Energy Transition: When Will Electrical Mobility Take Over?

What's your analysis of French and European energy policy?

On a global scale, energy consumed for living, industry and transportation comes 80% from fossil resources (petrol, gas, coal, nuclear). In France, it represents 84%, which isn't very good. However, our electrical consumption is more "positive" as it's carbon free thanks to nuclear energy production (71.6% in 2017) and renewable energy (18.5% in 2017). In 2015, a law on the energy transition was passed and it opens new perspectives by confirming the government's desire to reduce our nuclear production and increase renewable production.

Currently, the multi-year energy production plan is being debated and it will have an decisive impact on our energy transition. These debates highlight a major effort in terms of national energy policy to organize this transition. Europe is already very advanced in terms of energy policy. Its roadmap is the most ambitious worldwide and anticipates serious advances by 2030 (27% for renewable energy, +27% for energy efficiency and -40% for greenhouse gas emissions).

What are the perspectives on a ban of traditional vehicles by 2040?

Nicolas Hulot, the French Environmental Transition Minister, announced a goal of stopping the French sale of diesel and gas vehicles by 2040. Other countries such as Norway, the Netherlands and the U.K. have similar goals for the next 20 years. In Germany, old diesel vehicles could be banned nationally. However, our overall analysis of the Energy Market Barometer highlights the fact that there still remains a long road ahead if we wish to truly transition from our current model of mobility.

What are the major trends in terms of developing electrical mobility?

Approximately 750,000 electrical vehicles were sold in 2016, of which half were sold in China (according to the global report by the International Energy Agency). This market should continue to grow through 2020 and anywhere from 9 to 20 million electrical vehicles should join our roadways. In 2016, public infrastructures for recharging vehicles also grew by 72%. In France, almost 31,000 electrical vehicles were registered in 2017.

This figure is equivalent to 1.2% of our market, which is far behind the European champion, Norway, where 17% of sales are for electric vehicles. Sales in Germany are lower, but are close to France. To support the sale of electrical vehicles, several European countries have implemented policies to reduce prices. In France, 6,000 euros can be deducted from the price and this can be combined with a 2,500 euro bonus if the new vehicle replaces a diesel vehicle that is more than 16 years old.

What factors explain the major difference in sales in Norway versus France or Germany?

The primary factor is important political support for tax exemptions, deductions and various advantages (e.g., VAT exemption equivalent to 25%, free toll booths, the right to use bus lanes, free parking or charging stations in various cities, etc.). This difference can also be attributed to the fact Norway's actions were launched more than a decade ago with the goal of having a completely carbon free fleet by 2025. While Norway is still a major exporter of oil, its electricity is mostly derived from hydropower.

High prices and low autonomy are some of the major issues slowing down growth of the electrical market in Europe. Could you comment on this?

Experts are rather pessimistic on this point and perceive there to be a number of important challenges that have to be overcome before electrical vehicles can be competitive with traditional cars. The key priority cited by experts is to improve technology in order to reduce prices and increase autonomy. The price tag for electrical vehicles is currently 15 to 25% higher than for traditional vehicles. As production ramps up in the near future, this increased volume should help reduce costs, in particular the cost of batteries. Automobile manufacturers such as Tesla (whose Model 3 sells for 35,000 dollars) and Renault are aiming to produce an electric vehicle (e.g., Renault Kwid) that could sell for 7-8,000 dollars in China by 2019. China is still the leading market for electrical vehicles and electrical scooters are also an important part of the market.

Low autonomy is also a key challenge as most electrical vehicles are limited to 250 kilometers (although this is double for the Tesla Model S). Another factor is the slow installation of charging stations. By the end of 2017, France counted 20,000 charging spots across 7,200 stations. Along the same lines, long charging times are also a barrier (up to 12 hours, although there are a few 30 minute rapid charge stations). While the Ademe as well as several local authorities and energy actors are supporting and investing in charging stations, the current pace could be too slow.

In sum, we need a change of perspective in terms of politics, technology and behavior if we want our energy transition to be successful.