The Top 5 Issues in LCFVs This Week: China Following California on ZEVs

Happy Monday friends! Last week I was traveling so this is the Monday edition of the Top Five, my weekly take on the five most interesting developments in low carbon fuels and vehicles (LCFVs) trends over the last week:

1. ZEV Mandate in China?: China appears to be following California’s lead in proposing its own zero emission vehicle (ZEV) program.
2. Medium- and Heavy-Duty Standards: To much fanfare and publicity, EPA/NHTSA released its final phase 2 GHG and fuel efficiency standards for medium- and heavy-duty trucks, generally staying the course from the proposal and receiving broad support from different sectors, while CARB seems ready to start on Phase 3 of the regulations.
3. We Can Electrify 87% of Our Travel Needs Now: A MIT released a study last week finding that 87% of personal vehicles on the road in the U.S. can be replaced by the EVs on the market today with the current ranges and at an overall cost to their owners (purchase and operating) no greater than that of internal combustion engines even if they can only charge overnight. But…we still need the internal combustion engine to integrate with EVs for those trips that can’t be with them.
4. Ford to Introduce a Self-Driving, Steering-Wheeless Vehicle by 2021: These vehicles are mainly targeted for the car-sharing market, but what a sight that will be!
5. The Societal Impacts of Self-Driving Vehicles: Will range from negligible to considerable depending on how they are ultimately used.

1. Bloomberg: China Proposing California-Like Mandates for Electric Cars

Bloomberg reported last week that China is considering a California-style Zero Emission Vehicle (ZEV) mandate that would require auto manufacturers to produce more ZEVs or purchase carbon credits or pay fines that are five times the average price of the credits if they fail to meet the targets. The manufacturing target would require automakers to either produce or import ZEVs in proportion to the number of conventional vehicles they sell, according to a policy document (in Chinese) obtained by Bloomberg from China’s National Development and Reform Commission. The document specifically references the California ZEV program, but China will not be the last country that attempts to follow California’s lead on ZEVs.

China’s vehicle market grew at its fastest pace in 3.5 years last month, according to the Wall Street Journal, driven primarily by tax breaks. Meeting climate targets are a motivator of the policy along with air pollution and congestion mitigation are also large factors, especially in China’s largest cities. But the real concern is that subsidies for ZEVs which have totaled $2.3 billion since 2009 end in 2020 – which policymakers fear may slow the development of the ZEV market in China. The country overtook the U.S.as the largest market for EVs last year and is targeting 3 million in sales of ZEVs by 2025.

2. EPA/DOT: Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles – Phase 2

Last week EPA and the Department of Transportation through the National Highways Safety & Traffic Administration (NHTSA) released the final GHG/fuel efficiency regulation for medium- and heavy-duty engines and vehicles for the model years 2021-2027, which will apply to semi-trucks, large pickup trucks and vans, buses, tractors and other such vehicles. EPA notes that when fully implemented, the rules mean that 2027 model-year heavy-duty trucks will be 25%t more carbon efficient than those sold in the 2018 model year. Read more about it here.

3. MIT: Potential for Widespread Electrification of Personal Vehicle Travel in the United States

MIT released a study this week finding that 87% of personal vehicles on the road in the U.S. can be replaced by the EVs on the market today with the current ranges and at an overall cost to their owners (purchase and operating) no greater than that of internal combustion engines even if they can only charge overnight.

It would represent a 61% reduction in fuel consumption. Assuming battery technology improves in line with government estimates, by 2020 up to 98% of vehicles could be replaced, representing 88% of our fuel consumption. Moreover, this would more than meet near-term climate targets for personal vehicle travel.

The project, which took four years to complete, included the integration of large datasets on second-by-second driving behavior based on GPS data and national data based on travel surveys to estimate energy requirements of personal vehicle trips across the country. Other findings included the following:

• The team found that the vast majority of cars on the road consume no more energy in a day than the battery energy capacity in affordable EVs available today. These numbers represent a scenario in which people would do most of their recharging overnight at home, or during the day at work, so for such trips the lack of infrastructure or “range anxiety” was not really a concern.
• Vehicles such as the Ford Focus Electric or the Nissan Leaf—whose sticker prices are still higher than those of conventional cars, but whose overall lifetime costs end up being comparable because of lower maintenance and operating costs—would be adequate to meet the needs of the vast majority of U.S. drivers.
• For EV ownership to rise to high levels, the needs of drivers have to be met on all days (not just 87% of them). For days on which energy consumption is higher, such as for vacations, or days when an intensive need for heating or cooling would sharply curb the EV’s distance range, driving needs could be met by using a different car (in a two-car home), or by renting, or using a car-sharing service.
• Car sharing of internal combustion engine vehicles could play significant role in driving electrification.
• Even as batteries improve, there will continue to be a small number of high-energy days that exceed the range provided by electric vehicles. For these days, other powertrain technologies will likely be needed.
• The potential for shifting to EVs is fairly uniform for different parts of the country.

The study team is developing an app that would take the data they compiled and help a driver predict when they will need a conventional car to get from point A to point B and home again over the course of a day. The prediction would be based on factors such as distance, the amount of time spent traveling at high speeds on highways, and whether the weather will require a lot of heat or air conditioning.

4. Ford: Ford Targets Fully Autonomous Vehicle for Ride Sharing in 2021; Invests in New Tech Companies, Doubles Silicon Valley Team

Last week, Ford announced its intent to have a high-volume, fully autonomous SAE level 4-capable vehicle in commercial operation in 2021 in a ride-hailing or ride-sharing service. And to get there, Ford is investing in and collaborating with four startups to enhance its autonomous vehicle development, doubling its Silicon Valley team and more than doubling its Palo Alto campus.

Plans are to design it to operate without a steering wheel, gas or brake pedal, for use in commercial mobility services such as ride sharing and ride hailing within geo-fenced areas and be available in high volumes. Ford will triple its autonomous vehicle test fleet this year to be the largest test fleet of any automaker – bringing the number to about 30 self-driving Fusion Hybrid sedans on the roads in California, Arizona and Michigan, with plans to triple it again next year.

5. Fast Company: Self-Driving Cars Will Be Great For Cities–But Only If We Change How We Use Cars

Fast Company reviews a recent BCG study on the societal impacts of self-driving vehicles (SDVs), the future of which the consultancy says is not a question of if but when. The benefits are negligible to considerable depending on how these cars will be used, according to several scenarios BCG developed:

1. The Premium Car That Drives Itself: In the first scenario (roughly for the year 2030) autonomous cars are mostly high-end affairs for the best cars and most time-starved drivers. This reduces the number of cars in circulation only a little (about 1%) but nonetheless leads to a 20% drop in accidents because SDVs are that much safer.
2. SDVs Rule the Streets: In the second scenario, SDVs replace most traditional cars but they’re still mostly privately owned. Only one in ten vehicles is shared, producing an 8% overall drop in circulation cars as a result. Accidents drop 55%, and there’s marginally more parking space.
3. Robo-Taxis Take Over: A nightmare for cab drivers: self-driving robo-taxis become the predominant way to get around. There are 50% fewer cars on the streets because people give up their personal vehicles, and 40% more parking space. Cities disincentivize private travel.
4. The Ride-sharing Revolution: Finally, robo-taxis not only become the default mobility method, but also people agree to share taxis, further driving up the social gains. “Ride sharing frees up more parking space (54%) and further lowers the number of cars needed to provide the same level of mobility to the population (59%). Accidents decrease by 87%,” the BCG report says.

BCG stresses these are relative, not actual numbers, noting the benefits of SDVs are likely higher if they provide a better form of private mobility (or, in the case, or ride-sharing, semi-private mobility), rather than replacing people’s existing travel patterns.