Electric cars need government billions – BCG

www.environmental-finance.com/
London, 22 January:

Electric and hybrid cars will fail to make major inroads into the vehicle market by 2020 unless governments intervene with incentives to support these technologies, according to a Boston Consulting Group report. The costs of creating an automotive market dominated by electric and hybrid cars are "prohibitively high, at least in the foreseeable future", the firm said. In Europe alone, $49 billion will need to be invested in the vehicle technology, with an additional $21 billion for battery-charging infrastructure, BCG estimated.

According to the report, electric vehicles are able to produce 60% less carbon dioxide (CO2) emissions, on a well-to-wheel basis, than cars with internal combustion engines, while hybrids can offer savings in the region of 30% - meaning these technologies have the potential to make a significant contribution to reducing CO2 emissions worldwide.

But in the research firm's 'most likely' scenario, cars with internal combustion engines will continue to dominate the market in 2020, with an overall market share of 58% for petrol engines and 14% for diesel. Alternative propulsion technologies - hybrids, electric cars and natural gas-powered vehicles - will win just 28% of the market. Together, this represents 15.3 million cars, of which just 1.5 million will be pure electric.

"To reduce CO2 emissions, all automotive manufacturers need to include electric cars in their fleets. But they cannot do this alone. Unless governments act promptly to provide adequate incentives for consumers to purchase electric and hybrid cars, and for power companies and private investors to provide the necessary infrastructure at affordable prices, the electric car may be off to another false start," said Georg Sticher, a co-author of the report and senior partner in BCG's Munich office.

Some governments, notably France, Denmark and Israel, are already subsidising electric car ownership. But until such schemes are widespread, technologies to improve the efficiency of internal combustion engines will remain the most cost-effective way to reduce CO2 emissions, the report concludes.