Electric buses, shared and autonomous e-mobility will disrupt the poor environmental performance of European automakers.
European regulators have moved very diligently, perhaps too much so, in trying not to impose too stringent regulations which could harm the European automotive industry in its transition to zero emission vehicles. Historically, large automobile manufacturers, such as the ‘Big Three’, and the European Commission have had very close relations. However, recent scandals in relation to cheating devices in diesel vehicles and emissions tests, provides evidence that perhaps authorities have given too much space to the automotive sector.
Electric public transport is set to play a larger role in Europe’s efforts to reduce greenhouse emissions and local pollutants. This is mainly because where European policy makers and automotive companies are moving very slow in the reduction of emissions and pollutants in passenger private cars, city mayors and other local authorities can move faster to provide electric public transport.
The efficiency of emissions
Transport represents 27% of Europe’s total greenhouse emissions, whilst also being a source of other dangerous emissions like NOx. Ten years ago, in 2008, the European Commission introduced legally binding CO2 standards establishing a goal that by 2015, on average, new cars sold in Europe should emit 130g of CO2 per km, and 95g by 2021. According to NGO Transport and Environment, these targets were quite relaxed and easily achieved by automotive companies. Overall, according to the watchdog, new car CO2 regulations have delivered only around a 10% reduction in on-road emissions in the 20 years since the first voluntary agreement was established in 1998; and there has been effectively no improvement in the last five years. As a reference, to meet the goals of the Paris Agreement, transport emissions must be reduced by more than 90% by 2050, so clearly the pace of reductions is not fast enough.
In spite of this, all carmakers achieved their 2015 new car CO2 targets and most are on track to achieve 2020/1 goals. This has been achieved in very large part by exploiting the flexibilities in the testing procedure which has meant the gap between test results and real-world performance has grown from 9% to 42%, equivalent to 31g CO2/km of fake savings. Despite test cheating, about half of carmakers still need to accelerate the progress made to date in order to achieve their 2021 target.
Limiting growth and development
Automotive companies are now holding back the launches of new electric car models and more fuel-efficient upgrades of top selling models until 2019 and 2020. Finally, there is now growing evidence that automotive companies are not only holding back the launch of more electric car options but failing to provide the required sales and marketing effort as they do with petrol versions of their vehicles. , However, as a result of the limited deployment of fuel efficient technologies on engined cars, many carmakers will need to increase sales of sub-50g CO2/km vehicles (battery electric and plug-in hybrid vehicles) in order to achieve their 2021 targets.
Despite this, situational European electric vehicle (EV) sales are increasing, thanks to national government incentives, among other policies. Sales in 2017 reached almost 250,000 units, however, this remains a very small quantity in relation to the 19 million passenger cars sold in the same year. In this way, EVs account for only 1.3% of total sales. Whilst the European Commission is establishing targets of 3-5% share of plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV) by 2021, this still remains a very unambitious target. In comparison, China achieved 2.4% of electric cars over total passenger car sales in 2017 and is aiming to reach at least 4% in 2018. Whilst the European automotive industry is incrementally transitioning to electric cars through stepping stone vehicle platforms, such as the new 48-volt mild hybrid car (which is not really a proper electric car). The Chinese industry has moved directly to pure electric and plug-in hybrid cars, supported by the Chinese government through incentives.
The development of diesel
Dieselisation, which was the carmakers’ principal strategy to reduce CO2 emissions, has resulted in the share of diesel cars growing from 36% in 2001 to a peak of 55% in 2011. Following the Dieselgate scandal, sales have slumped and the EU market share is expected to slip to around 40%. High levels of NOx emissions from diesel cars and buses have been the source of citizens’ complaints. Whilst diesel car sales in Europe have been plummeting, emissions remain high from the existing fleets, which also includes public transport, such as buses. In an unprecedented move, city authorities are reacting by introducing limitations to the acquisition and operation of diesel passenger cars with measures ranging from:
- Congestion charges; and
- In some cases, establishing a timeline for their outright banning.
Whilst the European Commission is going easy on automakers, it is becoming more stringent with high-pollution countries when moving to present legal action against six European countries that have breached legal limits on NO2 and PM10 emissions.
On the other hand, European cities are becoming increasingly congested. Congestion costs the EU economy €100 billion annually. For all these reasons, city authorities are pursuing the promotion of the electrification of public transport, given the growing frustration of citizens. A growing niche segment, fostered by new technology, are the multiple companies offering electric scooter and bicycle sharing services across Europe.
Approximately 725,000 buses operate in Europe, a figure which includes all types of powertrains (electric and non-electric). From these, approximately 2,500 buses are electric at the moment, but many of the bus fleets are still diesel. For example, in London, UK, about 68% of the 9,549 bus fleet are diesel buses. The leading countries in adopting electric buses in Europe have been Belgium, the UK, Germany, Austria and the Netherlands. However, the decisions do not operate at country level but city level. London’s Mayor, Sadiq Khan, declared that from 2018, no new diesel buses will be acquired and, by 2020, almost all double-decker buses operating in central London will be Euro VI hybrids, whilst all single deckers will be zero emission. In comparison in China, electric bus incentives are deployed at country level. The result is that 100,000 buses were sold in 2017 and most of the electric bus fleet – of about 380,000 buses – is based there.
An increased in demand for electrification
Orders of electric buses have been increasing in Europe and, given the range of commitments by cities, we estimate that 2017 saw orders of about 1,000 electric buses in the region. The main suppliers of these buses include:
- VDL; and
China’s BYD has built up a large production network in Europe that has largely gone unnoticed in the passenger car world. That’s because its new plant in Hungary, its planned plant in France and its joint venture operations in the UK, all produce electric buses. How things have changed; BYD knows that European governments are fed up with the choking emissions from today’s vehicles. It has used the backlash against fuel-powered transportation to win bid after bid in Europe for its electric buses. Local governments have been funding the move to electric buses through instruments, like grants, through establishing “green bus funds”.
Innovation for decarbonisation
Innovation in electric buses is happening in Europe. Companies like Heliox have deployed the largest full operation e-bus project in Europe, with both opportunity and depot charging in Eindhoven, the Netherlands, with a fleet of 43 electric buses. The company has also achieved bi-directional charging in this way, opening the door for bus stations to work as energy storage facilities and provide services to the electricity grid in future demand side management systems.
Fast charging, high-power technologies are an enabling technology for electric buses. Among those, we can find lithium-titanate batteries and supercapacitors. These technologies can provide higher power than traditional lithium-ion technologies, but less energy density. The European electric bus market will increasingly see fast charging bus technologies coming from Asia and being developed inside Europe. In Asia, for example, the Chinese government is offering up to 40% higher subsidies for those buses that provide charging systems and that achieve three times the normal charging rate. In Europe, Toshiba is offering their new lithium-titanate batteries for fast opportunity charging in electric buses. On the other side, European technology companies – like Skeleton Technologies from Estonia – are leading the commercialisation of supercapacitor technologies. Next-generation high-power energy storage technologies are being developed by Zapgo from Britain.
There is an ongoing discussion whether opportunity charging, that is charging at each bus stop, will be the dominant mode of charging electric buses, instead of charging them during the night at depots. Companies like BYD are currently promoting charging at depots, since it is lower capital investment, however, companies like Toshiba argue that whilst opportunity charging can represent higher capex, it is a more efficient system in the long term. According to the Japanese company, more and more bus operators are changing from depot charging to opportunity charging.
A new trend for transport
On the other hand, a different technological trend is the emergence of autonomous public transport, like the electric buses developed by Navya in France.
Another alternative has been the growing space of share vehicles in Europe. Whilst companies like Daimler and Bollore have been pioneers with car sharing schemes like Car2go and Blue car, we are seeing a new generation of shared vehicle schemes based on light electric vehicles, that is electric scooters.
In Berlin, for example, it is now common to see shared electric scooters from Taiwanese company Gogoro in the streets. In partnership with Coup, a subsidiary of electronics giant Bosch, the company has deployed approximately 1,000 scooters in the German capital. Scooters are not kept in depots or stations, but randomly distributed where users leave them across the city; users can find the closest vehicle available through an app.
Electric scooter rental started in 2012 with company Cooltra from Spain. Govecs, a leading scooter producer based in Munich, Germany, has been supplying electric scooters for many shared electric scooter schemes in Europe and around the world. In Berlin, the company revived the iconic Schwalbe scooter, the vehicle developed by the former German Democratic Republic, bringing a retro look to the vehicle. Scooter services like these can offer the benefits of personal mobility without the hassle of ownership, congestion and limited parking spaces.
At IDTechEx, we believe that the future of transport will not be dominated by cars, as it was during the 20th century. It is clear that the European automotive sector is giving their last effort to resist the transition to electrification; the risk in keeping this position is that it will be bypassed by two major global trends. The first one is the arrival on European shores of the roaring dragon, the Chinese electric bus industry; the second is the disruptive innovation which will come from the convergence of technological trajectories of shared vehicles and vehicle autonomy. It is time for European governments to realise that they have been overprotective with the European auto sector; it is neither good for the sector itself, nor to Europe and its citizens.