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While automakers are ramping up development on electrification, it's still such a hard sell it needs government intervention to survive
by David Booth | August 4, 2017
Governments across the world are planning to ban fossil-fuel cars in the next few decades.Amber Bracken
It's been a really good week – actually month – for automotive electrification. For one thing, Tesla recently delivered the first examples of its much-vaunted Model 3 to the first of what it hopes are 400,000 reliable hand raisers. Now never mind that the Silicon Valley's automotive disruptor is going to lose money on every Model 3 it builds and that potential customers are already complaining about the Porsche-like costs of some of its battery upgrades, but no less than Motor Trend wrote glowingly — "the most important vehicle of the century" said reviewer Kim Reynolds — of the Model 3's performance.
And, of course, who can forget Volvo's bold pronouncement that all of its vehicles – every last single one of them – will be "electrified" by 2019. Now, never mind that most of the mainstream media – and a scary number of automotive journalists who should have known better – interpreted this to mean that every Volvo off the production line would be a Tesla-like battery-powered electric vehicle (instead of the cost-conscious 'mild' hybrid that will be the preponderance of its products), it was still a huge commitment by a major player to curb, if not quite eliminate, the emissions of the internal combustion engine. As expected, other automakers know good public relations when they see it and are rushing to follow suit. Already BMW has committed to (sort of) the same ideal, stating that every one of its model lines will have at least one again-electrified-not-electric powertrain by 2020.
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Nor is this the only expansion into electrification. With a bit of bold planning – and a little help from the race stewards – Audi won this year's Formula E driver's championship, cementing the deal on the final race right here on the streets of Montreal at last week's ePRIX. Nor does this represent just a sideline on Audi's part, the company having announced that it is withdrawing from the World Endurance Championship (think 24 Hours of Le Mans) which it has dominated for the last decade and a half in favour of committing completely to Formula E. "We're going to contest the race for the future on electric power," said Audi's chairman of the Board of Management, Rupert Stadler, in the announcement of the change in focus. Porsche is likewise pulling out of LMP1 and Mercedes-Benz out of Deutsche Tourenwagen Masters – you know it as DTM – in favour of fielding Formula E teams by 2019.
All of this comes hot on the heals of Bloomberg New Energy Finance's estimates that, as soon as 2025, electric vehicles will be cheaper to buy than conventional automobiles. Not in the total cost of ownership – i.e. factoring in 10 years of buying fossil fuels instead of electricity – but in base MSRP, claiming that even without subsidies, incentives and all the other various breaks that EVs are promoted with, electric cars – all the way from Mitsubishi's little i-MiEV to Tesla's range-topping Model S – will be cheaper than their gasoline-fueled equivalents. Now never mind that, according to the same study, batteries account for about half of the cost of an electric vehicle or the optimism behind the research's pronouncement that the price of lithium-ion technology will fall by some 77 per cent in a little more than a decade, this is huge news. No, it doesn't solve the range anxiety issue, but it would mean EVs would finally be cost competitive with conventional cars.
But, the recent push for electrification has probably benefitted most from Dieselgate and the ensuing diesel cartel scandal. One can argue the origins of diesel's dilemma – rapacious automakers or European governments deliberately turning a blind eye to their malfeasance – but there can be little doubt that the recent talk on banning internal combustion from various cities is, if not a direct result of the scandal, certainly encouraged by it. Many European cities have long been attempting to ban diesels from their city core, all to little avail. Now, even Stuttgart – Porsche and Mercedes-Benz's ancestral home – is making a bid to ban oil burners from its streets.
The really big news, however, is that both France and the UK, emboldened by never-ending news of emissions cheating, have decided to ban the sales of all internal combustion engines by 2040. To be clear, that's a ban of all new gasoline-fueled motor cars; not just diesels. Such has been the constant litany of unsavory news from Europe's automakers since September 18th, 2015 that French and British consumers will no longer be allowed to buy internal combustion at any price in 23 years.
It is these last bans that beg some basic questions, however. Proponents of electrification have long claimed a populace eager to embrace automotive EVs, claiming, that once issues like costs, availability and mainstream automaker support were reckoned with, simple economics would favour electric vehicles so assiduously that gas cars would quickly become a tough sell. Recall that, just recently, Tony Seba, of RethinkX, claimed that there will be no gas or diesel cars, trucks or buses for sale by 2025.
So here's my question(s). If the momentum really is so much in electrification's favour, if the price of electric vehicles is to drop so precipitously (giving them a huge advantage of the total cost of ownership) and if there is indeed such a pent-up demand for EVs, why then did the French and British governments need to ban internal combustion engines? If all the prognostications on the media be true, would not the laws of supply and demand simply render internal combustion obsolete long before 2040? Electrification protagonists have long proclaimed EVs the natural progress of transportation – just as the automobile was the inevitable evolution of the stagecoach – but I don't remember governments having to ban horses to make cars popular.
Methinks EV advocates may lack the courage of their own convictions.
David Booth
Internal Combustion Vehicles
Mercedes-Benz International Inc.
New Energy Finance Ltd.
Rupert Stadler
Tony Seba
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