Published on February 12th, 2019 | by Carolyn Fortuna
February 12th, 2019 by Carolyn Fortuna
We’ve all read the stats: transport represents 23% of global energy-related CO2 emissions. With demand for mobility increasing exponentially, transport is the fastest growing source of greenhouse gas (GHG) emissions. The number of privately owned vehicles is expected to double to 2 billion by 2050, which would mean that 33% of GHG emissions would be attributable to transport then. But the pace of progress on electric vehicles (EVs) is a great cause for optimism, says the Climate Group, which launched EV100 in September, 2017. Since then, 31 major companies with over half a trillion dollars in combined revenue have joined to accelerate the transition to EVs. The first EV100 Progress and Insights Annual Report analyzes companies’ fleet and charging commitments, identifying climate action as a key driver.
“Business Driving Demand for Electric Vehicles,” published February, 2019, is the Climate Group’s self-analysis of its EV100 initiative, which brings together companies committed to accelerating the transition to EVs. By the end of its first year in September, 2018, EV100 had brought together 23 leading companies committed to electrifying 145,000 vehicles across their operations by 2030. EV100 provides a platform for committed companies to showcase their leadership, share best practices, and engage with the policymakers, industry players, and investors who are shaping EV markets.
By championing the benefits, the members inspire others to step up.
EV100 members sign up to one or more of 4 global commitments by 2030:
- EV integration into directly controlled (owned/leased) fleets
• 100% of vehicles up to 3.5 tons (7,000 lbs) to be EV
• 50% of vehicles from 3.5 tons-7.5 tonnes (7,000-15,000 lbs) to be EV
• Alternative for logistics companies: all urban/last mile delivery to be EV
- EV in service contracts (e.g. daily rental, contracted taxi providers, car sharing)
- Supporting EV uptake by staff
• Charging infrastructure installed at all relevant premises
• Dedicated awareness program/incentive schemes to promote EV usage
- Supporting EV uptake by customers
• Charging infrastructure installed at all relevant premises
• Dedicated customer engagement program to promote EV usage
With the economic cost of air pollution estimated at $2.6 trillion annually, 26 global cities have now pledged to set up zero emission zones by 2030 through the C40 Green and Healthy Streets (Fossil Fuel Free Streets) Declaration. According to the Climate Group, these policy signals are influencing leading businesses to act. Leadership and reputation, they say, are also “very significant” or “significant” motivations (96% and 84% of members respectively). Pioneers of new solutions such as EVs tend to look long term, seeking to safeguard enduring corporate value by positioning themselves ahead of the curve on vital societal shifts.
Findings of the Climate Group’s First Year: EV100 Drivers
The financial business case will be increasingly important in the years ahead. EVs are expected to reach price parity with internal combustion engine vehicles (without subsidies) by 2024. This is due to the plummeting costs of EV batteries, following a similar cost curve to solar power. Battery pack prices fell by 85% between 2010 and 2018, from $1,160/kWh to $176/kWh11. In some markets, EVs are already competitive with other vehicles on a total cost of ownership (TCO) basis, especially for vehicles with high usage rates. This is partly because electricity is cheaper than fuel, partly because EVs have fewer moving parts and require less maintenance, and partly thanks to supportive government policies.
A lack of charging infrastructure is cited as a “very significant” or “significant” barrier by 71% of EV100 members. The barriers with the highest “very significant” scores are the current up front cost of EVs (33%) and the lack of EV options in key markets (24%). The Climate Group is taking further steps to land this market signal with the auto industry. The Zero Emission Vehicle (ZEV) Challenge brings together leading businesses, cities, states, and regions in a call to action to the auto industry to accelerate the roll-out of EVs.
As Tex Gunning, CEO of LeasePlan, explains: “Although we’re seeing the appetite for EVs rise every day, the vehicles, infrastructure or policies to meet this demand aren’t there yet. We’re therefore delighted to join the global ZEV Challenge and work with the industry to make zero emissions a reality.”
It is not just cars that are being electrified. Despite members identifying market immaturity as a key barrier to progress, especially for commercial vehicles, they are, nevertheless, expressing significant demand for this segment. Members have pledged to source a further 87,000 electric commercial vehicles by 2030, almost double the number of passenger vehicles (44,000). Several members are also working to influence the companies with which they do business. Over half of EV100 members making service contract commitments now require EVs from taxi and car rental providers. This is often part of a broader sustainable business travel policy.
EV100 members reporting in September 2018 have committed to install charging infrastructure at more than 2,000 workplace and customer parking sites around the world, with charging already installed at 429 sites (21%). By 2030, the workplace charging commitments will facilitate EV charging for 632,000 employees. Almost 6,000 charge points have already been deployed for staff and customers, and more than 6,000 to support fleet charging.
Looking Ahead to Pervasive EV Adoption
The Climate Group offers several future scenarios which will increase the motivation for companies to switch to EVs.
EV charging is a service that can be sold to customers for a profit. However, it is increasingly common to view EV charging not as a transaction but as a way of adding value to a business by attracting and retaining high-value workers and customers. Customers are coming to expect EV charging as standard at shopping centers, retail sites, and hotels.
Similarly, companies can attract and retain the best talent in their workforce by offering attractive employee benefits that reflect their values. Innovative charging solutions such as smart charging and vehicle-to-grid, which can offer valuable grid balancing services, present unique new commercial opportunities. These are especially valuable at sites where EVs are parked for a long time, such as airports.
For manufacturers bringing forward products to meet growing demand, there are major contracts to be won. While the private sector is vital to accelerating the transition, companies cannot achieve their EV100 goals without the support of policymakers – from national governments to regions and cities, who share the same overall objectives. The internal combustion engine vehicle phase-outs announced by more than a dozen countries, and zero emission zones to be established by over two dozen cities, have set clear markers on the direction of travel. These must work in harmony with suitable incentives to promote and mainstream EVs, which should be gradually reduced as the industry matures and EVs approach price parity with internal combustion engine vehicles.
There is no room for complacency, the Climate Group admonishes.
In spite of the rapid growth of EVs in recent years, the transition needs to accelerate dramatically to limit global warming to 1.5°C. EV100 will continue to grow and strengthen its demand signal, accelerating the market transition. EV100 members are also bringing their customers and employees with them on the journey, showing that EVs are not just for the distant future, but here already, and here to stay.
Infographics and image courtesy of The Climate Group
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