An electric vehicle charges at a residence - is this the only way to reduce emissions in the ... [+]
The automotive industry has been a shining star of emissions reductions through the increase of electric vehicles. But have leaders maxed out this pathway and do they need another option?
This week, the environmental community will conclude COP28, the so-called “Conference of the Parties” event in the United Arab Emirates. While the participants focus on deals and commitments, new data shows the transportation and automotive sector is on track for a timely switch from fossil fuels — an encouraging bit of news. But other updates show the rate of adoption of EVs is hitting a slower gear, leading to questions on whether this is the only way for this sector to hit emissions reductions targets.
As background, COP28’s objective is to develop agreements and commitments for participants to achieve the so-called 2-degree goal. This goal is the fruit of an earlier conference — COP21 in 2015 — that led to the Paris Agreement. This binding treaty stipulates the signees cut emissions within their borders so that global temperature rise is limited to a 2-degree target.
The challenge is not only to set the corresponding emissions targets but to identify a plan to meet them and then implement corresponding incentives and regulations. The State of Climate Action 2023 report from Climate Action Tracker — in partnership with the World Resources Institute and partially funded by the Bezos Earth Fund — identified 42 metrics upon which there must be global progress and assessed progress against those metrics. Per the report, only one of these metrics is “on track” in order to reach the overall goal of limiting temperature rise.
The current proportion of EV sales to overall vehicle sales is three times what it was in 2020. At this pace, the mix of EVs is on pace to support 2030 climate goals. As a point of comparison, the report shows the share of solar and wind generation in total electricity generation is slightly off track for 2030 and the reduction of public financing for fossil fuel extraction is going in the wrong direction. It’s increasing.
This is not surprising. Roughly 12% of global emissions come from automotive and transportation. If leaders are to address climate change, they should be paying attention to the sectors whose emissions outpace emissions from energy use in residential buildings or emissions from livestock and manure. So, while the other 41 metrics are off track, it is somewhat encouraging to see this metric on track given the emissions intensity from this sector.
But even this slice of good news is nuanced.
First, in key markets, EV sales are losing momentum. In the U.S. during the first quarter of 2023, the percentage of people surveyed stating they would be “very unlikely to consider an EV” rose each month from 17.8% in January to 21% in March. Meanwhile, those stating they would be “very likely to consider an EV” remained flat at 26.9%. This survey was performed by Cox Automotive. Note, however, that EV sales did hit an all-time high share of 7.9% of total car sales in Q3 2023. Even in the EU, there is slowing momentum for replacing the internal combustion engine with EVs. Investment bank UBS last month noted “EV demand remains under pressure” and that the share for EVs has plateaued at 21% since August.
But are EVs the only path to our reduced emissions targets? Consider the view of Akio Toyoda, the retiring chair of the Japan Automobile Manufacturers Association. Toyoda once stated that EV adoption would stall due to lack of infrastructure, pricing and regional preferences. Toyoda has championed utilizing a variety of options, such as plug-in hybrids and hydrogen. In fact, as an automotive CEO, he oversaw bringing two hydrogen vehicles to market.
Although hydrogen vehicle sales globally are not growing, the EU is on track to mandate that hydrogen stations be installed in major cities and China saw a doubling of hydrogen vehicle sales in the first half of 2023. Additionally, if EVs or hydrogen vehicles are not 100% of vehicle sales moving forward, technologies such as plug-in hybrids may be better for emissions and the climate versus traditional internal combustion-based powertrains.
Recent sales data seems to support this potentially inescapable reality. December data from Edmunds reveals that in the United States, through November 2023, sales of hybrid vehicles have outpaced those of EVs. Hybrids accounted for 1.2 million vehicles sold in 2023 so far, while EV sales were at 976,560.
So as COP28 comes to a close and the final targets and deals are finalized, the focus — and success — on growing EV share of total global vehicular sales is warranted. However, if world leaders struggle to see continued growth of EV share, perhaps they need to consider other alternatives to getting to the overall goal of limiting emissions and addressing the 2-degree objective.
