5 reasons why car makers won’t go electric before 2020

One wonders why OEMs are slow in implementing a comprehensive electrification strategy in Europe. They need to start selling massive amounts of battery-electric vehicles (BEV) to reach the 95 g/km CO2 target by the end of 2020. Still, most car manufacturers will only start deploying their e-offensive in 2020. And they have good reasons to do so.

  1. Super credits. OEMs need to get their fleet’s weighted CO2 average down to 95 g/km by the end of 2020. To stimulate the development and sales of low-CO2 vehicles, the EU grants OEMs so-called super credits, aka multipliers. Every car sold that emits less than 50 g/km counts as 2 vehicles in 2020. This number becomes 1.67 in 2021, 1.33 in 2022 and 1 from 2023 onwards.
  2. Not enough demand. According to EVsales.com, battery electric vehicle (BEV) sales rose 36 percent in the first half of 2018, but their market share remains marginal. It is also very country-specific. In Belgium, for instance, less than 0.5 percent of new car sales are BEVs. In Norway, one in every five new cars sold is powered by electricity alone (see graph below).
  3. Not enough charging infrastructure. According to an ACEA study published in July 2018, there is a correlation between EV uptake and the availability of charging points. That seems logical: people are less inclined to buy electric if there are hardly any charging points where they need them. In some countries, like Germany, the charging infrastructure is expanding rapidly, though.
  4. Fast outdating technology. Battery technology is evolving fast, which is why it might be better to wait just another year or two. If you launch a battery-electric vehicle today, chances are it will be outdated within just a few years. Today’s batteries are usually lithium-ion based and liquid-state. The next-generation batteries are likely to be solid-state and offer more capacity i.e. range while weighing less and taking up less volume.
  5. Not enough margin. Car makers are not making money on their electric vehicles. The development cost of a BEV is spread over far less vehicles than is the case for a conventional car. Moreover, OEMs have to source batteries externally. Today, prices of battery cells are relatively high, but experts believe they will be coming down fast over the next two years.
Fonte: Tesla, 2018

Fonte: Tesla, 2018

di Dieter Quartier