Electric Vehicles Tread Water Under COVID-19, So What’s Next?
In a new report that will surprise no-one who has been paying any attention, the International Energy Agency has just added its two cents to the pile of evidence indicating that electric vehicles are gaining in appeal over their planet-killing cousins, despite the economic crisis wrought by the COVID-19 pandemic. So, what could possible go wrong?
Electric Vehicles After COVID-19: What Could Possibly Go Wrong?
In a nutshell, everything. The new report is the latest iteration of IEA’s annual Global EV Outlook. It paints a rosy picture up front, but leaves a big question mark about the future.
On the bright side, the Global EV Outlook expects sales of electric vehicles globally to run ahead of gasmobile sales this year, based on sales figures so far. That’s consistent with the sales trend here in the US, by the way.
That sounds okay, but it leaves the EV market basically running in place compared to last year, at least in the passenger car area. Based on data from January to April, IEA anticipates that total electric car sales for 2020 will hit somewhere around the same 2.1 million units sold in 2019.
Considering the festering global economic crisis this year, holding on to last year’s sales figures is a good sign. With conventional auto sales slumping by an estimated 15% for the year, electric vehicles stand to gain a bigger foothold in the market after the dust settles.
According to IEA, 2020 is on track to set a new record for EV penetration at 3% of total global car sales, up from 2.6% in 2019.
So much for the good news. That figure of 3% culminates a 10-year stretch of impressive growth for electric vehicle sales, but the Global EV Outlook is also careful to note that COVID-19 has thrown a beast of a monkey wrench into chances for a repeat performance over the next 10 years.
The report explains that “second waves of the pandemic and slower-than-expected economic recovery could lead to different outcomes,” adding that “ultimately, government responses to the pandemic and how consumers emerge from the crisis will determine what happens to electric car markets in 2020 and beyond.”
Whomp-whomp.
Here Is The Most Interesting Thing About The Global EV Outlook
The Global EV Outlook identified the leading hotspots for EV sales and there were no surprises there, either. China was racing far ahead of the pack in 2019 despite a slowdown compared to 2018.
“More than 1 million electric cars were sold in China in 2019, a 2% decrease from the previous year,” the report recounts. “Europe was the second largest market, with 561,000 cars sold in 2019. The United States followed with 327,000 cars sold.”
With figures like that, one would figure that the US would be involved in engineering an IEA document like the Global EV Outlook. After all, the report didn’t just pop out of thin air, and the US is still an IEA member nation the last time we checked.
This is where things get kind of surprising. If the US has a hand in the report, they’re being awfully shy about it.
The Global EV Outlook is supported by an IEA program called the Electric Vehicles Initiative, which aims at fomenting EV adoption globally through high-level policy channels facilitated by the Clean Energy Ministerial. The member list is a veritable who’s who of leading and emerging EV markets. According to the website that includes Canada, France, Japan, Norway, Chile, Germany, the Netherlands, Sweden, China, India, New Zealand, United Kingdom, and Finland.
Cities To The Rescue
What, did they hide the US under the bed? Either that, or maybe they forgot to update their website. You can spot the US if you check out some other sites. The Paris Process on Climate and Mobility, for example, lists additional members including the US, as well as Finland, Mexico, and Norway, with Portugal hitching a ride on observer status.
In addition, a Clean Energy Ministerial document lists the US as one of three lead members (Canada and China are the other two), but notes that the country’s participation and leadership are “under review.”
If you can sort that out, drop us a note in the comment thread.
Meanwhile, back in 2018 the Electric Vehicles Initiative launched a vehicle, so to speak, for accelerating EV adoption called the EVI Global EV Pilot City Programme.
There are a lot of moving parts moving around in that program, the idea being to assemble a 100-city network within the next five years, all working together in a common cause.
“Central pillars of the programme are to facilitate information exchange among cities and to encourage the replication of best practices, for example through webinars and workshops,” EVI explains. “Another important element is to use the network to build on experience gained by creating analytical outputs and reports to help cities and other stakeholders learn from earlier experiences of member cities.”
Got all that? Good! Regardless of whether or not the US government is hitching a ride, lessons learned are already drifting across the globe and may land on the nation’s shores pretty soon if they haven’t done so already.
Electric Vehicles & The Bottom Line
To cite one recent example, the US-based Natural Resources Defense Council is one of the partners behind a major EV-to-grid pilot program in Shanghai.
Of course, NRDC has also been making the case for electric vehicles in the US as well, and one of its secret weapons is the economic case.
To be clear, the bottom line case for individual EV ownership is a little complicated because up-front prices are still higher than a comparable gasmobile, mainly due to the cost of the battery. However, costs for fuel, maintenance and repair are lower.
On a community level, though, the financial case for electric vehicles is already coming into focus.
The firm Synapse Energy Economics recently looked into the question of whether or not electric vehicles are helping to drive down utility rates, by comparing revenues from EV charging with the costs of serving that load. So for example, if the EV charging load requires a system upgrade, that could push up rates for all users.
That hasn’t been happening, at least not yet.
“Our analysis indicates that, from 2012 through 2018, in the two utility service territories with the most EVs in the United States, EVs have increased utility revenues more than they have increased utility costs, leading to downward pressure on electric rates for EV-owners and non-EV owners alike,” Synapse reported.
A little bottom line razzle-dazzle sure would help make the case for rolling the US automobile fleet into EV territory sooner rather than later.
In an interesting twist, the US Department of Energy is also promoting the community benefit angle. The agency points out that more EVs and less petroleum is a good thing that reduces the impact of price spikes and disruptions in transportation fuel supply for everyone.
“EVs can also reduce the emissions that contribute to climate change and smog, improving public health and reducing ecological damage. Charging your EV on renewable energy such as solar or wind minimizes these emissions even more,” DOE points out.
GM is one US automaker that gets the renewable energy connection, so stay tuned for more on that.
Meanwhile, watch fleet owners for signs that the US electric vehicle market is set to heat up, and keep an eye on those EV battery costs, too.
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Image: via IEA Electric Vehicle Initiative, Global EV Pilot City Programme.
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