Hello friends! Here’s my monthly take on the five most interesting developments in future fuels and vehicles trends. Items I selected include:
1. International Transport Forum (ITF): ITF Transport Outlook 2019 ― Earlier this month the ITF released its annual Transport Outlook 2019. Key findings include:
2. Emission Analytics: Hybrids Are 14 Times Better Than Battery Electric Vehicles At Reducing Real-World Carbon Dioxide Emissions (Hat Tip: GreenCar Congress) ― Mass adoption of hybrid vehicles, rather than low-volume take-up of full battery electric vehicles (BEVs), is the most effective solution to cutting CO2 now and also in meeting 2030 emission targets. Through extensive real-world testing of EVs, Emissions Analytics found that hybrids, whether in gasoline or diesel form, offer the highest CO2 reduction per kWh across all electrified powertrains.
Using mild, full and plug-in hybrid real-world emissions test data from both European and U.S. vehicles, Emissions Analytics compared hybrids with their internal combustion engine equivalents. Using its standardized on-road cycle, the company determined the average CO2 reduction from hybridization was 23% for the EU and 34% for the US, with an average of 30% across all pairings.
The company then calculated the distance-specific CO2 reduction per unit of battery size (capacity), in g/km/kWh, for mild, full, plug-in hybrids and BEVs. The results indicated that mild hybrids are the most efficient way to reduce CO2, given limited global battery capacity. With a reduction of 73.9 g/km/kWh, the technology was a clear favorite, with full hybrids coming in second at 50.5 g/km/kWh. Due to their disproportionately large batteries, BEVs were the worst of the available options, with a 3.5g/km/kWh reduction.
If not BEVs, what then? Emissions Analytics outlined two potential paths that are immediately available. One is a switch from gasoline to diesel, reducing CO2 by 11%, coupled with a mild hybrid system, providing a further 6% reduction. A final swap to full hybrids would deliver an addition 16% reduction for a 34% total. Alternatively, switching directly from gasoline to gasoline mild hybrids provides an 11% reduction, with a further 23% from the move to full hybrid.
The EU’s post-2021 CO2 reduction target for passenger cars is 37.5% by 2030. Emissions Analytics tests shows that, even with current technology, widespread hybridization would achieve more than three-quarters of that target. Moreover, given a decade of further advances and innovations, it is possible that the goal could be met without the need for BEVs at all, Emissions Analytics says. Beyond the 37.5% reduction target, more extensive electrification would be required to bring whole fleet emissions down. The company notes:
“The ideal solution is an immediate transition to petrol and diesel hybrids, with a further decade spent refining the technology, infrastructure and battery supply chain to allow the adoption of BEVs. By 2030, the EU and the U.S. would have had another decade to develop expanded, cleaner electricity generation capacity, improving the lifecycle emissions of BEVs. Alternatively, by 2030 the availability and price of renewable energy may well fall to a level at which hydrogen fuel cells could be economically viable. These avoid the environmental and geopolitical issues caused by largescale battery production and would likely offer even lower lifecycle emissions. The overall message is this though: it is paramount that governments and industry take into consideration real-world data when promoting technologies to efficiently reduce CO2.”–Emission Analytics
3. NHK World Japan: Japan to Require 32% Higher Gas Mileage ― The Japanese government wants automakers to improve fuel efficiency standards by over 30 percent by fiscal year 2030. New regulations from the transport and industry ministries to be finalized next year will require average mileage for all new vehicles sold in the country to surpass 25 kilometers per liter (58 miles per gallon) of gasoline by March 2031, 32 percent higher than around 19 kilometers (about 45 miles per gallon) in fiscal 2016. The government wants such electric, hybrid (and presumably hydrogen fuel cell) vehicles to account for 20 percent of all new car sales by fiscal 2030, up from 1 percent currently, and these regulations will help achieve that target. Japan joins the EU and China in setting very stringent fuel economy standards over the last couple of years.
4. China Daily Mail: China’s Electric Vehicle Industry Hit Hard by Policy Shift As Beijing Turns Toward Hydrogen Fuel ― It was a 2018 visit by Chinese Premier Li Keqiang’s visit, in particular to Toyota, that apparently changed his viewpoint on EVs. Upon his return to China, several ministries and commissions quickly assembled a team to develop hydrogen fuel-cell technology, the first signal that China’s policymakers would make the fuel cells a major R&D project, according to this story from China Daily Mail. And they moved fast.
On March 15, China’s cabinet-like State Council publicized 83 amendments to its annual Government Work Report delivered before its rubber-stamp legislature. Among them was a provision to promote the construction of infrastructure related to electric and hydrogen fuel-cell technology. At the time, there were no additional policy details, but it was the first time that hydrogen fuel was included in the report.
On March 26, China’s Ministry of Finance, Ministry of Science and Technology, and other agencies jointly announced changes to the EV subsidy program, slashing subsidies by 67 percent. EVs with driving ranges of 400 kilometers (250 miles) and above will be cut by half, to 25,000 yuan (US$3,700) per vehicle, from 50,000 yuan. And to qualify for any subsidy, EVs need to have a range of at least 250 kilometers, compared with 150 kilometers previously. Subsidies for EV vehicles will be phased out completely after 2020. And, on April 11, the state-run, English-language newspaper China Daily reported that the central authorities’ development plan for hydrogen fuel technology set targets of getting 5,000 hydrogen energy vehicles on the road by 2020, 50,000 by 2025, and 1 million by 2030.
Meantime, Chinese car sales are sliding, according to a report in Quartz. Even NEV sales declined in May 2019. To stem the decline, on June 6, China’s central government said local governments can no longer issue restrictions on purchases of NEVs, nor limit the times when they can be on the road. Cities where such restrictions already exist have to phase them out. Seven cities presently have such rules, including Beijing, Tianjin, Shanghai, Hangzhou, Guangzhou, Shenzhen and Guiyang. The restrictions have created years-long wait list to own a vehicle (up to eight years, in fact). By lifting the restrictions, and reducing the wait lists, the government hopes to stimulate more car sales. If China’s seven largest cities lift caps by 50% it could boost auto sales by a quarter of a million units this year, the article notes. But if current sales trends continue—the first four months of the year saw a decline of about 10%—China could see three million fewer sales than last year.
5. The Conversation: Driverless Cars Are Going to Disrupt the Airline Industry ― This article discusses a recent paper on autonomy and commercial airlines. In the past, commercial airlines and automobiles have shared a symbiotic relationship and rarely competed directly with each other except for very short flights. However, the authors of this paper found that with driverless vehicles on the horizon, many of which will be made available to the average American consumer in the coming years, “the airline industry may find that they are now facing a competitor that is unlike anything they have seen in the past.”
The authors analyzed some of the issues that the airline industry will encounter, and provided consumer survey data that shows that at least 10% of the flying public will switch to driverless vehicles once they realize the advantages that driverless cars offer over commercial flight. These numbers may snowball, the authors say, as the airline industry contracts.
The authors, in their analysis, showed people trips of different lengths and asked them to choose whether they would rather drive themselves, take a flight or ride in a self-driving car. The figure below reflects those results.
In general, the data indicated that people always preferred driverless vehicles over manual driving. Taking a driverless car got even more attractive if people were told that after flying, they would need a rental car in their destination city. As trips got longer, people were increasingly likely to prefer flying, but self-driving cars were still a compelling option. On the longest trips the authors asked about, with a 45-hour drive, only about one in 10 people preferred driving themselves – but that changed to one in six when the option was to have a car drive itself. The problem wouldn’t just be customers who chose not to fly. Some passengers might split trips between self-driving cars and airplanes, which would further reduce airlines’ revenue.
Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.