Carmakers set to produce enough EVs to meet CO2 targets

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Clean transport campaign group Transport & Environment (T&E) reports that car manufacturers will produce more than enough electric vehicles to comply with their CO2 reduction targets if they stick to their plans, following new analysis from IHS Markit.

The production of electric cars and vans in Europe is set to multiply six-fold between 2019 and 2025, by which time 22% of vehicles produced could have a plug – more than enough to meet the EU’s car CO2 standard for that same year.

There will be 214 electric models on the European market in 2021 – up from the 60 available at the end of 2018, according to T&E analysis of IHS Markit’s data. This will be more than enough for manufacturers comply with the EU car CO2 target of 95g/km.

This will dispel doubts voiced recently by carmakers that the EU CO2 standards were too strict to comply with. Manufacturers are expected to use this month’s Frankfurt motor show to pressure EU lawmakers into weakening the standards and the penalties for non-compliance.

T&E’s transport and e-mobility analyst, Lucien Mathieu, said: “Thanks to the EU car CO2 standards, Europe is about to see a wave of new, longer range, and more affordable electric cars hit the market. That is good news but the job is not yet done. We need governments to help roll out EV charging at home and at work, and we need changes to car taxation to make electric cars even more attractive than polluting diesels, petrols or poor plug-in hybrid vehicles.”

However, in the UK the supply of electric cars may be a trickle compared to those in Europe while production of electric models could fall behind European competitors, the analysis warns. In the event of a ‘no deal’ Brexit cars sold in the UK will not count towards the EU target and carmakers will therefore prioritise supplying electric cars in countries where sales help meet their targets.

While the UK government consulted on proposals to introduce a car CO2 scheme in 2018, it has not yet released the text of the proposed new UK rules. With the new EU regulations due to start from 1 January 2020 there is almost no time to implement an equivalent UK scheme that requires parliament approval if the UK exits the EU on 31 October.

T&E’s UK director, Greg Archer, said: “If the UK leaves the EU with no deal it will no longer be part of these rules and the cars sold in the UK won’t count towards meeting the carmakers’ targets. As a result, electric cars simply won’t be made available in large numbers in the UK, slowing progress in the shift to zero emissions cars here.”

If the UK crashes out without a deal it may also lose out as a production centre of EVs. The production forecasts show electric car manufacturing steadily replacing diesel engine manufacturing across Europe, with the biggest production centres set to be in western Europe – Germany, France, Spain and Italy. But Slovakia is forecast to be making the highest number of EVs per capita by 2025. Czech Republic and Hungary will also be significant production centres.

However, the UK’s future as a producer remains uncertain: T&E’s analysis of IHS Markit’s forecasts found that manufacturing of cars with engines in the UK will decrease by 7% from 2019 to 2025 – but total car production could increase by 11% over the same period due to anticipated production of electric cars and vans. However, the planned production of battery-electric and plug-in hybrid cars manufactured in the UK by 2025 (355,000 units) is significantly less than that forecast for France (785,000); Germany (1,591,000); and Spain (510,000). In the event of a ‘no deal’ Brexit, the UK’s prospects could be dented even further.

Also, 16 large-scale lithium-ion battery cell plants are confirmed or likely to come online in Europe by 2023 though none are in the UK. The confirmed plans alone will deliver up to 131GWh of battery production capacity, according to data from Benchmark Mineral Intelligence – enough to cover the estimated 130GWh that will be needed by EVs and stationary storage batteries across Europe in 2023.

Battery manufacturing on this scale will create around 120,000 jobs directly and indirectly in the battery value chain, according to T&E analysis based on data from the EU’s Joint Research Centre. But the EU will also need to ensure batteries sold in Europe have a low carbon footprint and are reused, recycled and sourced ethically.

Mathieu concluded: “This is a pivotal moment for Europe’s automotive industry. Carmakers are investing €145bn [£130bn] in electrification, and battery making is finally coming to Europe. Success in this area is a top EU industrial priority. We need to send a clear signal to industry that there is no way back, and agree a phase-out of petrol and diesel car sales in cities, at national and EU level. The age of the combustion engine is coming to an end.”

Source: Transport & Environment