My intention here is to give a view into some of the things I'm writing for our upcoming reports. If you actually do read it I would be interested in thoughts. But no pressure.
The benefits of BEV's are clear, and in almost all cases make them the best consumer choice for a car or motorcycle. The benefits include:
However, they require government support to reach the level of preexisting support that ICEs have. Benefits of this support can already be seen in China, where early investment has led to the development of a world-leading BEV industry, and the charging infrastructure to support their high BEV stock share (~20% of all cars. 2024).
For those economies who are already automobile manufacturers, they have a tough decision ahead of them; risk trying to compete with China in the BEV market, or continue building ICEs and slowly lose market share. We have seen some manufacturers try to focus on hybrids and FCEV's, and now some economies are supporting their manufacturers BEV transition by placing tariffs on Chinese EV's.
However, the transition to BEVs is not without its challenges. It is crucial to understand the potential risks of the transition to mitigate them effectively.
Compared to the use of BEVs in light and medium-sized vehicles, heavy vehicles do not have a clear transition pathway. Big trucks, boats, planes, and even trains are harder to power with batteries due to the need for higher power and longer distances. Alternative solutions include hydrogen-powered fuel cell electric vehicles (FCEVs), biofuels, and low-carbon fuel alternatives, but each has its own development and cost challenges. Overall, the situation is much less certain, and it warrants a more technology-neutral approach to decarbonization.
Biofuels: Sustainable Aviation Fuel for planes may be the best solution, even though it may never be cost-competitive. For biodiesel, biogasoline, and bioethanol, cost-competitiveness potential is relatively high but they are being overtaken by BEVs. Biofuel development also poses negative externalities, such as deforestation and land use that could impact food production. This makes biofuels a risky proposition for decarbonizing transport.
Low carbon fuels:
High energy density BEV's:
No matter the technology, the potential we see is based on current technological advancements. Sustained investment and research can make solutions viable. Governments should strike a balance between a technology-neutral approach and picking winners, as the potential of these technologies is uncertain and constantly evolving.
- Generally able to be categorised as south-east asian economies. These economies have a high population density, increasing vehicle ownership and high reliance on motorcycles.
- The high population density means that these economies are well-suited for public transport, if the right policies are put in place.
- Motorcycles use about half as much energy per km than cars, and they are expected to be easier to transition to BEVs. This makes it so the transition can be done more quickly and with less investment.
- Most of these economies are working on their own BEV industries, which could be a good thing as it means they can develop their own technology and not be reliant on imports.
- Indonesia's biofuel projections are high. This brings significant energy security benefits, but also poses risks to food security and the environment. But on the other hand, as you can see below, it has a massive benefit for the transport emissions intensity. And what about the other axis on the energy trilemma, affordability?
- China is currently the factory of the world. This means they have a large amount of heavy freight activity which is difficult to decarbonise. China is actively promoting the development of rail and ship networks to take freight off the roads. This is a good strategy as rail and ships are inherently much more efficient. China is also transitioning to a service-based economy, which decreases the expected activity in freight transport.
- The BEV transition started early on and with the strong cultural pride around BEV's, it is likely they will achieve a 100% stock share well before most other economies.
- A rapidly aging population means China will eventually see a decrease in passenger activity, resulting in pressures from maintenance of the less used railways and roads, especailly after such rapid growth. This is a good thing for the environment, but it will put pressure on the economy in other ways.
- High population density and easier administration make these economies well-suited for a quick BEV transition.
- High public transport shares mean that these economies have a relatively low vehicle ownership rate, improving efficiency and making the transition easier - it is easier to replace a few public buses than many private cars.
- Low driving ranges make BEV vehicles even more attractive. This is especailly important for freight trucks, which are normally held back by their needs for high power over long distances.
- Singapore's Early Turnover Scheme helps to speed up the turnover of ICE vehicles, which plays a large part in achieving a projected 100% BEV stock share for light vehicles and buses by 2040. You can see singapore's turnover rate curve below.
- Strong, non-price-oriented consumer preferences (e.g. political affiliation, high driving ranges, heavy cars) mean that these economies might have just as difficult a time as any in encouraging the BEV transition.
- More optimistic emissions targets means more pressure on the freight transition, which in turn puts more pressure on charging/hydrogen-refilling infrastructure and grid stability.
- Low passenger transport shares provide an avenue for improvement, if the right policies are put in place.
- If hybrids are to be useful anywhere, it is here and other low density economies. The high driving ranges and heavy cars make them well-suited for these economies. However, use with low carbon fuels would be needed to achieve emissions reduction targets which makes hybrids less cost competitive. Without low carbon fuels, hybrids will result in less than half the emissions reductions that switching to BEVs would cause.
- These might be the economies with the slowest expected transport transition as the mix of lower incomes and higher driving ranges makes the transition to BEVs more difficult. These economies also have quite unique Targets, such as a high reliance on gas vehicles in Peru and Russia, a very optimistic target in Chile, and a pessimistic targets in Papua New Guinea and Mexico.
Some notes: lower incomes doesnt necessarily mean evs are less suited if they become cheap, however because of issues with used car imports and the correlation between income levels and used car imports, these lower income economies might be disadvantaged in the transition.