Leaders Electric cars

Charge!

Sep 3rd 2009
From The Economist print edition

Carmakers are shifting towards electric vehicles. Policymakers must do their part, too

Nissan

GREENS may not like it, but once people have enough to eat and somewhere tolerable to live, their thoughts turn to buying a car. The number of cars in the rich world will grow only slowly in the years ahead, but car ownership elsewhere is about to go into overdrive. Over the next 40 years the global fleet of passenger cars is expected to quadruple to nearly 3 billion. China, which will soon overtake America as the world’s biggest car market, could have as many cars on its roads in 2050 as are on the planet today; India’s fleet may have multiplied 50-fold. Forecasts of this kind led Carlos Ghosn, boss of the Renault-Nissan alliance, to declare 18 months ago that if the industry did not get on with producing cars with very low or zero emissions, the world would “explode”.

Cars already contribute around 10% of the man-made greenhouse gases that are responsible for climate change. In big cities, especially those in fast-developing countries in Asia and Latin America, gridlocked traffic is responsible for health-threatening levels of local air pollution. To its credit (and under increasing pressure from legislators), the car industry is heeding Mr Ghosn’s call. Biofuels have fallen out of favour because of concerns that those produced in rich countries are not particularly green; but huge efforts are being made to develop cleaner conventional engines and, at the same time, move beyond them to electric, battery-powered vehicles, which produce fewer emissions even when the generation of the electricity needed to charge them is taken into account.

By the end of next year, in addition to the increasing number of petrol-electric hybrids on offer, it will be possible for the first time to buy proper cars from mainstream manufacturers that are propelled solely by electric motors (see article). Among them will be Nissan’s Leaf and Chevrolet’s Volt. The Leaf will rely on battery power alone and will have a range of about 160km (100 miles) before it needs to be plugged in for a fresh charge. The Volt will have a small petrol-engine generator to recharge its batteries on trips of more than 65km. Both are medium-sized cars offering decent performance, practicality and safety—and neither looks off-puttingly weird. Electric cars from other mainstream manufacturers are not far behind.

Problem solved, then? Alas, electric cars still face several roadblocks. The Leaf and the Volt will be expensive, costing around twice as much as comparable petrol-engined cars. That is because of the high cost of batteries, and because other components must be redesigned for electric vehicles. In an industry driven by scale, small volumes lead to high costs. A further problem is that the Volt and the Leaf must be plugged into the mains every night—fine if you have your own garage or driveway, but a bit tricky otherwise. All this could limit the appeal of electric cars to affluent greens living in leafy suburbs.

Carmakers cannot overcome these problems on their own. Governments must also do their part, and not just in order to cut greenhouse-gas emissions. A switch to electric vehicles, along with better public transport, would also reduce choking air pollution in the developing world’s megacities. And most governments would prefer to be less dependent on imported oil: no country has embraced electric cars with more enthusiasm than Israel.

Power steering

Encouraging take-up means shifting the overall cost of ownership to favour cleaner cars over ones powered by fossil fuels. A carbon tax, which would make owning a gas-guzzler more expensive and a zero-emission vehicle more attractive by comparison, would be the best approach, but in its absence, introducing specific taxes linked to pollution levels is a reasonable substitute. Most European countries already have high fuel taxes; elsewhere, they tend to be low, and in some places fuel is subsidised by governments.

Despite short-sighted industry lobbying and occasional squeals of pain from voters, governments are beginning to favour cleaner cars. Regulations penalising vehicle emissions, and thus raising the cost of conventional cars, are tightening. Governments are linking taxes such as vehicle licences and sales taxes to carbon emissions. But plenty more could be done. Road-pricing schemes, congestion charging and discounted town-centre parking could all provide some of the sticks and carrots needed to increase demand for cleaner cars. Finally, governments and city authorities must make it easy for electric utilities and new start-ups to install vast numbers of street-level recharging points and develop “smart” power grids to supply the growing electric fleet without requiring much extra generating capacity. Do all those things and by 2020 electric cars will have become a common sight in cities across the world. Do too little and electric cars may remain little more than a promising niche technology.