Get ready for the shift to electric

Car companies are unveiling a host of new electric car models and many governments have set firm target dates for the phasing out of fossil-fuel engines. But there's still a long way to go until the benefits of electric are realised

Home Road Cars Electric Get ready for the shift to electric

If there was one thing that marked out the acceleration of the global transition to electric mobility in 2021, it was the sight of the new car models previewed in Munich in September, at the first big European motor show since the Covid pandemic began. And for just about every big manufacturer there, the story was the same: electric, electric, electric.

There were city runabouts and there were grand tourers. There were family cars, SUVs, roadsters, hatchbacks and pick-up trucks. There was an astonishing 1,000-horsepower electric supercar from Porsche, plus a twin-electric-motor Mercedes-Maybach of the kind that is likely to get parked in presidential palaces. And at the other end of the style spectrum, there was an all-electric campervan from VW.

These are all cars of the future. Some of these models will start to arrive in showrooms at the end of 2021; some are set for next year or the year after. But they all herald a shift to electric cars that is gathering pace.

Growing sales

According to an authoritative survey by the International Energy Agency (IEA), electric vehicle (EV) sales including hybrids are growing faster than any other segment: in 2020, EV registrations were up over 40 per cent, while sales of non-electric vehicles fell by 16 per cent.

It is in Europe and China that the market is really taking off. In 2020, Europe became the world's biggest and fastest-growing market for electric vehicles – counting both plug-in hybrids and all-electric models – with 1.37 million sold (although China remains the biggest market for pure, all-electric vehicles).

And while the US actually saw electric car sales fall between 2018 and 2020, the country has plans to catch up: President Joe Biden has called for electric vehicles to account for half of all sales by 2030.

A long way to go

But while Morgan Stanley forecasts that almost half of new car sales globally will be electric cars by 2030 – by when around 36 million will be produced each year (compared with about 4 million today) – the total world fleet of cars will still be 90 per cent fossil fuel-driven and there will still be 1.5 billion petrol and diesel cars on the road.

Many observers are looking to those in power to do more to encourage the shift. Several countries have proposed bans on sales of new internal combustion engine vehicles from as soon as 2025 including Norway, Sweden, the UK, several EU countries, Japan and Singapore, but many others are holding back. Targets have also been set by some US states, as well as China's Hainan province and Hong Kong.

Meanwhile, the IEA estimates that governments worldwide spent $14 billion last year on incentives and tax breaks for electric vehicles. This may sound like a lot, but some car companies are spending a similar amount on R&D into EV and associated technology on their own.

Cutting emissions

It's only with faster adoption of electric vehicles that hoped for cuts in emissions will happen. At current rates of progress, the amount of CO2 released by road transport is likely to continue increasing, even if at a slower rate. Road transport currently accounts for 15 per cent of global carbon emissions, and according to Morgan Stanley, there will be 150 million more petrol and diesel cars on the road by 2030 than there are today, even though the proportion of electric vehicles will have grown. That means that, even with efficiency and fuel improvements, road transport could be emitting more CO2 in 2030 than it does today.

And this is where forecasts once again point to the potential of greater government intervention to discourage the use of fossil-fuel transport and promote more electric vehicles. The IEA believes that “mass adoption” could actually cut transport emissions by more than a third by 2030 – or by two-thirds if governments adopt even more ambitious sustainability targets.

Those targets would include stricter rules on what counts towards zero-carbon transition, perhaps removing all hybrid vehicles from the calculations so that only vehicles solely powered by electric batteries or hydrogen fuel cells would be included. There would also have to be more action on building electric charging infrastructure. For example, recent research showed that almost all the charging points in the EU are concentrated in just three countries, and some states have just a couple of hundred charging stations to serve a population of millions.

Those electric cars and campervans on the motor show stands are sending out a clear signal that the future is electric. But the fact remains that, until people take them up in large numbers – and their electric power sources do not burn oil, gas or coal – there's still a long road to travel before we reach net zero carbon in mobility.