Better batteries, lower prices, self-driving, new business models – France and Britain are being conservative with 2040 deadline
So, Britain is “banning” the sale of gasoline and diesel vehicles by 2040. France announced a similar intent several weeks ago. And both stories were somehow conflated by many media with Volvo’s much ballyhooed declaration that starting in 2019 all of its cars would have an electric motor to mean that the gasoline-powered car is dead. Sorry, cancel the funeral. While electric vehicles will almost certainly displace internal combustion engine vehicles (ICEV) one day, that day is not coming any time soon..
Why? Because the pace at which technologies are adopted is influenced by many factors, including costs, public policy, consumer value, and so on. Sometimes those factors act as “accelerators,” speeding up adoption, and sometimes they act as “constraints,” slowing adoption.
On balance, constraints like high purchase price, short ranges, lack of model choice, and market inertia currently favour ICE cars.
But there are big changes coming to both EV technology and transportation business models that will eventually favour accelerators over constraints.
On the technology side, new battery chemistry like Lithium-metal or Lithium-sulphur with four to 20 times the energy density of Lithium-ion should begin to hit the market in 15 or 20 years. They’re currently being developed in laboratories in the United States, China, and Japan, and will require another decade or so before they’re ready to be commercialized. Tack on another five to eight years for automakers to design them into vehicles.
Imagine a Tesla Model 3 that travels 6,000 kilometres between charges, provides 1 million miles (1.6 million kms) of service, requires minimal to no maintenance or repair, and is fuelled by cheap electricity generated by the owner’s rooftop solar panels (or utility-scale wind or hydro or tidal or some other low-carbon emitting form of power).
That’s the future Britain and France are contemplating in 2040 and it’s looking more and more like a safe bet.
In fact, one could argue that Britain and France are being pretty conservative.
The UK’s proposal seems to be linked to five “clean air zones” rather than a blanket prohibition for the country.
And both countries are talking about banning the sale of ICE cars, not their ownership. Since the average ICE car’s life is 15 years, and that’s likely to rise going forward, replacing all the ICE vehicles in the national fleets will probably take another 20 to 30 years.
Now we’re talking about 2060 or 2070 before EVs replace ICEVs in France and Britain.
But changes on the business model side may accelerate the transition to EVs.
Stanford lecturer Tony Seba released a study in May that estimates the cost of a mile travelled in the United States will drop by a factor of four to 10 times when the Transportation as a Service model is introduced by companies like Uber, Lyft, and some of the automakers in 2020.
What will make TaaS revolutionary is the perfection of autonomous driving technology, which increases utization rates for vehicles from four per cent to 40 per cent, perhaps even as high as 80 per cent in busy metropolitan markets.
Seba thinks Level 5 fully autonomous EVs will be available in 2020 and by 2030 TaaS will account for 95 per cent of American miles travelled and consumers will have for all intents and purposes abandoned the private ownership of cars.
For Western countries like France and Britain, this is an attractive option.
In huge mega-cities like Paris and London, TaaS may be able to significantly reduce pollution and traffic congestion while helping national governments meet Paris Climate Accord commitments.
The experts I interview about EVs think Seba is far too optimistic about self-driving tech. Kyle Landry of Lux Research thinks AEVs won’t be available before 2025 and probably closer to 2030. Turns out creating machines that can react as well – or better – than humans to all the road conditions and driving situations is difficult.
Not impossible, but complex and time-consuming.
Experts like Landry, Dr. Fred Beach of the Energy Institute, and Sam Abuelsamid of Navigant Research tell me the most likely scenario is that TaaS will be adopted early by the big cities, where it solves real world problems for consumers and local governments, and the private ownership of EVs or AEVs will be the rule outside the metropolises.
That process will probably start around 2030 and be well under way by 2040 in Europe, Canada, the United States, China and other Asian countries. Adoption will start later and take longer in less developed economies.
If that scenario plays out, then France and Britain are hardly ahead of the curve.
Oh, and the significance of Volvo’s announcement? I asked Chris Robinson, EV analyst for Lux, for his opinion:
I don’t think it’s a game changer. Volvo didn’t announce it will stop using internal combustion engines (it will still use them), rather that all vehicles will be at least equipped with 48 volt mild hybrid systems. 48 V systems, while not currently used widely, are expected to gain significant traction over the next five years in Europe and China as automakers strive to meet emissions and efficiency requirements. It’s not an entirely bold claim to say you are moving to 48 V on all vehicles – it’s earlier than their competition but the automotive industry seems to be moving in that direction. Looking at what Volvo did announce about full EVs, that is five models released between 2019 and 2021, it’s an aggressive target from a smaller company, but also only a few years ahead of what others like Daimler or Volkswagen have announced publicly.
As a rule of thumb, readers should keep in mind that the EV industry is rife with hype and exaggerated claims these days.
But also keep in mind that the hype is an exaggeration of real tends in the technology. The timeline of the forecasts from Seba and boosters like Bloomberg New Energy Finance may be unrealistic, but competitively priced EVs with much better batteries and autonomous driving capability are on the way.
France and Britain are betting the new tech will arrive no later than 2040. That’s not an outrageous wager.