Study warns of tight schedule to switch to EVs

A brisk transition to zero-emission vehicles is underway, but it’s still unclear whether the global transportation sector’s makeover is enough to stave off the worst consequences of climate change.

Cars and trucks account for three-quarters of all transportation-related greenhouse gas emissions, including planes, trains and ships, according to McKinsey & Co., and automakers and commercial truck manufacturers will have to accelerate their push to reach net-zero targets by the middle of the century.

Those goals are firm, but the path to achieving them is less so.

“How we get there is not written in stone,” Eric Hannon, partner in McKinsey’s Center for Future Mobility, told Automotive News. “Frankly, we’re moving too slow. We aren’t on a trajectory that gets us there yet.”

Hannon is co-author of “Mobility’s Net-Zero Transition: A Look at Opportunities and Risks,” a new report that assesses the state of electrification efforts and how they may affect the auto industry and climate itself in the decades ahead.

Growing consumer demand for electric vehicles has prompted optimism. EVs account for 8 percent of new-car registrations in Europe, according to the McKinsey report. In the U.S., battery-electric vehicles, hybrids and plug-in hybrids combined surpassed 10 percent of new-vehicle sales in the fourth quarter of 2021, according to numbers issued in February by the U.S. Energy Information Administration.

But the charging infrastructure to support the demand still requires a substantial amount of construction, Hannon said. He estimates that Europe alone must add 10,000 chargers a week for EVs to help meet 2030 climate targets.

“The numbers around that are astounding,” Hannon said during an appearance on an episode of Automotive News‘ “Shift: A Podcast About Mobility” last week. “To be on that net-zero path, we’re talking about thousands of chargers per day to be installed globally from now through the rest of the decade. The infrastructure need cannot be underestimated.”

That need increases as the climate crisis grows more precarious. The Intergovernmental Panel on Climate Change warned in April that the globe faces a “now or never” moment in which carbon emissions must peak by 2025 to keep temperature increases within a 1.5-degree Celsius range this century.

Getting more traction will require consumers to accept higher upfront costs for vehicles in exchange for total-cost-of-ownership benefits down the road. McKinsey’s report says that cost parity with comparable internal combustion engine vehicles will be achieved in Europe by 2025 and in the U.S. by 2030.

“A lot of people recognize that if they invest more in a good pair of shoes, it’s going to last a little bit longer,” Hannon said. “If you’re going to hold on to your vehicle long enough, the payback is clear.”

Batteries make up a substantial amount of an EV’s cost. Even as costs for the raw materials needed to make batteries rise in the short term, the downward trend of overall EV prices will continue for a while before leveling out in the next decade, Hannon foresees.

Efforts to establish domestic supply chains for those materials and make battery breakthroughs that improve storage and efficiency are ongoing. This month, the U.S. Department of Energy made $3.1 billion in funding available to support commercial battery facilities and development of supply chains.

The White House has set a goal of ensuring that ZEVs account for half of all new-vehicle sales by 2030. That is barely enough time to thwart the more grim scenarios outlined by the climate change panel, McKinsey concluded.

“If we wait 10 years or 15 years to start thinking about this and start acting in earnest, it’s too late,” Hannon said. “Then it becomes incredibly bumpy and incredibly difficult and problematic.

“But if we have precision and clarity as far as where we need to go as an industry already today, then there’s hope we’ll … go down that path.”

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Source : Autonews.com

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