Battery electric vehicles and climate change
a result, while BEV penetration offers a nice simplifying metric, environmentalists and regulators need to focus as much on increasing ‘ electrified mile-tonnes ’ (Allen, 2018) – a metric more difficult to track, but potentially twice as important. From an environmental perspective, the US, with its higher than average proportion of high-emission large cars, and high annual mileage, then becomes an environmentalist ’ s target geography, as seen in exhibit 1.2 ( ‘ Transportation Statistics by Country ’ ). Seek to sub-segment further, and California, with both high population and high proportion of clean energy within its overall electricity generation mix than many other markets ( ‘ Renewable energy in California ’ , 2019), becomes a clear target market. In researching environmental benefits that BEVs offer over conventional ICE counterparts, it’s clear that the topic is both complex and evolving. Some schools of thought (Sinn, 2019) offer wildly contrary positions to general received wisdom, arguing that vehicle and battery manufacturing processes are offsetting gains; rebuttals (Morris, 2019; Todts, 2019) point to these arguments’ use of outdated studies and compounding worse-case assumptions and comparisons (dirty energy mixes; point-in- time analysis of trends; low vehicle lifetimes). Nonetheless, no single agreed estimate of benefit exists, although perhaps this is unsurprising, given the inherent complexities of the underlying assumptions: size of vehicles, accuracy of fuel-economy estimates, driving patterns, and weather. In addition, considerable forecasting skills are required to anticipate the future emissions associated with electric vehicle production. With the emission consequences of battery production also playing a critical role, the geographic home for BEVs’ supply chain also becomes key: producing batteries in regions with lower carbon electricity generation, or, as in Tesla’s case, using ‘Gigafactories’ powered enti rely by renewable energy, can have a substantial impact on the total lifetime emission value of an electric car ( ‘ Factcheck: How electric vehicles help to tackle climate change ’ , 2020). Nonetheless, while the full- scale impact of BEVs’ ability to affect climate change depends on many factors – de-carbonization of electricity production; differential substitution of ‘dirty’ high -mileage, high-emission vehicles; geographic take up; energy efficiency and carbon emissions of both new car production and battery sourcing – , few deny the potential. If regulation can drive clean energy production, if consumers and original equipment manufacturers (OEMs) can be incentivized or regulated to switch their larger cars to BEVs, if infrastructure investment can be pointed first at geographies that matter, and if OEMS and battery suppliers can form partnerships to improve efficiency of production, then the industry offers a path towards climate change mitigation. Understanding these preconditions provides a map for environmentalists, regulators and OEMs to follow.
Rule 2: New technology must deliver and improve on existing customer propositions
To succeed, any technological innovation that brings environmental benefits must still meet or beat existing, more traditional, propositions in the overall battle to address customer needs. But even beyond this, customers need to be educated to both be aware of and understand offerings; they need to be readily able to purchase, and inherent nervousness and risk aversion around new technologies also needs to be mitigated, at least after the goodwill and bravado that early adopters will bring has been exhausted. The story of BEV customer take-up relative to ICE reflects all these challenges.
Motorway-capable BEVs first appeared in niche luxury and expensive form in the US with the 2004 launch of the Tesla Roadster in limited production runs. While both this model, and its successor Model S, readily sold out, Exhibit 2.1 shows the slow penetration growth of global BEV sales relative
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