October 5, 2023 • 33 mins
The rise of electric cars is staggering. In 2016, just 700,000 electric cars were sold worldwide, this year it’ll be over 14 million. However, we are still off-track to meet climate goals. Colin McKerracher, head of Advanced Transport at BloombergNEF, joins Zero to discuss how electric cars can get on track to meet net-zero targets, why China has succeeded where others haven’t, and when we’ll finally see more electric cars on the roads than those burning fossil fuels.
Read more:
- China Reaches Peak Gasoline in Milestone for Electric Vehicles
- Electric Vehicle Sales Top $1 Trillion in Wake-Up Call for Carmakers
- Electric Cars Are Winning Out Because of Consumers, Not Politicians
- Pre-order Akshat’s new book, Climate Capitalism
- Read a transcript of this episode.
Zero is a production of Bloomberg Green. Our producer is Oscar Boyd and our senior producer is Christine Driscoll. Special thanks to Kira Bindrim. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit bloomberg.com/green.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to zero. I'm Akshatrati. This week, Evi's everywhere, all
at once. It wasn't long ago that electric vehicles were
(00:21):
seen as a novelty item that some eccentrics pursued despite
the many problems. The range was too short, the charging
too slow, the price too high. Now they're everywhere. Teslas
have gone from being the car of the uber ridge
to the car of the uber driver, and all the
major manufacturers have been forced to take the plunge into
(00:41):
making electric vehicles. The growth is staggering. In twenty sixteen,
just seven hundred thousand electric cars were sold globally. This
year that number will be over fourteen million. The charge
is clearly led by China, but evs are seeing a
rise in popularity all across the world. And yet despite
(01:02):
all the success, we are still way of meeting climate targets.
Speaker 2 (01:05):
We're not on tracks. Even though it's gone really quickly,
we're not on track for the net zero scenario. The
net zero scenario is that pretty much for passenger car sales,
you need to phase out buster vehicle sales fully globally
by around twenty thirty five.
Speaker 1 (01:17):
That's Colin mccracker head of Advanced Transport for Bloomberg NEF.
If you want to understand what's happening with electric vehicles
worldwide and where the industry goes next, he is the
person to talk to. Every time I read one of
his columns, I walk away learning something new. He recently
wrote about how China has reached peak gasoline demand, how
(01:38):
global EV sales have breached one trillion dollars, and why
electric cars are winning because of consumers not politicians. Colin
joins us on Zero Today to share his thoughts on
how we get electric cars on track to meet climate goals,
why China has succeeded where others haven't, and when we'll
finally see more electric cars on the roads than those
(01:59):
burning for fields. But I wanted to start by putting
to bed a myth that's persisted for too long. One
debate which kind of is dying? But I feel like
if it is dying, maybe it's time to put the
death nail in it. Do evs, when you take the
(02:19):
total emissions of making them and running them, cut carbon
dioxide emissions relative to an internal combustion engine or not?
Speaker 2 (02:28):
Absolutely, unequivocally yes.
Speaker 1 (02:30):
Even on one hundred percent coal powered grid.
Speaker 2 (02:32):
Yeah, if you have one hundred percent coal fired grid,
of which there are very few in the world, then
the benefits on a life cycle basis are pretty marginal.
It's sort of a ten to fifteen percent benefit over
a new efficient internal combustion engine vehicle. But in most
other places it's a dramatic, dramatic reduction, so it might
be eighty percent seventy percent depending on the country. You
(02:53):
can think of it another way in terms of payback.
So making a EV battery and the components associated with
it have a higher carbon footprint than making an internal
combustion engine in the US with current rid mix, you
pay back that higher upfront CO two burden in about
a year and a half of driving. Now in some
cases that's two years. In China it's more like five
(03:15):
or six years. But the point is that that vehicle
will continue to get cleaner over its life cycle as
long as we can keep getting the power infrastructure and
grid generation mix cleaner. And we're doing that. I mean,
you've done many shows on solar and on renewables that's
happening that you're not going to derail that trend. There's
going to be more and more renewables on the grid,
and an internal combustion engine vehicle when it rolls off
(03:37):
the line, it's emissions profile is locked in for the
lifetime of its vehicle and slightly gets worse as the
efficiency can degrade. Now an EV isn't. You aren't locking
in the emissions. Its emissions profile changes over time and
it will continue to get better. So there's a lot
of ways you can make this look bad. You can say, oh,
a vehicle only goes one hundred thousand kilometers or sixty
(03:58):
thousand miles in its lifetime. It doesn't they go a
lot more than that. You can take outdated studies on
how much emissions are from making a battery. You can
look at old data on grid emissions intensity factors for
a country and assume they say stay frozen for fifteen years.
But again, all those are just really bad methodological assumptions,
and it really irks me and it works anybody who
works on this stuff to see those things come up
(04:18):
over and over again, because it's actually not that complicated
a calculation. If you use good current data on it,
you come unequivocally to the conclusion that evs have lower
life cycle SEO two emissions than comparable combustion cars today.
I think there's one other thing actually that's important to
mention there too, is that we're talking entirely about carbon here.
My view is that from a health point of view,
an urban air quality point of view, you can probably
(04:40):
justifying doing this even totally separate from the CO two benefits,
and you can see that health benefit immediately, and that's
just going to be more and more fuel for pushing
this harder from a policy point of view, especially in cities.
Speaker 1 (04:52):
So let's start with a broad overview. What were you
predicting when you first started the job as an EV
analyst in twenty fifteen. How have those predictions panned out?
Speaker 2 (05:02):
Yeah, So, the main thing we were saying then was
that battery prices had already come down about sixty percent
over five years from twenty ten to twenty fifteen, and
we were predicting that trajectory was going to continue, and
then that was going to bring electrified transport into the
sort of economically viable category in many, many different segments
of transport. And that's effectively what has happened. The learning
(05:24):
rate for lithium ion batteries has largely held up the
technology has gotten better, energy density has improved, cycle life
has improved, safety has improved, but most importantly, cost has
continued to come down. And that's really why we are
where we are today. Policy has played a really big
role too, but it's an incredible technology success story on
the lithium ion battery front. And that was our main prediction.
Speaker 1 (05:44):
Where have you been surprised in these ideas? If you
looked at yourself knowing what you knew in twenty fifteen
versus now, what in hindsight could you not have predicted
or did you not predict?
Speaker 2 (05:56):
I think probably the biggest one is the speed at
which China has gone all out for electric vehicles. So,
just as a reference point, in August twenty twenty three,
here thirty eight percent of vehicle sold in China had
a plug. That's pretty remarkable for the world's largest auto market.
And this is one of the tricky things about predicting
major changes on a consumer driven product is that you're
(06:16):
looking primarily from a technoeconomic perspective to start and thinking
about when do these things become cost competitive and all
these different factors around policy and economics and technology, But
ultimately this is a consumer product. And eventually what happens
is that consumer demand takes over, and that's essentially what
happened in China. We thought that probably wouldn't happen until
twenty twenty five or twenty twenty six, because we were
looking at the technology and thinking, well, this is going
(06:38):
to take a bit longer to get price competitive. But
what has happened is that that happened several years sooner
than we thought, and then adoption just went way up.
I think we still probably got it better than most
out there, but I think it's important to recognize that
it has gone faster than we thought, particularly in China.
In other regions, I think we've got it more accurate.
In Europe, it's about where we thought it would be.
In the US, we've actually overshot it bit sometimes. But
(07:01):
I think the biggest miss is probably just, yeah, the
speed at which this has happened in China, and we're
still watching that. I mean, it continues to go. We're
off to the races, if you will, on EVY adoption
in China now.
Speaker 1 (07:10):
And just so give a little bit of contact on
the numbers here. There were three million electric vehicles sold
in twenty twenty six million in twenty twenty one, ten
million in twenty twenty two, and the forecast from bloomagenif
is twenty seven million in twenty twenty six. Now that's
a global picture, and China dominates in this ecosystem. But
(07:31):
before we get to China, what has all this ev
mania done to oil? Because that's where this transition is
being driven. It is to try and drive down the
consumption of oil. There is clearly a growth in the market,
but has it really dented oil demand.
Speaker 2 (07:49):
It's pretty modest so far, if we're honest. We do
this exercise every year where we look at all different
types of vehicles how much oil they're displacing. And our
estimate right now across all different types and we can
talk about on cars when we talk about buses and
trucks and two and three wheelers, but it's about one
point five million barrels a day. And that's against projection
for global consumption this year of around one one hundred
and three million barrels per day. So it's modest, but
(08:12):
I would say it's growing quite quickly and has the
potential to start to dent oil demand in the latter
half of this decade. I think the important thing to
remember is there's this lag between new vehicle sales, of
which evs are now quite a rising share, about twenty
percent in the most recent month. A vehicle sold globally
had a plug last month, which is quite remarkable.
Speaker 1 (08:32):
Wow.
Speaker 2 (08:33):
Yeah, that's the most recent data, so really really remarkable numbers.
But again, that's the share of the new sales. It
takes a long time for that to flow into fleet.
There's about one point three billion cars on the road globally.
The vast majority of those still have an internal combustion engine.
It's a little over two percent of those that are
fully electric today.
Speaker 1 (08:49):
There's always this interest in knowing when the demand for
oil will peak, and the business of predicting a peak
is hard. And one of the peaks that you did
get right is that in twenty seventeen, the number of
internal combustion engine vehicles sold peaked.
Speaker 2 (09:06):
And that was uncomfortable to call at the time, I
will say, because we made that call in twenty eighteen
and we could sort of see the cycle kind of
turning a little bit, and yeah, we're now down. Internal
combustion engine vehicle sales are now down twenty percent from
that twenty seventeen peak. By twenty twenty five, we think
they're down forty percent, and then there's just no real
route back, right. You got to be a bit careful
(09:27):
celebrating peaks because there have been some missed calls on
this where ten years later something starts to rev up again, and.
Speaker 1 (09:33):
That's happening with cold right now.
Speaker 2 (09:34):
Yeah, yeah, actly. Cole's probably the most famous one of those.
But I'm reasonably confident we've got that right. I can't
really see a route back to growth for the internal
combustion engine. And actually the most interesting place to see
that is the Shanghai Auto Show. You go to the
Shanghai Auto Show and all of the design money, all
of the newest gadgets, all of the coolest looking cars,
(09:54):
all of them, all of them are eb's, all the
Chinese automakers, all of the money, all of the cool projects,
all of the smartest people. They're working on the evs,
they're working on the electric platforms. The IC platforms are
sort of left to wither.
Speaker 1 (10:07):
In case you weren't sure, ICE stands for the internal
combustion engine.
Speaker 2 (10:12):
Even if they're still making up the majority of car
sales today, it's clear that growth is what people want,
not absolute market share, and growth is also what markets
tend to reward, not absolute market share.
Speaker 1 (10:23):
So a lot of the time you're doing this, you're
spending in front of big spreadsheets of data. But on
a day to day basis, what do you drive? What
have you driven that's been crazy? What are the sort
of fun things you've done being the ev guru that
you are.
Speaker 2 (10:37):
Yeah, I think sometimes people think we just get to
go around and drive all these latest supercars or something
we really don't do. I have driven most of the
sort of mass produced models right now. My current vehicle
is a Volkswagen I five, which I bought last summer.
Happy with it, Yeah, happy with it. It's great, five
hundred klometers range, does whatever it needs. When we ever
we do road trips, the kids need to stop and
pee long before we ever have to recharge the cars,
(10:59):
so I've had no issues at all. I'm aware though
that I am. I have home charging in this apartment,
which I think that gets at one of the challenges
is in some places where apartments don't have home charging,
there's still some challenges there to overcome in terms of
getting people to be able to recharge easily.
Speaker 1 (11:14):
Let's say China is the giant when it comes to EV's,
but we should acknowledge you live in Oslo, which technically
is the capital of EV's.
Speaker 2 (11:22):
Yeah, definitely, it's a very high percentage here. I look
out the window and I can see all the new
evs whenever they hit the market, whether it's a Chinese
one or an American one, or a European or Japanese one,
you see them on the road right away here in Oslo,
which is fascinating. There's a huge amount of consumer choice,
and that's because it's a market that went early, that
built a lot of charging infrastructure, and where now ninety
(11:43):
percent of sales are already plugins. This market is kind
of done, essentially, we're now just waiting for the fleet
to turn over.
Speaker 1 (11:49):
China is by far and away the biggest purchase of EV's,
the biggest maker of EV's. Last year, it accounted for
sixty percent of all sales. Why has China been such
a success story, and even more of a success story
than you predicted it could be.
Speaker 2 (12:06):
I think it's been a combination of factors, and they've
all come together quite well. The first one has been
government policy support. So the government has been very clear
from quite early on that it sees new energy vehicles
as which is their term for fuel cell, mattery, electric
and plug and hybrid as the future, and they've supported
different stages of policy to do that. So at the
beginning it was all about pushing government purchasing towards that,
(12:28):
so all the government fleet vehicles and that sort of thing.
Then there was this other phase of pushing the automakers
more strongly into it through its new energy Vehicle credit
system and also city policies, which played a big role
in making it harder for end consumers to buy an
internal combustion engine. You need to get a license plate
in a major Chinese city. That usually involves a lottery
or an auction system, which is kind of unheard of
(12:49):
to people in North America, the idea that you might
have to wait to get a license plate even if
you already have the money to buy a car. But
that's how it works in a lot of the big
Chinese cities because they've been concerned about congestion.
Speaker 1 (12:58):
You can't take our freedoms away in America, can you?
Speaker 2 (13:01):
Yes? Or other places too. I mean, I think if
you told people in Europe that they had the money
to buy a car, but they can't get a license
plate for it, they might get pretty upset as well.
So that has been a big part of it too,
because evs were allowed to go around that in the
biggest cities, and you could get a license plate right
away or at least on a shorter timeframe if you
were putting an EV on the road. So China declared
war on urban pollution, and one of the best things
(13:22):
you could do to clean up urban air quality is
electrified vehicles. So places like Shenjen, you go to them,
they electrified the buses fully in twenty eighteen, all the
taxis a large portion of the passenger vehicle fleet is
now electric. It's pretty clean, and you notice the air
versus some of the other ones that are further behind that,
the air quality is better. So that was a big
part of that, that sort of policy push that factored
in both national, regional and local governments. The other one
(13:46):
is just that the Chinese automakers were never really globally
competitive in the internal combustion engine vehicle market. And if
you look at the biggest economies in the world, if
that's the US, Japan, Germany, all those other ones, had
outsized domestic auto industry that exports to the world, and
China didn't, right, And so they recognize that there's a
window of opportunity there and sort of a focus of
(14:08):
industrial policy to keep that window open and jump through it,
to leapfrog a little bit, and therefore built out a
lot of the supply chain necessarity to do that. So
the battery manufacturing capacity in China is huge. There's enough
batteries manufactured in China this year to more than meet
global ev demand and stationary storage demand. There's actually over capacity,
(14:29):
so that supply chain build up was really important. And
then the last one is just that Chinese consumers tend
to adopt new technologies faster than their counterparts in North
America or Europe. And some of that is due to
a younger average age of the buying population, but some
of that when it comes to cars, I think is
because there's been this huge rise of the middle class
in China and they may not have the same expectations
(14:52):
over many generations of exactly what a car trip might
be or what a car exactly should do. And you
think about if you grew up in North America, maybe
went for a roach of with your grandparents, your parents
in college, and you sort of have this very set
idea of exactly what the car should do for you
and what it should be. There's something in that as well.
With a newly upwardly mobile Chinese middle class. Many of
(15:13):
them are the first car buyers in their family, and
I think that makes them a little more flexible to
adopting new technologies. And that's certainly born out in the data,
this Chinese willingness to adopt new technologies, probably faster and
sooner than in other regions of the world.
Speaker 1 (15:26):
In my book Climate Capitalism, I go through the story
of One Gang, this Chinese science minister at the center
of this concentrated period between twenty nine and twenty seventeen,
when China ended up spending, through one estimate a conservative one,
something like sixty billion US dollars on trying to build
this industry. In that process, it has captured the battery
(15:48):
supply chain. Batteries are at the heart of the electrification story,
and we are starting to see a reaction from other
regions to this dominance. Certainly, batteries have made regions like
Europe and North America sit up and try to do
something about it. How much do you think China's hold
(16:12):
over the battery supply chain could be a hindrance for
the kind of ev growth we need to be able
to meet net zero goals, which we still aren't on
track for.
Speaker 2 (16:22):
Yeah, this is one of the most interesting tensions that's
really come up in the last two years is that
there has been this goal of getting as much clean
energy and clean technology deployed as possible, and that has
hinged on cost reductions, right, and cost reductions have been remarkable,
But now we're entering an era where there are competing priorities.
There is this other priority of where do the jobs go,
(16:45):
and balance of trade and R and D investment and
essentially industrial policy, and in many ways that is supportive
of rapid decarbonization, but in other ways it can run
counter to it. What we're seeing is that we are
going to see more and more regionalization of these markets,
right as countries or regents say, look, we want to
capture more of the economic benefits and not just be
(17:07):
consumers of these technologies. And in the near term, I
think that might increase costs. It's very hard for me
to say that, Look, a battery made in the US
is going to be cost competitive with a battery made
in China, given the scale of inexperience of the Chinese
manufacturing sector. But I think in the long term this
is sort of a race to the top. All of
this money and all of this capital and ingenuity that's
(17:29):
being invested in these regions to try and compete with
China is fundamentally a good thing for the transition, but
it might be a question of sort of a step
or two back to make two or three steps forward.
I often hear this argument that it's done in China
won and it's over, and I totally get where that's
coming from. Our own data suggests, look you look at
the share of solar cell manufacturing, or the share of
(17:50):
battery manufacturing, or all the battery components and raw material refining,
China absolutely dominates. But it is worth remembering that only
about a little over two percent of all cars on
the road today are electric. There is a huge market
still to play for, and we are seeing a lot
of investment in the next generation of battery technologies, so
things like solid state batteries, next generation anodes, sodium ion batteries,
(18:14):
that stuff is still up for grabs. It doesn't mean
China doesn't have a head start, but I wouldn't underestimate
the forces at play once you really get the innovation engines,
particularly in the US going, China has a dominant lead,
but the story's not fully written yet.
Speaker 1 (18:29):
One place where these tensions are showing up is in Europe.
In September, President Ursula vonder Lean announced approbe looking at
whether cheap Chinese evs are flooding the European market and
distorting prices.
Speaker 3 (18:41):
Global markets are now flooded with cheaper Chinese electric cars,
and their price is kept artificially low by huge state subsidies.
Speaker 1 (18:53):
The probe might sound counterintuitive. Surely cheap evs are a
good thing for meeting climate goals. About ten percent of
electric cars sold in Europe are from Chinese owned companies.
Most of the evs are sold by European companies, and
yet the fear is that tens of millions of people
employed by the auto industry will suffer if China continues
(19:14):
to eat a bigger share of the market. That misses
a crucial point. Many of the cars sold by European
brands are already made outside of Europe, So is there
anything to the probe beyond protecting a European car industry
struggling to catch up.
Speaker 2 (19:30):
I think some of this might just be politics. It
might be to show that, hey, we're there to ensure
that European industry is successful. Some of those manufacturers are
little bit behind and then are pushing politicians to say,
we need a grace period. You need to help us
with a grace period to catch up, because we didn't
take this as seriously as we should have. Were a
bit flat footed. And one consistent thing over the last
(19:51):
twenty years is that a lot of automakers opposed steadily
tightening of fuel economy regulations. They always thought to water
them down. And what that meant is that they did
invest as much in electrification, and in the European automaker's case,
a lot of them invested heavily in diesel. But consumers
do want to buy evs and now they are to
be honest behind compared to Tesla and the Chinese automakers.
Speaker 1 (20:14):
After the break, can any other tech derail the success
of electric vehicles? Or are battery powered cars here to stay?
(20:35):
For passenger cars? Are battery electrics the future? Like we
have this hydrogen field, cell vehicle. We have this plug
in hybrid situation going on for some time, but as
you see, it is the future battery electric and nothing else.
Speaker 2 (20:50):
I think the future is electric and plug in on
the hydrogen point, I think that's dead. For passenger cars,
sales are falling. They fell last year. The only market
that's really keep it alive is South Korea, where the
incentives are extremely generous. They're also extremely generous in California,
tens of thousands of dollars available in incentives, and even
then the numbers are very, very modest. Even if the
(21:11):
passenger fuel cell vehicle fleet were to double every three
years from now all the way out to twenty forty,
that's the most optimistic scenario I can come up with,
they would still only be about point two percent of
the global vehicle fleet in twenty forty, So irrelevant from
an emissions reduction point of view, irrelevant from a climate
point of view. Where it's more interesting is within plug
in vehicles. So about seventy five percent of all plug
in vehicles today are battery electrics, but there's still a
(21:33):
decent number of plug in hybrids sold.
Speaker 1 (21:35):
A plug in hybrid is a car with an internal
combustion engine and a battery pack that can be recharged
with an external cable. The car will run on the
battery pack until it's out of juice and then switch
to burning fossil fuels.
Speaker 2 (21:48):
There's still a decent number of plug in hybrids sold,
and the place where that's really interesting is China. So
the plug in hybrid market for a while was driven
primarily by Europe, and it was a compliance market, so
automakers had to meet certain CO two targets for their vehicles.
So you saw this large number of questionable plug and
hybrids with very short ranges. They were able to game
(22:10):
the system a little bit, but people weren't driving them
in electric mode all that often. What's kind of different
about what's happening in China is that there are plug
and hybrids coming out that are not purely designed for
regulatory compliance. They're designed for consumers to actually use them
in electric mode. They have ranges of sort of one hundred,
one hundred and fifty kilometers, and they're often being adopted
in places where the public charging infrastructure isn't that great yet.
(22:32):
I genuinely think that we are going to all electric
in the twenty thirties. I think the twenty twenties there's
still an interesting role for plug and hybrids to play.
The other segment that I would just highlight there is
that it's proving a little bit difficult to fully electrify
the biggest pickup trucks in North America, the Chevy Silverado,
(22:52):
the F one fifty. These are big trucks, right You
need a very big battery pack. It's challenging right now
with the economics where they are today to make that
fully cost competitive. Maybe Tesla can do it with the
cyber truck, but I would say actually in North America,
it would be beneficial if somebody started offering a really
good plug in hybrid mid sized pickup truck that could
(23:12):
get one hundred, one hundred and fifty kilometers a range
in all electric mode and could be priced in that
sort of forty to fifty thousand dollars range instead of
that sixty to seventy which is where a lot of
the big electric pickup trucks are coming in.
Speaker 1 (23:22):
Looking at the innovations and sticking to passenger cars, you
talked a little bit about batteries and how getting faster
charging batteries, higher energy density, which is essentially same battery
but longer range and of course lower cost are crucial.
But what other innovations in the EV sector are you
looking out for and that would make this transition go faster.
Speaker 2 (23:44):
One of the ones that's kind of underappreciated is that
we're just now at the stage where a lot of
the large manufacturers have dedicated battery electric vehicle architectures where
they've built their evs from the ground up, and that
just enables better performance, better integration, better efficiency. You can
move to a higher voltage architecture which allows for much
faster charging as well, as you see some of these
(24:04):
latest vehicles coming out capable of a three hundred and
fifty kilowat charge, some even higher, which means you'd get
into that sort of fifteen minutes to get from twenty
percent to eighty percent of the battery. That's a pretty
quick stop at that point. It's not gasoline, but by
the time you stop and go in and get a coffee,
that's enough. Interestingly, we're also seeing and this gets a
bit away from the EV part of it, but we're
seeing more and more of the automakers use their evs
(24:27):
as where they put their newest other tech, so their
vehicle connectivity, their autonomous driving features, heads up displays, all
these cool things. They're putting them in their evs first
as a way to make those vehicles more attractive, and
then they will diffuse them out to their other vehicles.
And that's actually quite a fascinating strategy because then those
become the cool, tech rich vehicles where the newest stuff happens,
(24:50):
and the people who maybe didn't care as much about
the electric drive train but want access to that tech,
they're buying those ones because that's where you find the
latest lane keeping assist or a mamatic emergency braking, or
level three autonomy, all these newer features that are starting
to come out. So I think that's actually quite an
interesting trend to watch too, is that more and more
of that is being stuffed into those evs.
Speaker 1 (25:10):
Will we ever see an EV that charges as quickly
as it takes to fill up a petrol car.
Speaker 2 (25:16):
No, I don't think you will, and I don't think
that's the right goal either. Even if you could from
the battery point of view, and it would take a
lot of engineering to do that, the grid connection, you
would need to do that for multiple vehicles at a
time would be astronomical and you would risk damaging the
battery to do it in this sort of a few
minutes timeframe. But again, I don't think that's what you need.
(25:36):
And if you look at the data on where people
are charging, most people are still doing most of their
charging at home, so we don't need to replicate the
existing refueling infrastructure in the exact way. Is because most
of the energy delivered to the car is going to
come when the car is stationary. I think you will
see more vehicles moving towards the capability to accept a
higher charge, but I don't think it goes up forever.
I think there's diminishing returns on making a vehicle capable
(25:59):
of thing that the chargers and the grid themselves are
not capable of.
Speaker 1 (26:03):
Now, you mentioned that big SUVs and these pickup trucks
in the US are really hard to electrify, not because
there is no technology to do it, but because of
the amount of batteries that need to go in it,
and the price of batteries still is high. So should
we just be pushing for smaller cars?
Speaker 2 (26:19):
Yes, I mean unequivocally yes, It's always been better from
an environmental point of view to drive a smaller vehicle.
That's still true in the EV world. Just because we
switch to electric drive trains, it doesn't mean that everyone
should everywhere drive the biggest vehicle they can. A small
vehicle is still better. An EV is still is better
than a combustion vehicle. But we should be both pushing
for smaller lighted vehicles and electric vehicles at the same time.
Speaker 1 (26:42):
The electric vehicle story from a car perspective has been
going gangbusters, and yet we are still behind on net
zero goals. So what do we need to do to
get the passenger car sector to get on track? Policy
banning the sales? What are the tools in the r
and all that need to be thrown at this?
Speaker 2 (27:02):
Yeah, so that's an important point that you've made. We're
not on track. So even though it's gone really quickly,
we're not on track for the net zero scenario. The
net zero scenario is that pretty much for passenger car sales,
you need to phase out combustionion vehicle sales fully globally
by around twenty thirty five, and even that requires some
early retirement of vehicles in the twenty forties to get
some off the road. And that's just because vehicles last
roughly fifteen years. So if you say net zero by
(27:22):
twenty fifty, net zero vehicles only by then you need
to work back to that. So I think you do
need a stronger policy push. Still, it's very encouraging to
see things like the Inflation Reduction Act, which are putting
significant dollars towards driving more ev adoption in the US,
and also supporting federal funding for charging infrastructure in the
US is really starting to flow now. So whenever we
(27:46):
talk about the scenarios for what happens in the future,
it's important to say what policy does this assume. What
we call our economic transition scenario assumes no new policy,
because I'm not in the business of forecasting whether Trump
or Biden or going to win the next election and
what policy platforms they might roll out if they do.
But policy really matters, And what you can safely say
(28:08):
is that in places where there is no supportive policy,
there's very very little ev adoption, and in places where
there's a lot of policy, there's a lot of ev adoptions.
So you do still need a stronger policy push. I
think you need a few more automakers to come off
the fence a little bit more, particularly the Japanese ones.
And also we shouldn't absolve them of responsibility that many
of them lobbied against or sued the California government over
(28:29):
the zeromissions vehicle mandate in Toyota's case, so they're not
blameless in that. Also, I do still think there's a
big role for continued R and D investment in the
technologies that enable this, because a breakthrough on next generation
battery chemistries could make this all go faster. We're seeing
a lot of rumblings right now in sodium ion batteries.
So far it's looking like it's going in probably cheaper
(28:49):
cars or two to three wheeled vehicles, but a big
advance in another battery chemistry could blow this wide open.
And I think we shouldn't stop investing in that because
the route from laboratory and science through to engineering and
manufacturing is still take some time. So I think that's
another area where you should continue to see a big push.
Speaker 1 (29:08):
Do you think the success of electric cars sort of
distracts from bigger debates that we need to be having
around encouraging less car use and more public transport use,
and whether governments are directing their subsidies, subsidies which are
necessary for this transition in the right places. Today.
Speaker 2 (29:28):
This is a tricky question. And the longer I spend
with data on global emissions from transport of all types,
the more I'm sure that you kind of need all
of the above. So when you talk to the urbanist crowd,
they say, look, no, evs aren't the solution. It should
all be active transport and public transport. When you talk
to the pure car people, they're skeptical of those things.
(29:48):
You need all of the above. You absolutely need more
public transit, you need more active travel, you need more
urban density so that people don't have to move around.
You probably need congestion pricing, and you need over a
billion electric and you shouldn't avoid that. Policymakers should not
avoid that conclusion. You need all of it. But you
do need over a billion electric vehicles on the road.
And that's just because we've left this pretty late, like
(30:10):
we there's not a lot of time to get global
emissions under control. And even in places where you have
huge amounts of active transport, and again this isn't to
disparage those, but take the Netherlands. The Netherlands is probably
the most famous example of cycle friendly country. It's got
great infrastructure, it's got great cycling culture, great supportive policy.
Over many years, it's about nine percent of all kilometers
(30:33):
traveled are by bicycle. In the about seventy percent are
by car. And the Netherlands is small, rich, densely populated, temperate,
and again has this culture of cycling. So that's got
to be the upper bound for a place like the US.
It's just not that easy to do that to achieve
that same level of cycling adoption in other countries. So, yes,
(30:53):
you need more active transport, you need all these things,
but you do need a lot of electric vehicles as well.
Speaker 1 (30:57):
You're going to break Oscar Boyd's heart as a producer
on zero who's obsessed with biking.
Speaker 2 (31:03):
I should just say that is how I get my
kids around the city. I have a bicycle and a buggy.
I take two kids, drop them off at nursery every day.
That's how I get around. Big believer in active transport.
It's just we need to be realistic about what each
thing can contribute in terms of global CO two emissions reductions.
Speaker 1 (31:21):
When will there be more electric vehicles on the road
than fossil fuel powered cars.
Speaker 2 (31:27):
When it comes to the passenger vehicle segment again, because
it takes a long time to turn over the fleet,
even when new sales largely go electric. In our economic
transition scenario, it's about twenty forty one before evs are
the majority of passenger vehicle cars on the road.
Speaker 1 (31:40):
Globally, we'll be old men by that time. But time,
I'm going to hold you to it and come back
to you in twenty forty one and then be like,
how wrong will you?
Speaker 2 (31:47):
I'm happy to be proved wrong. I will say. My
desire to see urban air quality improved and to see
rapid decarbonization is much much stronger than my desire to
be right about any of this.
Speaker 1 (32:06):
I've always lived in cities, so I don't really drive
all that much, and yet I cannot stop thinking about
electric vehicles for all the reasons Colin mentioned. They are
a huge part of the energy transition, and there's so
much new tech going into making these cars better and
more efficient. Cars are only half the story, though. Join
us for a future episode of Zero, where we'll hear
(32:28):
from Colin about how other forms of transport are being electrified.
The good pits and the ugly ones. If you'd like
to dig deep into the subject, I have a book
coming next week called Climate Capitalism, and it has two
chapters exploring China's EV revolution, one of which follows the
career of One Gang, who was China's Minister for Science
and Technology during much of that early EV boom. If
(32:50):
you'd like to learn more about that and other stories
of climate action, check the show notes for a link
where you can pre order the book. Thanks so much
for listening to Zero. If you like this episode, please
take a moment to rate and review it, Subscribe on
Apple Podcasts or Spotify. Send it to a friend or
someone with range anxiety. Get in touch at zero pod
at Bloomberg dot Net. Zero's producer is Oscar Boyd and
(33:14):
senior producer is Christine driscoll Our. Theme music is composed
by Wonderly Special Thanks as always to Kira Bindram i'm Akshadrati.
Back next week.
Welcome to zero. I'm Akshatrati. This week, Evi's everywhere, all
at once. It wasn't long ago that electric vehicles were
(00:21):
seen as a novelty item that some eccentrics pursued despite
the many problems. The range was too short, the charging
too slow, the price too high. Now they're everywhere. Teslas
have gone from being the car of the uber ridge
to the car of the uber driver, and all the
major manufacturers have been forced to take the plunge into
(00:41):
making electric vehicles. The growth is staggering. In twenty sixteen,
just seven hundred thousand electric cars were sold globally. This
year that number will be over fourteen million. The charge
is clearly led by China, but evs are seeing a
rise in popularity all across the world. And yet despite
(01:02):
all the success, we are still way of meeting climate targets.
Speaker 2 (01:05):
We're not on tracks. Even though it's gone really quickly,
we're not on track for the net zero scenario. The
net zero scenario is that pretty much for passenger car sales,
you need to phase out buster vehicle sales fully globally
by around twenty thirty five.
Speaker 1 (01:17):
That's Colin mccracker head of Advanced Transport for Bloomberg NEF.
If you want to understand what's happening with electric vehicles
worldwide and where the industry goes next, he is the
person to talk to. Every time I read one of
his columns, I walk away learning something new. He recently
wrote about how China has reached peak gasoline demand, how
(01:38):
global EV sales have breached one trillion dollars, and why
electric cars are winning because of consumers not politicians. Colin
joins us on Zero Today to share his thoughts on
how we get electric cars on track to meet climate goals,
why China has succeeded where others haven't, and when we'll
finally see more electric cars on the roads than those
(01:59):
burning for fields. But I wanted to start by putting
to bed a myth that's persisted for too long. One
debate which kind of is dying? But I feel like
if it is dying, maybe it's time to put the
death nail in it. Do evs, when you take the
(02:19):
total emissions of making them and running them, cut carbon
dioxide emissions relative to an internal combustion engine or not?
Speaker 2 (02:28):
Absolutely, unequivocally yes.
Speaker 1 (02:30):
Even on one hundred percent coal powered grid.
Speaker 2 (02:32):
Yeah, if you have one hundred percent coal fired grid,
of which there are very few in the world, then
the benefits on a life cycle basis are pretty marginal.
It's sort of a ten to fifteen percent benefit over
a new efficient internal combustion engine vehicle. But in most
other places it's a dramatic, dramatic reduction, so it might
be eighty percent seventy percent depending on the country. You
(02:53):
can think of it another way in terms of payback.
So making a EV battery and the components associated with
it have a higher carbon footprint than making an internal
combustion engine in the US with current rid mix, you
pay back that higher upfront CO two burden in about
a year and a half of driving. Now in some
cases that's two years. In China it's more like five
(03:15):
or six years. But the point is that that vehicle
will continue to get cleaner over its life cycle as
long as we can keep getting the power infrastructure and
grid generation mix cleaner. And we're doing that. I mean,
you've done many shows on solar and on renewables that's
happening that you're not going to derail that trend. There's
going to be more and more renewables on the grid,
and an internal combustion engine vehicle when it rolls off
(03:37):
the line, it's emissions profile is locked in for the
lifetime of its vehicle and slightly gets worse as the
efficiency can degrade. Now an EV isn't. You aren't locking
in the emissions. Its emissions profile changes over time and
it will continue to get better. So there's a lot
of ways you can make this look bad. You can say, oh,
a vehicle only goes one hundred thousand kilometers or sixty
(03:58):
thousand miles in its lifetime. It doesn't they go a
lot more than that. You can take outdated studies on
how much emissions are from making a battery. You can
look at old data on grid emissions intensity factors for
a country and assume they say stay frozen for fifteen years.
But again, all those are just really bad methodological assumptions,
and it really irks me and it works anybody who
works on this stuff to see those things come up
(04:18):
over and over again, because it's actually not that complicated
a calculation. If you use good current data on it,
you come unequivocally to the conclusion that evs have lower
life cycle SEO two emissions than comparable combustion cars today.
I think there's one other thing actually that's important to
mention there too, is that we're talking entirely about carbon here.
My view is that from a health point of view,
an urban air quality point of view, you can probably
(04:40):
justifying doing this even totally separate from the CO two benefits,
and you can see that health benefit immediately, and that's
just going to be more and more fuel for pushing
this harder from a policy point of view, especially in cities.
Speaker 1 (04:52):
So let's start with a broad overview. What were you
predicting when you first started the job as an EV
analyst in twenty fifteen. How have those predictions panned out?
Speaker 2 (05:02):
Yeah, So, the main thing we were saying then was
that battery prices had already come down about sixty percent
over five years from twenty ten to twenty fifteen, and
we were predicting that trajectory was going to continue, and
then that was going to bring electrified transport into the
sort of economically viable category in many, many different segments
of transport. And that's effectively what has happened. The learning
(05:24):
rate for lithium ion batteries has largely held up the
technology has gotten better, energy density has improved, cycle life
has improved, safety has improved, but most importantly, cost has
continued to come down. And that's really why we are
where we are today. Policy has played a really big
role too, but it's an incredible technology success story on
the lithium ion battery front. And that was our main prediction.
Speaker 1 (05:44):
Where have you been surprised in these ideas? If you
looked at yourself knowing what you knew in twenty fifteen
versus now, what in hindsight could you not have predicted
or did you not predict?
Speaker 2 (05:56):
I think probably the biggest one is the speed at
which China has gone all out for electric vehicles. So,
just as a reference point, in August twenty twenty three,
here thirty eight percent of vehicle sold in China had
a plug. That's pretty remarkable for the world's largest auto market.
And this is one of the tricky things about predicting
major changes on a consumer driven product is that you're
(06:16):
looking primarily from a technoeconomic perspective to start and thinking
about when do these things become cost competitive and all
these different factors around policy and economics and technology, But
ultimately this is a consumer product. And eventually what happens
is that consumer demand takes over, and that's essentially what
happened in China. We thought that probably wouldn't happen until
twenty twenty five or twenty twenty six, because we were
looking at the technology and thinking, well, this is going
(06:38):
to take a bit longer to get price competitive. But
what has happened is that that happened several years sooner
than we thought, and then adoption just went way up.
I think we still probably got it better than most
out there, but I think it's important to recognize that
it has gone faster than we thought, particularly in China.
In other regions, I think we've got it more accurate.
In Europe, it's about where we thought it would be.
In the US, we've actually overshot it bit sometimes. But
(07:01):
I think the biggest miss is probably just, yeah, the
speed at which this has happened in China, and we're
still watching that. I mean, it continues to go. We're
off to the races, if you will, on EVY adoption
in China now.
Speaker 1 (07:10):
And just so give a little bit of contact on
the numbers here. There were three million electric vehicles sold
in twenty twenty six million in twenty twenty one, ten
million in twenty twenty two, and the forecast from bloomagenif
is twenty seven million in twenty twenty six. Now that's
a global picture, and China dominates in this ecosystem. But
(07:31):
before we get to China, what has all this ev
mania done to oil? Because that's where this transition is
being driven. It is to try and drive down the
consumption of oil. There is clearly a growth in the market,
but has it really dented oil demand.
Speaker 2 (07:49):
It's pretty modest so far, if we're honest. We do
this exercise every year where we look at all different
types of vehicles how much oil they're displacing. And our
estimate right now across all different types and we can
talk about on cars when we talk about buses and
trucks and two and three wheelers, but it's about one
point five million barrels a day. And that's against projection
for global consumption this year of around one one hundred
and three million barrels per day. So it's modest, but
(08:12):
I would say it's growing quite quickly and has the
potential to start to dent oil demand in the latter
half of this decade. I think the important thing to
remember is there's this lag between new vehicle sales, of
which evs are now quite a rising share, about twenty
percent in the most recent month. A vehicle sold globally
had a plug last month, which is quite remarkable.
Speaker 1 (08:32):
Wow.
Speaker 2 (08:33):
Yeah, that's the most recent data, so really really remarkable numbers.
But again, that's the share of the new sales. It
takes a long time for that to flow into fleet.
There's about one point three billion cars on the road globally.
The vast majority of those still have an internal combustion engine.
It's a little over two percent of those that are
fully electric today.
Speaker 1 (08:49):
There's always this interest in knowing when the demand for
oil will peak, and the business of predicting a peak
is hard. And one of the peaks that you did
get right is that in twenty seventeen, the number of
internal combustion engine vehicles sold peaked.
Speaker 2 (09:06):
And that was uncomfortable to call at the time, I
will say, because we made that call in twenty eighteen
and we could sort of see the cycle kind of
turning a little bit, and yeah, we're now down. Internal
combustion engine vehicle sales are now down twenty percent from
that twenty seventeen peak. By twenty twenty five, we think
they're down forty percent, and then there's just no real
route back, right. You got to be a bit careful
(09:27):
celebrating peaks because there have been some missed calls on
this where ten years later something starts to rev up again, and.
Speaker 1 (09:33):
That's happening with cold right now.
Speaker 2 (09:34):
Yeah, yeah, actly. Cole's probably the most famous one of those.
But I'm reasonably confident we've got that right. I can't
really see a route back to growth for the internal
combustion engine. And actually the most interesting place to see
that is the Shanghai Auto Show. You go to the
Shanghai Auto Show and all of the design money, all
of the newest gadgets, all of the coolest looking cars,
(09:54):
all of them, all of them are eb's, all the
Chinese automakers, all of the money, all of the cool projects,
all of the smartest people. They're working on the evs,
they're working on the electric platforms. The IC platforms are
sort of left to wither.
Speaker 1 (10:07):
In case you weren't sure, ICE stands for the internal
combustion engine.
Speaker 2 (10:12):
Even if they're still making up the majority of car
sales today, it's clear that growth is what people want,
not absolute market share, and growth is also what markets
tend to reward, not absolute market share.
Speaker 1 (10:23):
So a lot of the time you're doing this, you're
spending in front of big spreadsheets of data. But on
a day to day basis, what do you drive? What
have you driven that's been crazy? What are the sort
of fun things you've done being the ev guru that
you are.
Speaker 2 (10:37):
Yeah, I think sometimes people think we just get to
go around and drive all these latest supercars or something
we really don't do. I have driven most of the
sort of mass produced models right now. My current vehicle
is a Volkswagen I five, which I bought last summer.
Happy with it, Yeah, happy with it. It's great, five
hundred klometers range, does whatever it needs. When we ever
we do road trips, the kids need to stop and
pee long before we ever have to recharge the cars,
(10:59):
so I've had no issues at all. I'm aware though
that I am. I have home charging in this apartment,
which I think that gets at one of the challenges
is in some places where apartments don't have home charging,
there's still some challenges there to overcome in terms of
getting people to be able to recharge easily.
Speaker 1 (11:14):
Let's say China is the giant when it comes to EV's,
but we should acknowledge you live in Oslo, which technically
is the capital of EV's.
Speaker 2 (11:22):
Yeah, definitely, it's a very high percentage here. I look
out the window and I can see all the new
evs whenever they hit the market, whether it's a Chinese
one or an American one, or a European or Japanese one,
you see them on the road right away here in Oslo,
which is fascinating. There's a huge amount of consumer choice,
and that's because it's a market that went early, that
built a lot of charging infrastructure, and where now ninety
(11:43):
percent of sales are already plugins. This market is kind
of done, essentially, we're now just waiting for the fleet
to turn over.
Speaker 1 (11:49):
China is by far and away the biggest purchase of EV's,
the biggest maker of EV's. Last year, it accounted for
sixty percent of all sales. Why has China been such
a success story, and even more of a success story
than you predicted it could be.
Speaker 2 (12:06):
I think it's been a combination of factors, and they've
all come together quite well. The first one has been
government policy support. So the government has been very clear
from quite early on that it sees new energy vehicles
as which is their term for fuel cell, mattery, electric
and plug and hybrid as the future, and they've supported
different stages of policy to do that. So at the
beginning it was all about pushing government purchasing towards that,
(12:28):
so all the government fleet vehicles and that sort of thing.
Then there was this other phase of pushing the automakers
more strongly into it through its new energy Vehicle credit
system and also city policies, which played a big role
in making it harder for end consumers to buy an
internal combustion engine. You need to get a license plate
in a major Chinese city. That usually involves a lottery
or an auction system, which is kind of unheard of
(12:49):
to people in North America, the idea that you might
have to wait to get a license plate even if
you already have the money to buy a car. But
that's how it works in a lot of the big
Chinese cities because they've been concerned about congestion.
Speaker 1 (12:58):
You can't take our freedoms away in America, can you?
Speaker 2 (13:01):
Yes? Or other places too. I mean, I think if
you told people in Europe that they had the money
to buy a car, but they can't get a license
plate for it, they might get pretty upset as well.
So that has been a big part of it too,
because evs were allowed to go around that in the
biggest cities, and you could get a license plate right
away or at least on a shorter timeframe if you
were putting an EV on the road. So China declared
war on urban pollution, and one of the best things
(13:22):
you could do to clean up urban air quality is
electrified vehicles. So places like Shenjen, you go to them,
they electrified the buses fully in twenty eighteen, all the
taxis a large portion of the passenger vehicle fleet is
now electric. It's pretty clean, and you notice the air
versus some of the other ones that are further behind that,
the air quality is better. So that was a big
part of that, that sort of policy push that factored
in both national, regional and local governments. The other one
(13:46):
is just that the Chinese automakers were never really globally
competitive in the internal combustion engine vehicle market. And if
you look at the biggest economies in the world, if
that's the US, Japan, Germany, all those other ones, had
outsized domestic auto industry that exports to the world, and
China didn't, right, And so they recognize that there's a
window of opportunity there and sort of a focus of
(14:08):
industrial policy to keep that window open and jump through it,
to leapfrog a little bit, and therefore built out a
lot of the supply chain necessarity to do that. So
the battery manufacturing capacity in China is huge. There's enough
batteries manufactured in China this year to more than meet
global ev demand and stationary storage demand. There's actually over capacity,
(14:29):
so that supply chain build up was really important. And
then the last one is just that Chinese consumers tend
to adopt new technologies faster than their counterparts in North
America or Europe. And some of that is due to
a younger average age of the buying population, but some
of that when it comes to cars, I think is
because there's been this huge rise of the middle class
in China and they may not have the same expectations
(14:52):
over many generations of exactly what a car trip might
be or what a car exactly should do. And you
think about if you grew up in North America, maybe
went for a roach of with your grandparents, your parents
in college, and you sort of have this very set
idea of exactly what the car should do for you
and what it should be. There's something in that as well.
With a newly upwardly mobile Chinese middle class. Many of
(15:13):
them are the first car buyers in their family, and
I think that makes them a little more flexible to
adopting new technologies. And that's certainly born out in the data,
this Chinese willingness to adopt new technologies, probably faster and
sooner than in other regions of the world.
Speaker 1 (15:26):
In my book Climate Capitalism, I go through the story
of One Gang, this Chinese science minister at the center
of this concentrated period between twenty nine and twenty seventeen,
when China ended up spending, through one estimate a conservative one,
something like sixty billion US dollars on trying to build
this industry. In that process, it has captured the battery
(15:48):
supply chain. Batteries are at the heart of the electrification story,
and we are starting to see a reaction from other
regions to this dominance. Certainly, batteries have made regions like
Europe and North America sit up and try to do
something about it. How much do you think China's hold
(16:12):
over the battery supply chain could be a hindrance for
the kind of ev growth we need to be able
to meet net zero goals, which we still aren't on
track for.
Speaker 2 (16:22):
Yeah, this is one of the most interesting tensions that's
really come up in the last two years is that
there has been this goal of getting as much clean
energy and clean technology deployed as possible, and that has
hinged on cost reductions, right, and cost reductions have been remarkable,
But now we're entering an era where there are competing priorities.
There is this other priority of where do the jobs go,
(16:45):
and balance of trade and R and D investment and
essentially industrial policy, and in many ways that is supportive
of rapid decarbonization, but in other ways it can run
counter to it. What we're seeing is that we are
going to see more and more regionalization of these markets,
right as countries or regents say, look, we want to
capture more of the economic benefits and not just be
(17:07):
consumers of these technologies. And in the near term, I
think that might increase costs. It's very hard for me
to say that, Look, a battery made in the US
is going to be cost competitive with a battery made
in China, given the scale of inexperience of the Chinese
manufacturing sector. But I think in the long term this
is sort of a race to the top. All of
this money and all of this capital and ingenuity that's
(17:29):
being invested in these regions to try and compete with
China is fundamentally a good thing for the transition, but
it might be a question of sort of a step
or two back to make two or three steps forward.
I often hear this argument that it's done in China
won and it's over, and I totally get where that's
coming from. Our own data suggests, look you look at
the share of solar cell manufacturing, or the share of
(17:50):
battery manufacturing, or all the battery components and raw material refining,
China absolutely dominates. But it is worth remembering that only
about a little over two percent of all cars on
the road today are electric. There is a huge market
still to play for, and we are seeing a lot
of investment in the next generation of battery technologies, so
things like solid state batteries, next generation anodes, sodium ion batteries,
(18:14):
that stuff is still up for grabs. It doesn't mean
China doesn't have a head start, but I wouldn't underestimate
the forces at play once you really get the innovation engines,
particularly in the US going, China has a dominant lead,
but the story's not fully written yet.
Speaker 1 (18:29):
One place where these tensions are showing up is in Europe.
In September, President Ursula vonder Lean announced approbe looking at
whether cheap Chinese evs are flooding the European market and
distorting prices.
Speaker 3 (18:41):
Global markets are now flooded with cheaper Chinese electric cars,
and their price is kept artificially low by huge state subsidies.
Speaker 1 (18:53):
The probe might sound counterintuitive. Surely cheap evs are a
good thing for meeting climate goals. About ten percent of
electric cars sold in Europe are from Chinese owned companies.
Most of the evs are sold by European companies, and
yet the fear is that tens of millions of people
employed by the auto industry will suffer if China continues
(19:14):
to eat a bigger share of the market. That misses
a crucial point. Many of the cars sold by European
brands are already made outside of Europe, So is there
anything to the probe beyond protecting a European car industry
struggling to catch up.
Speaker 2 (19:30):
I think some of this might just be politics. It
might be to show that, hey, we're there to ensure
that European industry is successful. Some of those manufacturers are
little bit behind and then are pushing politicians to say,
we need a grace period. You need to help us
with a grace period to catch up, because we didn't
take this as seriously as we should have. Were a
bit flat footed. And one consistent thing over the last
(19:51):
twenty years is that a lot of automakers opposed steadily
tightening of fuel economy regulations. They always thought to water
them down. And what that meant is that they did
invest as much in electrification, and in the European automaker's case,
a lot of them invested heavily in diesel. But consumers
do want to buy evs and now they are to
be honest behind compared to Tesla and the Chinese automakers.
Speaker 1 (20:14):
After the break, can any other tech derail the success
of electric vehicles? Or are battery powered cars here to stay?
(20:35):
For passenger cars? Are battery electrics the future? Like we
have this hydrogen field, cell vehicle. We have this plug
in hybrid situation going on for some time, but as
you see, it is the future battery electric and nothing else.
Speaker 2 (20:50):
I think the future is electric and plug in on
the hydrogen point, I think that's dead. For passenger cars,
sales are falling. They fell last year. The only market
that's really keep it alive is South Korea, where the
incentives are extremely generous. They're also extremely generous in California,
tens of thousands of dollars available in incentives, and even
then the numbers are very, very modest. Even if the
(21:11):
passenger fuel cell vehicle fleet were to double every three
years from now all the way out to twenty forty,
that's the most optimistic scenario I can come up with,
they would still only be about point two percent of
the global vehicle fleet in twenty forty, So irrelevant from
an emissions reduction point of view, irrelevant from a climate
point of view. Where it's more interesting is within plug
in vehicles. So about seventy five percent of all plug
in vehicles today are battery electrics, but there's still a
(21:33):
decent number of plug in hybrids sold.
Speaker 1 (21:35):
A plug in hybrid is a car with an internal
combustion engine and a battery pack that can be recharged
with an external cable. The car will run on the
battery pack until it's out of juice and then switch
to burning fossil fuels.
Speaker 2 (21:48):
There's still a decent number of plug in hybrids sold,
and the place where that's really interesting is China. So
the plug in hybrid market for a while was driven
primarily by Europe, and it was a compliance market, so
automakers had to meet certain CO two targets for their vehicles.
So you saw this large number of questionable plug and
hybrids with very short ranges. They were able to game
(22:10):
the system a little bit, but people weren't driving them
in electric mode all that often. What's kind of different
about what's happening in China is that there are plug
and hybrids coming out that are not purely designed for
regulatory compliance. They're designed for consumers to actually use them
in electric mode. They have ranges of sort of one hundred,
one hundred and fifty kilometers, and they're often being adopted
in places where the public charging infrastructure isn't that great yet.
(22:32):
I genuinely think that we are going to all electric
in the twenty thirties. I think the twenty twenties there's
still an interesting role for plug and hybrids to play.
The other segment that I would just highlight there is
that it's proving a little bit difficult to fully electrify
the biggest pickup trucks in North America, the Chevy Silverado,
(22:52):
the F one fifty. These are big trucks, right You
need a very big battery pack. It's challenging right now
with the economics where they are today to make that
fully cost competitive. Maybe Tesla can do it with the
cyber truck, but I would say actually in North America,
it would be beneficial if somebody started offering a really
good plug in hybrid mid sized pickup truck that could
(23:12):
get one hundred, one hundred and fifty kilometers a range
in all electric mode and could be priced in that
sort of forty to fifty thousand dollars range instead of
that sixty to seventy which is where a lot of
the big electric pickup trucks are coming in.
Speaker 1 (23:22):
Looking at the innovations and sticking to passenger cars, you
talked a little bit about batteries and how getting faster
charging batteries, higher energy density, which is essentially same battery
but longer range and of course lower cost are crucial.
But what other innovations in the EV sector are you
looking out for and that would make this transition go faster.
Speaker 2 (23:44):
One of the ones that's kind of underappreciated is that
we're just now at the stage where a lot of
the large manufacturers have dedicated battery electric vehicle architectures where
they've built their evs from the ground up, and that
just enables better performance, better integration, better efficiency. You can
move to a higher voltage architecture which allows for much
faster charging as well, as you see some of these
(24:04):
latest vehicles coming out capable of a three hundred and
fifty kilowat charge, some even higher, which means you'd get
into that sort of fifteen minutes to get from twenty
percent to eighty percent of the battery. That's a pretty
quick stop at that point. It's not gasoline, but by
the time you stop and go in and get a coffee,
that's enough. Interestingly, we're also seeing and this gets a
bit away from the EV part of it, but we're
seeing more and more of the automakers use their evs
(24:27):
as where they put their newest other tech, so their
vehicle connectivity, their autonomous driving features, heads up displays, all
these cool things. They're putting them in their evs first
as a way to make those vehicles more attractive, and
then they will diffuse them out to their other vehicles.
And that's actually quite a fascinating strategy because then those
become the cool, tech rich vehicles where the newest stuff happens,
(24:50):
and the people who maybe didn't care as much about
the electric drive train but want access to that tech,
they're buying those ones because that's where you find the
latest lane keeping assist or a mamatic emergency braking, or
level three autonomy, all these newer features that are starting
to come out. So I think that's actually quite an
interesting trend to watch too, is that more and more
of that is being stuffed into those evs.
Speaker 1 (25:10):
Will we ever see an EV that charges as quickly
as it takes to fill up a petrol car.
Speaker 2 (25:16):
No, I don't think you will, and I don't think
that's the right goal either. Even if you could from
the battery point of view, and it would take a
lot of engineering to do that, the grid connection, you
would need to do that for multiple vehicles at a
time would be astronomical and you would risk damaging the
battery to do it in this sort of a few
minutes timeframe. But again, I don't think that's what you need.
(25:36):
And if you look at the data on where people
are charging, most people are still doing most of their
charging at home, so we don't need to replicate the
existing refueling infrastructure in the exact way. Is because most
of the energy delivered to the car is going to
come when the car is stationary. I think you will
see more vehicles moving towards the capability to accept a
higher charge, but I don't think it goes up forever.
I think there's diminishing returns on making a vehicle capable
(25:59):
of thing that the chargers and the grid themselves are
not capable of.
Speaker 1 (26:03):
Now, you mentioned that big SUVs and these pickup trucks
in the US are really hard to electrify, not because
there is no technology to do it, but because of
the amount of batteries that need to go in it,
and the price of batteries still is high. So should
we just be pushing for smaller cars?
Speaker 2 (26:19):
Yes, I mean unequivocally yes, It's always been better from
an environmental point of view to drive a smaller vehicle.
That's still true in the EV world. Just because we
switch to electric drive trains, it doesn't mean that everyone
should everywhere drive the biggest vehicle they can. A small
vehicle is still better. An EV is still is better
than a combustion vehicle. But we should be both pushing
for smaller lighted vehicles and electric vehicles at the same time.
Speaker 1 (26:42):
The electric vehicle story from a car perspective has been
going gangbusters, and yet we are still behind on net
zero goals. So what do we need to do to
get the passenger car sector to get on track? Policy
banning the sales? What are the tools in the r
and all that need to be thrown at this?
Speaker 2 (27:02):
Yeah, so that's an important point that you've made. We're
not on track. So even though it's gone really quickly,
we're not on track for the net zero scenario. The
net zero scenario is that pretty much for passenger car sales,
you need to phase out combustionion vehicle sales fully globally
by around twenty thirty five, and even that requires some
early retirement of vehicles in the twenty forties to get
some off the road. And that's just because vehicles last
roughly fifteen years. So if you say net zero by
(27:22):
twenty fifty, net zero vehicles only by then you need
to work back to that. So I think you do
need a stronger policy push. Still, it's very encouraging to
see things like the Inflation Reduction Act, which are putting
significant dollars towards driving more ev adoption in the US,
and also supporting federal funding for charging infrastructure in the
US is really starting to flow now. So whenever we
(27:46):
talk about the scenarios for what happens in the future,
it's important to say what policy does this assume. What
we call our economic transition scenario assumes no new policy,
because I'm not in the business of forecasting whether Trump
or Biden or going to win the next election and
what policy platforms they might roll out if they do.
But policy really matters, And what you can safely say
(28:08):
is that in places where there is no supportive policy,
there's very very little ev adoption, and in places where
there's a lot of policy, there's a lot of ev adoptions.
So you do still need a stronger policy push. I
think you need a few more automakers to come off
the fence a little bit more, particularly the Japanese ones.
And also we shouldn't absolve them of responsibility that many
of them lobbied against or sued the California government over
(28:29):
the zeromissions vehicle mandate in Toyota's case, so they're not
blameless in that. Also, I do still think there's a
big role for continued R and D investment in the
technologies that enable this, because a breakthrough on next generation
battery chemistries could make this all go faster. We're seeing
a lot of rumblings right now in sodium ion batteries.
So far it's looking like it's going in probably cheaper
(28:49):
cars or two to three wheeled vehicles, but a big
advance in another battery chemistry could blow this wide open.
And I think we shouldn't stop investing in that because
the route from laboratory and science through to engineering and
manufacturing is still take some time. So I think that's
another area where you should continue to see a big push.
Speaker 1 (29:08):
Do you think the success of electric cars sort of
distracts from bigger debates that we need to be having
around encouraging less car use and more public transport use,
and whether governments are directing their subsidies, subsidies which are
necessary for this transition in the right places. Today.
Speaker 2 (29:28):
This is a tricky question. And the longer I spend
with data on global emissions from transport of all types,
the more I'm sure that you kind of need all
of the above. So when you talk to the urbanist crowd,
they say, look, no, evs aren't the solution. It should
all be active transport and public transport. When you talk
to the pure car people, they're skeptical of those things.
(29:48):
You need all of the above. You absolutely need more
public transit, you need more active travel, you need more
urban density so that people don't have to move around.
You probably need congestion pricing, and you need over a
billion electric and you shouldn't avoid that. Policymakers should not
avoid that conclusion. You need all of it. But you
do need over a billion electric vehicles on the road.
And that's just because we've left this pretty late, like
(30:10):
we there's not a lot of time to get global
emissions under control. And even in places where you have
huge amounts of active transport, and again this isn't to
disparage those, but take the Netherlands. The Netherlands is probably
the most famous example of cycle friendly country. It's got
great infrastructure, it's got great cycling culture, great supportive policy.
Over many years, it's about nine percent of all kilometers
(30:33):
traveled are by bicycle. In the about seventy percent are
by car. And the Netherlands is small, rich, densely populated, temperate,
and again has this culture of cycling. So that's got
to be the upper bound for a place like the US.
It's just not that easy to do that to achieve
that same level of cycling adoption in other countries. So, yes,
(30:53):
you need more active transport, you need all these things,
but you do need a lot of electric vehicles as well.
Speaker 1 (30:57):
You're going to break Oscar Boyd's heart as a producer
on zero who's obsessed with biking.
Speaker 2 (31:03):
I should just say that is how I get my
kids around the city. I have a bicycle and a buggy.
I take two kids, drop them off at nursery every day.
That's how I get around. Big believer in active transport.
It's just we need to be realistic about what each
thing can contribute in terms of global CO two emissions reductions.
Speaker 1 (31:21):
When will there be more electric vehicles on the road
than fossil fuel powered cars.
Speaker 2 (31:27):
When it comes to the passenger vehicle segment again, because
it takes a long time to turn over the fleet,
even when new sales largely go electric. In our economic
transition scenario, it's about twenty forty one before evs are
the majority of passenger vehicle cars on the road.
Speaker 1 (31:40):
Globally, we'll be old men by that time. But time,
I'm going to hold you to it and come back
to you in twenty forty one and then be like,
how wrong will you?
Speaker 2 (31:47):
I'm happy to be proved wrong. I will say. My
desire to see urban air quality improved and to see
rapid decarbonization is much much stronger than my desire to
be right about any of this.
Speaker 1 (32:06):
I've always lived in cities, so I don't really drive
all that much, and yet I cannot stop thinking about
electric vehicles for all the reasons Colin mentioned. They are
a huge part of the energy transition, and there's so
much new tech going into making these cars better and
more efficient. Cars are only half the story, though. Join
us for a future episode of Zero, where we'll hear
(32:28):
from Colin about how other forms of transport are being electrified.
The good pits and the ugly ones. If you'd like
to dig deep into the subject, I have a book
coming next week called Climate Capitalism, and it has two
chapters exploring China's EV revolution, one of which follows the
career of One Gang, who was China's Minister for Science
and Technology during much of that early EV boom. If
(32:50):
you'd like to learn more about that and other stories
of climate action, check the show notes for a link
where you can pre order the book. Thanks so much
for listening to Zero. If you like this episode, please
take a moment to rate and review it, Subscribe on
Apple Podcasts or Spotify. Send it to a friend or
someone with range anxiety. Get in touch at zero pod
at Bloomberg dot Net. Zero's producer is Oscar Boyd and
(33:14):
senior producer is Christine driscoll Our. Theme music is composed
by Wonderly Special Thanks as always to Kira Bindram i'm Akshadrati.
Back next week.
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