BNEF Predicts Electric Cars Will Account For More Than Half Of All New Car Sales By 2040

Bloomberg New Energy Finance has a new prediction about electric cars — they will account for more than half of all new car sales globally by 2040 and account for a third of all light duty vehicles on the road. The latest report was put together by an advanced team of BNEF analysts and takes several factors into account. Its predictions are significantly more optimistic than the last BNEF report just one year ago, which projected sales of electric cars would reach 35% of the market by 2040.

It’s The Economics, Stupid

First and foremost, the experts expect the price of batteries, electric motors, and other components for electric cars to continue falling as volumes increase. By contrast, tougher emissions rules may actually result in higher prices for internal combustion engines as they struggle to remain relevant in a changing world. Another factor is that electric cars have lower lifetime operating costs than conventional cars.

Yet another matter is the number of mainstream manufacturers who are rushing new electric cars to market. Just this week, Volvo announced that all its new cars will have a battery and electric motor by 2019. Mercedes, Audi, and Volkswagen are hot on the electric cars trail as well.

Chevrolet will have the new Chevy Bolt on sale in all 50 states within a few weeks and has a backlog of orders in Norway and South Korea. Don’t discount the Chinese auto companies. They sell few cars in the US at present (and may sell none if President Tweet has his way) but they have every intention of exporting to global markets in coming years. If the BNEF prediction is correct, the world will use 8 billion fewer barrels of oil in 2040 for the transportation sector while global demand for electricity will grow by 5% from today’s level.

A Momentous Inflection Point

Colin McKerracher, is the leader of the advanced transport analysis team at BNEF. He says, “We see a momentous inflection point for the global auto industry in the second half of the 2020s. Consumers will find that upfront selling prices for EVs are comparable or lower than those for average ICE vehicles in almost all big markets by 2029.” That inflection point will be similar to the stunning drop in prices for renewable energy in the past several years. Renewables are now less expensive than coal, oil, natural gas, or nuclear power in many parts of the world and getting cheaper almost by the hour.

The BNEF forecast predicts EV sales worldwide will grow steadily in the next few years, from 700,000 in 2016 to 3 million by 2021. At that point, they will account for nearly 5% of light duty vehicle sales in Europe, up from a little over 1% now, and around 4% in both the US and China. While that is good news, the analysts expect big changes will begin near the end of the next decade when the purchase price of electric cars falls below that of conventional cars.

Countries that have made early progress in the sale of electric cars, such as Norway, France, the Netherlands, and the UK, are expected to be among the leaders in 2040. Emerging economies such as India are not expected to see significant EV sales until late in the next decade, despite that country’s pledge that all new cars sold there will be electric by 2030.

Jon Moore, chief executive of BNEF, said that the growth in EV market share “will come about during a time when the power system is also undergoing a revolution, towards cleaner, more distributed generation. This means that not only do EVs surge, but their emissions profile improves over time.”

BNEF’s forecast is based on analyzing the relative economics of electric cars and conventional cars. It assumes that current incentives will continue until their scheduled expiration date but does not assume the introduction of any new incentives. BNEF analyzed the automobile market not just by country but also by market segment, including everything from small sedans to SUVs and large family cars.

Infrastructure Lags

Salim Morsy, senior analyst on BNEF’s advanced transport team and lead author of the report, commented, “There is a credible path forward for strong EV growth, but much more investment in charging infrastructure is needed globally. The inability to charge at home in many local and regional markets is part of the reason why we forecast EVs making up just over a third of the global car fleet in 2040, and not a much higher figure.”

The team included the rise in autonomous vehicles and ridesharing in their calculations. It believes the impact of autonomous driving will be limited in the next 10 years but will play an increasing role in the market after 2030. By 2040, it forecasts 80% of all autonomous vehicles being used in ridesharing service will by electrics due to lower operating costs.

Source: Bloomberg New Energy Finance

Nissan e-Power Could Replace Diesel In Europe Says Ghosn

Last week, Nissan unveiled its new e-Power technology. It has a battery and a 1.2 liter 3 cylinder gasoline engine borrowed from the Nissan Micra. It also has a small battery — just 1/20 the size of the battery in the Nissan LEAF. The beauty of the e-Power system is it is compact enough to fit into almost any small car. The battery slides under the rear seat where it doesn’t take up precious passenger or cargo space.

The e-Power package is a series hybrid, unlike the Toyota Prius, which is a parallel hybrid. What’s the difference? In the Prius, the gasoline engine and the electric motor are both capable of sending power to the driven wheels. With e-Power, the gasoline engine is there solely to provide electricity for the electric motor and to recharge the battery.

That means the engine can be tuned to operate at its most efficient speed. It also means Nissan doesn’t have to pay Toyota any royalties or licensing fees. Lastly, it means the control systems for the package can be simplified, since it is not necessary to coordinate the operation of the gasoline engine and electric motor the way the Prius system has to.

Unlike most hybrids today, the e-Power system has no plug. The onboard engine takes care of keeping the battery charged so there is no need to plug in. The system is currently being demonstrated in a Nissan Note, a compact car that looks like a smaller version of the forthcoming Chevy Bolt. A Nissan spokesperson tells AutoBlog  the Note e-Power is currently only for Japan and the car was specifically designed for that region and its urban driving habits.

That may be so, but yesterday, Nissan CEO Carlos Ghosn said the new powertrain could potentially become an alternative to the ubiquitous diesel engine in Europe. The Continent bit hard on diesels after the oil embargoes of the 1970’s. Diesels are more efficient than gasoline engines, so governments all across Europe adopted policies favoring diesel powered cars. If you walk around any European city today, your ears will be filled with the clatter of diesel engines. Nearly 50% of all new cars sold in Europe are diesels.

Sadly, while diesels are fuel efficient, they also emit tremendous quantities of carbon dioxide, nitrous oxides, and particulates. They are the primary reason why it is often impossible when visiting Paris to see the Eiffel Tower from the banks of the Seine because of the smog hanging low over the city.

The Volkswagen diesel emissions scandal destroyed Europe’s cozy relationship with diesel engines because it revealed for the first time how virtually every other manufacturer was cooking the books during their diesel emissions testing. While Europeans have saved billions of gallons of fuel by driving diesels for the past 40 years, they have also been slowly suffocating themselves in waste products spewing out of millions of tailpipes.

Ghosn told the press the new e-Power system is “definitely cost-competitive with diesel,” adding that it would “absolutely” be viable for the European mass market. It’s easy for Americans to scoff at such ideas. A 1.2 liter engine and tiny little battery? Like to see that tow a boat uphill to a cabin in the mountains. Don’t be ridiculous!

But Europeans are different than Americans. They are smaller in girth. They drive smaller cars over shorter distances. Their cars are not all equipped with air, 27 speakers, Bluetooth connectivity, and heated seats. In fact, the vast majority of cars on the Continent are fitted with manual transmissions, if you can imagine such a thing.

The e-Power package costs 27% more than a standard Nissan Note in the Japanese market. Ghosn says that is roughly the same premium people in Europe pay for a diesel engine. The difference will be more than made up for in fuel savings over the normal life of a car. And the e-Power has the same fuel economy as a diesel or higher. The small size of the battery is a major factor in keeping the price of an e-Power equipped car affordable. Same money, same or better gas mileage, greatly reduced emissions? Ghosn could be on to something here.

We all would prefer to drive a Tesla Model S, but for the majority of people the price difference just doesn’t make sense. An e-Power equipped Nissan for the same price as a diesel could be just the thing European countries need to reduce their carbon emissions while making sure ordinary people can afford the price of a new car.

Source: Automotive News

Are Electric Bicycles Catching Cars As Europe's Favored Transport?

It shouldn't come as a surprise to discover that there are more bicycles around than there are cars.

They're vastly cheaper for a start, and require no pesky tax, parking fees or indeed, fuel. As far as methods of transport go, they're second only to walking for inexpense.

More newsworthy is that the electrically-assisted bicycle, or e-bike, is starting to take its own healthy slice of the market--particularly in Europe.

Navigant Research reports figures from the European Cycling Federation on both carand bicycle sales figures from 2011. The former figure is around 13 million, the latter closer to 20 million--like we said, not too surprising.

Notably, while European car sales fell by 2 percent between 2010-2011, e-bike sales went the other direction, rising by a full 22 percent. With European car sales still suffering in 2013--for non-premium brands, at least--could the e-bike be taking over in the continent's towns and cities?

If it is, the reasons for the increase in popularity are various.

Smart eBike Test Ride

The increasing difficulty of owning a car in Europe is one factor. Parking is expensive, fuel costs are often twice that of fuel in the U.S, and buyers are taxed to the nines from every imaginable area. There are taxes when buying the car, when entering cities, annual vehicle taxation, paying for fuel, and even taxes on those taxes--paying purchase tax on an already-taxed product like fuel.

Throw in increasing congestion, roads limited to certain types of vehicles or taken over by lanes for public transport and often ignored when in need of maintenance, and owning a car is more like a punishment than a convenience sometimes.

Next to that, a bicycle is a breath of fresh air. Even more so if it offers you some of the otherwise useful elements of motorized transportation, such as ease of use. Even the smallest amount of electric assistance can reduce effort on hills, while cities themselves are becoming more bike-friendly--extra bike lanes are appearing, buses and trains are offering places to store bikes, and bicycle racks are springing up in the center of towns.

CBS (Statistics Netherlands) data shows that people are riding further on e-bikes than they would on a regular bike, by around 2 miles on average--suggesting e-bikes aren't merely a replacement for the average bike journey, but being used for journeys that may once have required a car.

In the Netherlands alone--a particularly bike-friendly country--riding is now second only to cars (and ahead of trains) in terms of distance traveled, and e-bikes have contributed a full 9 percent to that figure.

There is, of course, the argument that people are just looking for more fun and healthy means of transportation these days--mixing business with pleasure.

E-bikes still have a way to go before they alone overtake annual car sales figures. And they'll never be as suitable for longer journeys. But in Europe's cities, they're looking more and more like the best way of getting about.

European EV sales will jump fivefold by decade's end

PRESS RELEASE

BOULDER, Colo.--(BUSINESS WIRE)--Although government support for Electric Vehicles (EVs) in Europe is waning, the increasing availability of vehicle charging infrastructure that enables vehicles to charge at home, at the workplace, and in public places is facilitating market growth. With electric and electrically assisted vehicles now available in the mainstream market, the fundamental question is no longer if there is a market; rather, the question is how fast that market will grow. According to a new report from Pike Research, a part of Navigant's Energy Practice, EVs – including electrically assisted hybrids – will play an increasingly important role in European markets, growing from 0.7 percent of the market in 2012 to four percent in 2020. While that is still a small portion of the market, it represents more than 827,000 vehicles sold annually in the region.

"The European transportation market is significantly different from other world regions," says senior research analyst David Alexander. "Thanks to fuel prices that are significantly higher than in North America, small, efficient gasoline- and diesel-engine cars have led European sales figures for many years. Today, the market is still testing electric drive technology, waiting for the price premium for EVs compared to conventional vehicles to narrow, and in some cases waiting for electric charging infrastructure to become established."

Another difference between the European and North American automotive markets is the prevalence of diesel vehicles in Europe. The popularity of diesel has prevented hybrids from achieving the success in Europe that they have had in North America, where the contrast with large V8 vehicles is important to consumers. The biggest growth through 2020 is expected to come in battery electric vehicles, followed by plug-in hybrids, according to the report, while hybrid electric vehicle sales will lag behind in most European countries.

The report, "Electric Vehicles in Europe", examines key market trends and drivers for the purchase of light duty electric drive vehicles in Europe. The study includes an analysis of business models and demand factors, technology and standards issues, and government policies within the region. Profiles of 23 key automakers in the sector are included, and detailed market forecasts for vehicle sales and registrations are provided for 21 European countries, segmented by powertrain, through 2020. An Executive Summary of the report is available for free download on the Pike Research website.

About Pike Research

Pike Research, which joined Navigant's global Energy Practice on July 1, 2012, provides in-depth analysis of global clean technology markets. The team's research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Smart Utilities, Smart Transportation, Smart Industry, and Smart Buildings sectors. Additional information about Pike Research can be found at www.navigant.com/pikeresearch.

About Navigant

Navigant (NYSE: NCI) is a specialized, global expert services firm dedicated to assisting clients in creating and protecting value in the face of critical business risks and opportunities. Through senior level engagement with clients, Navigant professionals combine technical expertise in Disputes and Investigations, Economics, Financial Advisory and Management Consulting, with business pragmatism in the highly regulated Construction, Energy, Financial Services and Healthcare industries to support clients in addressing their most critical business needs. More information about Navigant can be found at www.navigant.com.