrapyards and exports to lower income countries, meaning the pool gets more energy efficient, but, maybe, marginally: with an average age at 11.8 years, we now retire from the pool “old” cars that were new at the end of the previous century, already quite efficient, and the SUV market share has only been increasing during the last two decades, up to 40 % in 2020.

Many in industry, academia and research institutes have modeled the evolution of the car pool in the future, and conclusions are widely scattered, as science-based facts and figures are not always the only hypothesis used in simulations. Simple math, again, can shed some basic light, though. Assuming the BEV market share in new car sales progressively grows from 5% in 2020 to 20% in 2030:

• Sales would then be around 2 million units, half of the yearly growth of the car pool observed in the second half of the past decade, thus, like renewable electricity, even not keeping pace with the inflation of cars on the roads. Does anyone seriously believe car-sharing could become dominant in our Old Continent?

• Presence in the car pool would not reach 10% by the end of the decade, even with the help of hybrid vehicles and a fully decarbonized electricity sector, a mighty assumption, the contribution to the carbon footprint reduction of road transport would remain small and would justify to maintain, actually accelerate the use of low-carbon fuels in ICEVs. Seems déjà vu in the renewable electricity sector.

Can the car industry, a heavy one with a lot of steel in the ground and many skilled employees, but skilled in ICEV technology, accelerate to produce more electric cars, will customers buy in electromobility, when car purchase price (high) and recharging infrastructure (lack of) remain ominous hurdles, that will likely not be cleared this decade?

As Vaclav Smil reminds us, in a book everyone should read, “How the World Really Works”, regardless of mankind’s long record of adaptation and capacity for innovation, we have built, during the last century, a civilization of such a scale, in terms of energy and material demands, and complexity, that inertia and formidable cost are the logical consequences when massive change is contemplated, which is the case for the car industry with the switch from thermal to electric mobility. Transition will take place, but will take more time than some would like us to believe. In the meantime, energy efficiency, including in driving habits, and low-carbon liquid fuels are readily available solutions we can apply as of now.

Philippe Marchand is a Bioenergy Steering Committee Member of the European Technology and Innovation Platform (ETIP).