Battery electric vehicles and climate change
With such potential for consumer confusion – ‘ where to charge? how to charge? ’ – creating a deterrence for BEV take up, simple communication is becoming critical, much as it was for mobile telecommunication industry in the 1990s. Just as the telecommunication challenge was solved through combination of government intervention (e.g., tariff standardization and simplification) and private enterprise (e.g., the launch of CarphoneWarehouse’s consumer -friendly retail proposition), so ecosystem dynamics will demand that a combination of government and private enterprise creates industry bodies that will help educate and inform consumers on charge locations and charging types. Voluntary bodies such as Open Charge Map (https://openchargemap.org), set up as a non- commercial, non-profit electric vehicle data service to provide a free open database of charging equipment locations, are currently plugging such gaps. With the rate of future industry investment anticipated, such offerings are likely to be professionalized. The lessons learned from BEV adoption, even to date, are clear. Take-up of new technologies not only requires manufacturers of that new technology to produce a consumer proposition that meets or beats existing offerings, but also a successful and mobilized ecosystem that can work effectively and profitably with all dependent suppliers and critical third party support players.
Rule 5: New technology must be backed by government regulation to support all the other rules
The combination of consumer prevarication, barriers to aligned manufacturer incentives and ecosystem complexity means that natural market forces can become an obstacle to rapid adoption of new technologies, despite their long-term benefits. BEVs offer a case study of how government regulation is typically required as an external stimulus to address barriers. Globally, public sector intervention has followed one of three main themes: actions to force OEMs to switch focus to BEVs, through punitive vehicle emissions targets, commitments to upcoming bans of future ICE vehicle sales, and attractive tax and regulation to foster R&D investment in BEV; actions that facilitate the development of national and regional charging infrastructures; and finally, actions that stimulate consumer demand for electric vehicles. Global regulation has significantly reduced CO 2 targets in recent years. In the EU, for example, CO 2 emission targets have been lowered from 172 g CO 2 /km to 95 for 2020, 81 for 2025, and 59 for 2030 (ICCT, 2019, p.4); US and China are targeting 99 and 93 respectively by 2025 (ICCT, 2019, p.11) as shown in exhibit 5.1. These targets are backed with crippling penalties that will eliminate OEM profitability if not met. For OEMs to deliver such corporate targets, calculated across the weighted average volume of vehicles that they sell, they have to switch consumers to lower emission BEVs (exhibit 5.2). In addition to national and regional regulations, urban areas, controlled by local authorities, are beginning to either ban or charge penalties on high emission vehicles (Behrmann, 2019). More progressive governments have announced future bans on pure-ICE sales (exhibit 5.3, ‘ Driving Bans in European Cities ’, 2019), such as the UK’s recently accelerated ban of ICE vehicles, brought forwards to 2035. Before governments are even tested on enforcement, these bans are likely to drive down resale values of new ICE vehicles and, in doing so, encourage consumer shift to BEV, as all players prepare for the tipping point in consumer demand.
Nonetheless, many parties are calling for even greater government support. One area of needed intervention is in actions to accelerate development of national and regional charging infrastructures.
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