Europe’s Chance To Sprint Ahead On Electric Vehicles

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The European electric vehicle market has been hot. Now it has the opportunity to truly speed ahead of the pack.

“The European Commission is set to revise the car CO2 regulation in June,” Alex Keynes of Transport & Environment (T&E) reports. More aggressive regulation will make Europe look like Usain Bolt in the global EV market. Less aggressive regulation could have the continent fall behind China again. Which will it be?

EU-based T&E wants Europe to be the leader in this market (naturally), and it has published a report showing how it sees that happening.

If you’ve been following the electric vehicle market much at all in the past year, you know that European EV sales jumped through the roof in 2020. Plugin vehicle market share quickly rose to above 10% in the region. That’s thanks in large part to the 2020/21 EU car CO2 target of 95 g/km going into effect. The results should be even greater in 2021, with widespread expectations of 15% market share or so. (How surprising it is that EV sales skyrocket when automakers and dealers actually make the vehicles available!)

“This shows that once carmakers supply adequate models and market these effectively, consumers and companies alike are happy to purchase them. The current car CO2 targets have brought much investment into the automotive transition, including creating a market for dozens of battery gigafactories across Europe. Today it is not just a climate law, but a modern-day industrial policy,” T&E writes.

“But the growing EV market masks many regulatory flaws and failures to cut emissions, such as the growing CO2 emissions from new cars prior to 2020 and the push by some carmakers towards suboptimal plug-in hybrid technology. The biggest risk is that the EV momentum could stagnate between 2022–2029 unless the current post-2020 standards are strengthened. The 2021 review is therefore necessary and timely. To ensure the regulation establishes Europe as an emobility leader, it should:

    • Accelerate the transition to zero emission cars now: Increase the 2025 CO2 target to at least -25% (below 2021 levels) and raise the 2030 target to -65%. Additional binding targets should be set in between (e.g. in 2027) to ensure continuous investment and CO2 improvement.
    • Set a long-term zero emission goal: Building on the momentum in many countries and cities, policy makers should set an EU-wide phase-out date for the sale of new cars with internal combustion engines, no later than 2035, flanked by a European automotive transition fund.
    • Improve the regulatory design:
      • 1. Remove the ZLEV benchmark as soon as electric car sales reach 25% (and remove the 0.7 multiplier, that benefits CO2-emitting plug-in hybrid vehicles, immediately);
      • 2. Set stronger provisions to use fuel consumption meters for real-world CO2 enforcement;
      • 3. Delete the OEM-specific mass adjustment of the target;
      • 4. Cap CO2 emissions from conventional internal combustion engines at 2021
        levels to avoid any further weakening of the regulation as EV sales rise.
    • Resist pressure from the oil & gas industry to weaken the regulation via fuel credits for alternative fuels, and ensure engines and fuels continue to be governed in separate tailored laws at EU level.”

Good ideas. How many will the EU implement?

Before moving on, I think it’s worth emphasizing how important such regulations are. Outside of Teslas, the US had almost no electric vehicle sales in 2020. In 2019, Europe had just a few percent of auto sales coming from electric vehicles. By the end of 2020, the monthly figure was 23% for plugins and 14% for full electrics, with the yearly total coming to 11% and 6.2%, respectively. Consumers were clearly happy to buy electric vehicles, eager to. Consumers in the US and European consumers in 2019 had very limited options, though. In 2020, automakers were forced to actually produce and try to sell them in Europe, though — or pay large fines. At long last, we saw what happened when automakers put in some effort. Consumers bought electric vehicles. EV market share didn’t rise to the heights it rose to in Europe in 2020 due to Tesla’s nearly market-leading Model 3 or yet-to-arrive Model Y. It rose so high because almost every automaker broadly offered multiple compelling electric vehicles and told dealers to actually sell them — because EU policymakers made them stop dragging their feet.

This is political leadership. And we all need much more of it.

2020 was great, but we need to go much further, and that’s where the coming car CO2 regulatory review comes into play. “The 2021 review of both the ambition and the regulatory design of the car CO2 standards will determine whether or not there is sufficient electric vehicle supply and how quickly EU carmakers move away from suboptimal combustion engine and transition technologies towards future-proof zero emission vehicles,” T&E writes. “This is Europe’s chance to win the global e-mobility race.”

Indeed.

Graph courtesy T&E report.

 
 


 


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