The electric vehicle bet

The case is heard: at 1eh January 2035, no more internal combustion vehicles can be sold in Europe. This is one of the commitments made by the European Union to combat climate change.

Public policies are already implementing additional measures with direct or indirect restrictions on use (dedicating an increasing part of public roads to soft mobility at the expense of the car, imposing Low Emission Zones on the main cities, etc.), state subsidies for electric vehicle equipment (Norway leads and France is in the middle) and a transition strategy to all-electric decided by manufacturers (VW gives the example of a planned switch to all-electric and intends to challenge Tesla for leadership of the sector). This proposal in the middle of the European “fit for 55” program will cause a real industrial tsunami.

First, because it will lead to the collapse of the industry and the desertification of regions with old automobile industries. Then because it will cause cascading bankruptcies among subcontractors (particularly diesel) and even car-related service companies. Finally, because it is at the origin of a major shift in production from Europe and the USA to China.

An industrial tsunami

Let’s consider the effects of this industrial tsunami in more detail. The automobile was at the heart of industrial specialization in Europe. 500,000 jobs are at risk in the thermal sector, according to the most reliable estimates, and job creation in the electric sector will be halved, meaning a negative net balance of 275,000 jobs. There are many reasons for this: fewer workers are needed to produce an electric vehicle (EV): 3 against 5 for a thermal vehicle because fewer parts need to be assembled (70 for electric against 300 for thermal); a dense fabric of diesel subcontracting SMEs has developed over time; garages and private repair dealers (EVs, with simpler engines, on the whole) will struggle.

The delay taken by France compared to China, to take this example, will further aggravate the trade deficit (17.9 billion euros deficit in 2021 while France had a surplus in the early 2000s). Such a transition to electric also assumes a massive increase in the power of charging stations throughout the territory and a fine mesh of the motorway network. However, until now, the delays have been systematic.

Finally, the positions seem to have been taken: the United States with Tesla settled in the Luxury niche; China is the global leader and is already flooding the entry-level car market and the rental fleet segment; for Europe, it joins the movement by removing technical barriers to entry into its market and by subsidizing the acquisition of EVs without concern for replacement. In other words, everything is in place for China to become the world leader in the ecosystem. According to a study by the International Council for Clean Transport, cited by Xerfi, the Asian giant concentrated 44% of the global production of electric vehicles in 2020 before Europe (25%) and the United States (18 %).

The carbon footprint of electric vehicles

Such a proactive policy was decided on the basis of an indisputable goal: the fight against climate change. But is it true? Are we sure that EV will eliminate greenhouse gas emissions related to individual mobility and drastically reduce the carbon footprint of urban transportation vehicles?

  • Yes, if we are satisfied with the carbon footprint of electricity consumption in relation to gasoline or diesel consumption and then we neglect the rest, in line with other ongoing IPCC reviews of countries that produce their electricity from decarbonized that way. . The bill for imported hydrocarbons will also decrease significantly compared to exporting countries where it is not always prudent to maintain close dependence. In 2020, the bill for refined products intended for transport reached almost €40 billion in France…
  • No, if the electricity used is carbon-based, which is the case in Germany with gas or coal-fired electricity or in Italy with gas-fired electricity. In a country like Germany, new lignite mines were opened and the exit from coal was planned for 2038 and then 2030 before the war in Ukraine reshuffled the cards.
  • In fact, electricity is gaining use, but faster or faster depending on the country’s energy mix. In a country like Norway where almost 100% of the electricity produced is carbon-free, an electric vehicle must travel at least 40,000 km to show a balance in terms of CO2 equivalent to a thermal vehicle . This is more in China and the United States where electricity production is of fossil origin (oil, gas, coal). On the other hand, with its 95% carbon-free electricity, France is EV-ready as long as it implements its new nuclear program.

If we do a complete carbon balance of the production and use of electric vehicles and if we remember that the mass of atmospheric CO2 is 3200 billion tons and the annual increase is 16 billion tons of which 1.6 for developed countries and including 0.3 for European road traffic, then the advantage is less clear. So, according to Ademe (the Environment and Energy Management Agency), it takes about 70,000 megajoules to produce a petrol or diesel car, compared to 120,000 to produce an electric one. The bigger the model, the bigger the gap: 12 tons of CO2 for a Tesla, against 5 for the thermal equivalent.

And if we consider the construction and deconstruction of batteries, the advantage is not so clear. The carbon footprint of building and removing batteries is so negative that we are looking for other solutions. So, now it is expected to separate vehicle ownership and battery ownership to avoid dispersal of these things. Also considering replacing batteries at stations equipped for this purpose rather than recharging them. Another life is expected for these batteries after 8 years of vehicle use.

Manage the transition

If the carbon footprint of the EV is still in question and if the economic footprint is a concern for Europeans, two questions arise: why did we accelerate the scheduling of a major change in ” fits 55 and how to deal with the limitations of existing solutions?

No one opposes the climate emergency and there is no available solution other than the EV, at the time these lines were written, as a replacement for the thermal vehicle for long and medium distances in dispersed housing. So it’s understandable that the EV bet is tempting. In addition, public opinion has been mobilized on the climate issue and environmental issues are one of the areas where the authority of the European Commission has asserted itself over time as the countries of the North have pushed in the direction that it and the nations from the South followed suit.

Moreover, in economic matters, only 3 countries are the main producers, Germany, France and Italy, and therefore will suffer the shock of relative deindustrialization caused by the end of the thermal vehicle, the others, that is, the remaining 24, being important consumers. Finally, DieselGate played a major role in speeding up decision-making in Europe as diesel vehicle manufacturers were caught in the act of manipulating governments and users and organized fraud, thus losing all credit for developing planting strategy.

Once the decision was made, manufacturers accelerated the move by announcing ambitious plans to switch to EVs. The reason is simple: they need long-term visions to set their strategies and rethink their productive organization. Today, industrial commitments are close to irreversible. Opel announced the transition to all-electric for 2028, the Stellantis will be 100% electric in Europe by 2030 and the same will be the case for Renault.

Beyond the transition to electricity, manufacturers face more pressing challenges: they must invent an industrial model to deal with the revolution in use. They are manufacturers and sellers of technical things, they must learn to sell mobility services and therefore reinvent themselves even if they have to change their production equipment. Mobility as a service can further replace the individual car, whether thermal or electric: public transport and soft mobility in the heart of agglomerations; Metropolitan RER and high-frequency express coaches at certain outbound interchanges.

And some commuter mobility may be reduced, particularly home/work journeys with the rise of teleworking. Therefore, it is the modal share of the individual vehicle that threatens to decrease in all forms of mobility, at a time when manufacturers must make this technological and managerial leap. If this modal share drops significantly, the industrial tsunami may be worse than predicted here, but the carbon footprint is better, the hydrocarbon import bill is lighter and the trade deficit with China is less steep.

Electric or thermal, a vehicle that spends 95% of its life in a garage represents a waste of resources despite the high carbon footprint to do so. On the other hand, promoting the production of luxury electric SUVs instead of small thermal cars is an ecological aberration, but this is the path car manufacturers are taking to maximize their margins and finance the ecological transition .

What can we conclude from the paradox exposed here: a more stable economic commitment in favor of electricity, while the ecological issues that motivate it remain discussed?

The closer we get to the deadline for the transition to all-electric, the more we will consider the political choice made, especially in terms of production on European soil of thermal vehicles, and the speed of the transition to all- EV. But by then, electricity will have won market share and clearly established its dominance. Such a scenario has many consequences:

  • The transition measures adopted should take into account the value of EV for the most average households. Low-cost long-term rental solutions for small electric vehicles need to be invented.
  • Public authorities need to subsidize charging equipment more.
  • A symmetry needs to be established between the United States and Europe in terms of access to public assistance for EV equipment.
  • Manufacturers will need to manage the complexity of two production systems: one for thermal vehicles intended for export outside Europe, and the other for EVs for European use at most , while negotiating a move to a range of mobility services.
  • Solutions remain to be found for the battery economy but this will not prevent the EV from inhabiting the landscape in a modified framework where vehicle ownership or the battery will decrease, and usage consumption will develop. .

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