Do Nations Dream of Electric Cars?
COP26 saw a raft of new initiatives and ambitious plans to reduce the impact of climate change, not least of which was a focus on electric vehicles. But will these supercharge the future or just leave us with a nasty shock? Jaeyeon Park and Harry Stobart take a closer look at the UK and US to find out.
‘Climate Change knows no borders’ - powerful words by Angela Merkel, and a clear statement that climate change affects each and every one of us. If only there was some forum during which nations could come together and save the planet. Fortunately, there is, and a little over a month ago world leaders came together to meet at the ‘Conference of the Parties’ – or COP – a global Climate Change summit held in Glasgow. Hooray! Our future is saved! Or is it? You see this conference wasn’t COP1 or COP2, it was COP26 - the twenty-sixth year of such climate-related talks which begs the ultimate question: ‘What are they really doing?’
Of course, there are numerous action plans to tackle this crisis, and each country has their own ideas and approaches. However, one area of common ground at COP26 was an accelerated transition to electric-based transport and more specifically, electric vehicles. But before we all cash in and buy a Tesla, it’s time to first ‘pop the hood’ and take a closer look at exactly what these countries are planning and their rationale behind it.
Riding high from the summit, the UK government recently released a policy paper entitled “COP26 Declaration on accelerating the transition to 100% zero-emission cars and vans” which contained the signatures of 39 national governments (including 12 governments in emerging markets) among others. The motivation behind this paper was driven from the Paris Agreement, an enormous treaty signed by 196 parties at COP21, with the aim of keeping global temperature rise less than 2oC than that of pre-industrial levels. But with six years gone and little apparent change, concerns were beginning to surface. Are any of these nations committed to achieving this goal? Well, these nations want this declaration to be considered a response. Let us put the UK and US under the microscope.
The UK Approach
Starting closest to home, the UK has set its stall out to transition to zero-emission cars and vans by 2035. A well-intentioned, albeit ambitious plan. After all, projects of this size have a habit of being delayed; let us not forget we should all be riding Crossrail by now! So how does the government plan on achieving its target? By essentially focussing on two aspects - reducing the attractiveness of traditional fossil-fuelled vehicles and increasing the attractiveness (and usability) of electric vehicles - a government policy ‘give and take’ if you will.
Reducing the UK’s reliance on traditional vehicles is no easy feat, but the government has set a sweeping standard that all new cars and vans will be 100% zero-emission by 2035, and the sale of new petrol and diesel cars and vans will be phased out from 2030.
While this seems like a step in the right direction, the keyword in that statement is ‘new’. It makes no promises or reference to the petrol and diesel cars that already exist. This problem becomes more acute when we examine the statistics. Using data provided by Statista, the average number of new cars sold per year has been over 2 million since 2003, while the Department of Transport reported there were over 32.5 million cars in the UK in 2020, of which 31 million were petrol or diesel. It doesn’t take much number-crunching to work out we would need every single new car sold between today and 2035 to be electric in order to be completely free from fossil-fuelled vehicles. But the promise is only for ‘new’ cars and vans. It’s funny what one little word can do.
The government is fully aware of these implications and therefore faces a more pressing question: How to encourage people to buy electric vehicles now and not when they have to in 2035. The answer - incentives and infrastructure. On 15th December 2021, the government announced it was updating its grant scheme for zero-emission vehicles to include less expensive models. Consumers wishing to buy an electric car can get up to £1,500 for those costing £32,000 or less. Whilst van owners looking to make the swap can get up to £2,500 for small models, and £5,000 for large models.
Excellent! People should now be queuing up to exchange their dusty old cars for a nice shiny electric version! Actually, the queue may be shorter than you think. In 2021, 1-in-10 cars sold had a plug, however, a socket to plug it in isn’t always easy to find, especially for those living in flats and major cities. As a result, the government has announced a further £620 million to improve the electric vehicle infrastructure across the UK with a focus on local on-street residential charging points.
The US Approach
The US is one of the major contributors to climate change, and in 2017, the former President Donald Trump announced his intention to withdraw from the Paris agreement which took effect in 2020. Re-joining the agreement was one of the things that the current US president Joe Biden did on his first day in office, which shows his interest in the matter. Ahead of COP 26, on 5th August 2021, he also announced the national target of having 50% electric vehicle sales share by 2030.
After COP 26, the Biden administration released an action plan to accelerate the Bipartisan Infrastructure Law Investments, which included building 500,000 electric vehicle charging stations. The Bipartisan Law is essentially a means of investing in the nation’s infrastructure. It appears the US government could foresee that not having enough charging stations could hinder the purchase of electric vehicles. While this policy may not promote the purchase or lease of electric vehicles directly, it could help consumers make a fairer decision between traditional vehicles and a more sustainable alternative. However, there are other barriers to purchasing electric vehicles like safety issues, the long amount of time taken to be fully charged and the options being limited. Moreover, the cost of building the charging stations is hardly negligible. Thus, it remains to be seen whether this plan will be worth it.
Depending on the car’s battery capacity, the US government also offers a tax credit for the purchase of a new plug-in electric vehicle of up to $7,500. Some states provide incentives as well; California has an electric vehicle rebate programme called ‘California Clean Vehicle Rebate Project’ (CVRP), in which residents can get up to $7,000 for the purchase or lease of a new, eligible, zero-emission or plug-in hybrid vehicle when applied.
According to the data from Experian, the electric vehicles market share in the US is continuing to increase from 1.5% in 2020 to 2.6% in 2021 of all registrations through Q3 of each period. In fact, this shouldn’t be a surprise. Public awareness of climate change is growing, and sustainability has become a general market trend. Even if there were no policies in place, we still may have seen an increase in demand for electric vehicles.
Nevertheless, like in the UK, the majority of vehicles being sold today in the US still use petrol or diesel as their main energy source and there are no policies that address the pre-existing petrol and diesel cars explicitly. According to the Guardian, the phasing out would take at least 15 years even after the sales of the polluting cars are halted. As transportation is the largest source of pollution in the country, further actions may be required to address this issue.
Both the UK and the US have made sizable promises and drawn up detailed plans to increase the usage of electric vehicles. There is room to be optimistic, but in reality, words and actions can be two very different things. For now, it appears we are setting off towards a better future, though if we’re going to make it on time, we might just need a higher gear.