Climate Action

Here's how electric vehicles can keep us on the road to Paris

Image: Joenomias from Pixabay

Jonathan Eckart
Project Lead, Global Battery Alliance, Global Leadership Fellow, World Economic Forum
Frank Muehlon
Head, E-Mobility, Electrification, ABB
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  • The electrification of the transportation sector is well underway - but progress is too slow.
  • Here are three of the challenges holding back this much-needed transformation...
  • ...and three ways to overcome them.

The electrification of the transport sector is well underway. Battery costs have dropped some 90% in the last decade, more than 600 zero emission models are on track for launch by 2025 and governments around the globe – cities, sub-national states and 17 countries – are mandating transitions to clean fleets by 2030 or 2050. By 2040, over half of new vehicles sold will be electric, up from 2.7% today.

And yet this change is not happening fast enough. On the current trajectory we will fall short of what needs to be achieved to realize the 1.5°C or even the “well below 2°C” Paris Agreement goals. The share of EVs remains lower than 5% in even the most progressive markets and currently stands at 1% of the global car fleet. Battery production for electric vehicles (EV) will need to expand 19-fold by 2030 to enable emissions reductions in line with the 2°C goal; other technologies such as hydrogen fuel cells are required to complement this in order to reduce carbon emissions in the transport sector in line with the 1.5°C target.

Batteries have a big part to play in meeting global climate goals
Batteries have a big part to play in meeting global climate goals Image: World Economic Forum, Global Battery Alliance, McKinsey, IEA, IPCC

There are three fundamental challenges holding back accelerated EV adoption.

1. Scarce charging infrastructure, as well as issues of access to and management of charging facilities, have let range anxiety prevail in most vehicle segments and markets. Out of three national battery-swap pilots (Israel, Denmark and China) only one has persisted, and new pilots to enable in-road dynamic inductive charging and stationary wireless charging (for buses, trucks and cars) are still in their infancy.

2. EVs are still more costly than they need to be. High upfront cost, varying charging costs, and unknown depreciation costs remain substantial barriers to EV adoption. Financial and regulatory support is needed to enable the leap from internal combustion engine (ICE) vehicles to EVs. A policy environment that favours high-use EV (for example, shared and autonomous electric rides), as opposed to single occupancy rides and inefficient delivery, can help too.

3. There is significant room to improve the climate and broader sustainability benefits of EV batteries across their lifecycle. For example, production can come at a high greenhouse gas footprint and is linked to social and other environmental risks (see a more detailed discussion here). What is more, little to no information about these impacts is exchanged between stakeholders in the EV and battery sectors. In addition, batteries are not yet being used productively as energy storage devices in the 95% of the time that they are idle, and potential second life applications remain hampered by high transaction costs and currently low volumes.

Three winning solutions could usher in smart and rapid electrification.

1. We must double down on charging infrastructure. By 2040, some 290 million charging points should be deployed, representing about $500 billion in investment required globally. Collaborative public-private investment schemes are needed to ramp up charging infrastructure at priority locations. Many governments have included expanding EV charging infrastructure as key components to their COVID stimulus plans, such as Germany and China, and many US states have also announced new EV infrastructure investments like, New York, California, and Michigan. Oil and gas company BP has also announced a plan to reduce oil production and increase EV charging points from 7000 at present to 75000.

For longer road trips, a number of network operators are building out nation-wide charging networks with high power charging.

Smart charging solutions designed for fleets of cars, vans, and buses, can offer even faster return on investment and should therefore be leveraged immediately to drive down electric vehicle and battery production costs with near-term volume growth.

EV sales are growing fast - but this remains a fraction of the global car market
EV sales are growing fast - but this remains a fraction of the global car market Image: Statista/IEA

2. EV investments should be focused on high-impact segments. By targeting vehicles that travel the most, vehicles that carry a large volume of passengers or objects, and those that operate in highly dense environments, the return on electrification investment can easily be tripled.

3. Public-private efforts are needed to create a sustainable, circular electric vehicle market. To make electric vehicles drive the emissions reductions commensurate with realizing the Paris Agreement targets, clear global standards are required along with credible solutions to abate emissions across the whole industry. A first step is the formulation of guiding principles which highlight the broad range of interventions that are required to establish a circular and sustainable battery value chain, notable among which is to ensure that electric vehicles are produced with and run on clean electricity. A market-defining intervention would also be the roll-out of an industry wide “Battery Passport” solution, as advanced by the Global Battery Alliance: a globally credible definition of sustainable batteries, providing trusted information about the social, environmental, governance and lifecycle footprint of batteries, and a mechanism for a gradual reduction of adverse impacts across the lifecycle. For example, the greenhouse gas footprint of batteries could thus be cut in half by 2030. Taken together a host of levers are available that could effectively reduce battery costs by 20% by 2030, triggering a 35% demand increase over that timeframe.

Instead of deploying charging infrastructure where it is easy, cities can tailor deployment to future mobility corridors, mobility hubs and demand hotspots that will serve a multi-modal future. For example, fast charging at prime city locations that prioritises shared electric cars or urban delivery vehicles can advance better air quality to a greater number of people, reduce a higher volume of carbon emissions with the same investment, and propel the electrification of core urban mobility services.

Efforts in removing the upfront cost of transiting to an EV can accelerate the vehicle replacement rate, and can greatly benefit taxi, ride-hailing and car-sharing efforts to electrify their fleets – some of which have already committed to go 100% electric by 2030, while earlier this week Uber introduced a tangible consortium-led pathway for getting to 50% electric in major European cities over the next five years.

World EV Day is an occasion to celebrate the tremendous improvements that have been achieved to-date. It also cautions us not to lose sight of the collective goal: an affordable, convenient zero-emissions transportation system. Yet EV deployment will not occur at the necessary speed and scale without a concerted, targeted and bold public-private-sector collaboration. Electric vehicles can today start decarbonizing the transport and power industries over the coming decade. With this, we stand a chance of tackling the climate crisis.

A longer version of this article was previously published in Forbes. This article was written in collaboration with Maya Ben Dror, representing The Global New Mobility Coalition.

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