The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy
Mobility is responsible for one third of all energy consumed and for one quarter of global CO2 emissions. According to a report from Navigant Research, electrification of transport will be the greatest lever to leap from business-as-usual climate catastrophe to limiting global warming to an increase of 1.5°C.
If all urban areas in Europe, China and the United States electrified their private and public transport, the resulting emissions reduction will contribute 28% to the required total to remain within the Paris Agreement goals. E-mobility has the potential to become the climate crisis game-changer.
In this time of pandemic and financial crisis, E-mobility can help us to revive our economies sustainably and create much-needed economic growth. Stimulus packages include measures to foster the sale of electric vehicles and the expansion of charging infrastructure. The French government issued an €8 billion rescue plan for its car industry, aiming to become the leading producer of EVs in Europe. Germany has doubled its contributions for EV purchases until the end of 2021, granted investment of an additional €2.5 billion for the expansion of charging infrastructure and in research funding for electric mobility and battery cell production.
At the same time, automotive manufacturers are accelerating their EV launch plans. By 2022 we will be able to choose from 500 car models globally. EVs will reach price parity with internal combustion vehicles in most segments by mid-2020—even without generous subsidies.
However, numbers of EV adoption are sobering. The global market penetration stands at just 2.4% in 2019. The adoption of electric vehicles is increasing, but in most markets, it still is a niche player.
Charging an EV must become as easy and convenient as charging a smartphone.
Research group BloombergNEF’s EV Outlook report describes charging infrastructure quite simply as “a challenge in our forecast”. Meanwhile, a consumer survey by consultancy McKinsey shows that more than 50% of the participants see charging or range as a top concern. Drivers will not replace their combustion engine vehicle with an electric car if there is no reliable charging infrastructure in place.
Large, city-wide infrastructure projects would move the needle, but the costs are prohibitive. We need to be smart in how the infrastructure is put in place and think of a charging ecosystem rather than a one-size-fits all solution.
Using existing infrastructure for EV charging is a one option. What if we could turn every lamp post into a charger? In the UK, we have been working with the energy start-up Ubitricity to turn existing lamp posts into charging points. Installation typically takes less than an hour. Roughly, 1,300 lamp posts across London provide on-street charging capability, powered by 100% renewable energy. Local councils and other local bodies can drive the switch to electric vehicles for residents and businesses.
Considering that 80% of charging happens at home or at work, companies can play a larger role in widespread EV adoption. While in some countries this is enforced by near-term policy requirements, many companies still set carbon reduction targets of their own. Offering enterprise charging is a way for companies to reduce their carbon emissions, to demonstrate commitment to a zero-carbon future and to encourage employees to buy and drive an EV. This is especially so in the EU where company cars account for about 50% of new cars.
As sustainability has become a priority for many businesses, companies should not miss out on integrating fleet electrification into their climate action plans. The logistics company DHL made a pledge to expand its green fleet and to reach 70% clean operations of last-mile pick up and deliveries by 2025. Amazon’s CEO Jeff Bezos announced last year that the company has placed an order for 100,000 electric delivery vans from startup Rivian. Any large fleet owner should make fleet electrification part of its journey towards a net-zero future. This will not only help the image but also cut Scope 1 emissions and make the fleet future-proof.
NEW BUSINESS OPPORTUNITIES
Office-based chargers can be made public when not needed for employee charging during off-hours and weekends. This could open up new revenue streams. Though the know-how and capacity to maintain and manage the charging infrastructure as well as to handle technical problems are often not part of the companies’ core business. Professional services such as technical operation, remote monitoring, and maintenance of the hardware are required. Charger-as-a-service models are a worry-free option for a variety of companies and businesses.
Any business with off-street parking, like retailers, shopping malls or hotel chains, could purchase and install chargers from a manufacturer and have control over the rates of customers who want to charge their EVs while shopping. Or a store owner could partner as a host with an EV charging network provider that retains ownership and sets prices for the public stations in its network. Diversification of revenue streams through offering grid services such as ramping and frequency regulation could also help margins.
All these smart but practical innovations are solutions that will ultimately help to tip the balance towards full E-mobility. Electrification of transport is an energy efficient and sustainable way to decarbonise the economy. Government efforts and subsidies create the right momentum, now we must drive expansion of charging infrastructure.
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