According to BNEF, the electric vehicle revolution is underway as more companies phase out diesel- and gasoline-fueled cars and transition fleets to EVs.
More companies are transitioning their fleets to electric vehicles, and for good reason. Though the up-front price of a zero-emission electric vehicle is still relatively high, the all-important lifecycle costs are competitive with conventional vehicles. Just as importantly, clean, quiet, zero emission vehicles give companies a competitive edge when it comes to winning the hearts and minds of consumers, supply chain officers and fleet managers.
A new EV forecast from the clean technology research firm BloombergNEF (BNEF) underscores how quickly electric vehicles will come to dominate the transportation landscape.
The message is clear for fleet managers: as your older vehicles need to be phased out, now is the time to transition to EVs. Otherwise, you’ll be stuck with a conventional fleet of conventional vehicles while the competition surges ahead on zero-emission technology.
BNEF’s head of advanced transport, Colin McKerracher, explains:
“…Electrification will still take time because the global fleet changes over slowly but, once it gets rolling in the 2020s, it starts to spread to many other areas of road transport. We see a real possibility that global sales of conventional passenger cars have already passed their peak.”
The new report, titled Electric Vehicle Outlook 2019, describes several distinct aspects of the EV market.
BNEF foresees the quickest transition in the category of passenger cars, buses and short-haul trucks.
The report estimates the proportion of global EV sales as compared to all vehicle sales by 2040 and forecasts a 57 percent market share for passenger cars.
Municipal buses fare even better at 81 percent.
BNEF broke the category of short-haul trucks down into light and medium weight. At 56 percent, light trucks will penetrate about as rapidly as passenger vehicles in Europe, the U.S. and China.
The outlook for medium trucks is far more modest, at only 31 percent.
That’s partly because EV batteries are heavy and bulky. They take up weight and space that could be used for cargo.
Time is a key consideration in the razor-thin calculations that characterize today’s logistics sector, so another factor is the time it takes to charge a truck-sized battery pack, compared to fueling up a gas tank.
Those disadvantages come into sharper focus in the category of heavy duty, long haul trucks. BNEF forecasts only 19 percent market penetration in that market.
That doesn’t necessarily mean diesel-powered trucks will continue to dominate the medium and long-haul markets. BNEF foresees that other low or zero emission technology will also compete for attention from truck buyers.
BNEF cites natural gas as one potential competitor, but the outlook for hydrogen fuel cells appears to be much stronger.
For those of you who are new to the topic, fuel cell vehicles are electric vehicles. Instead of using a battery that must be charged over a period of time, fuel cells generate electricity on-the-go through a chemical reaction. They can be refueled in about as much time as filling up a tank of gas.
California and several other U.S. states have emerged as global hotspots for accelerating hydrogen fuel cell transportation, along with Japan and Europe. Those initiatives are taking place alongside efforts to produce hydrogen from renewable sources (currently the main source of hydrogen is fossil natural gas).
In particular, the U.S. startup Nikola has been accelerating the market for fuel cell trucks in tandem with renewable hydrogen production. The company expects to have 700 hydrogen truck fueling stations in operation by 2028.
Nikola launched pre-orders for its first long-haul fuel cell-powered semi in 2017. Last year, the company secured a pledge from Anheuser-Busch for up to 800 fuel cell trucks and this year it secured an agreement for a truck manufacturing facility in Arizona. The factory is expected to produce at an initial rate of 35,000 trucks annually and hit 50,000 per year when fully operational in 2024. Nikola is also venturing into the off-road and military vehicle categories.
UPS is also among the other U.S. companies experimenting with fuel cell technology.
Toyota is another fuel cell early adopter, and its vision of a zero emission “hydrogen society” demonstrates how fuel cell trucks could help accelerate the market for battery electric vehicles as well as fuel cell vehicles.
That’s because the main pathway for sustainable hydrogen production involves “splitting” water with an electrical current, sourced from wind turbines or solar panels.
In other words, renewable hydrogen can help incentivize wind and solar development, providing electricity for both sustainable hydrogen production and EV battery charging.
Toyota’s holistic approach is especially evident in its partnership with 7-Eleven, which involves on-site, sustainable hydrogen production. If all goes according to plan, this model could help companies like 7- Eleven grow without a consequent increase in their carbon footprint.
BNEF also highlights the changing role of passenger car ownership and usage patterns.
Here in the U.S. and elsewhere, interest in individual ownership has been dropping off a cliff as populations concentrate in urban areas where mass transportation, bicycles, and scooters offer working alternatives.
That leaves the door open for a new generation of fleet vehicles serving the needs of ride-share customers.
BNEF anticipates that ride-sharing fleets will electrify more quickly than individual car buyers, though the road to significant market penetration may be a rocky one.
For example, Ford was an early adopter of the mobility-as-a-service model, but it cut the cord on its Chariot ride-share service earlier this year.
Most importantly, the new BNEF report also throws down a challenge to companies that seek a vanguard position in the low carbon economy of the future.
Despite some strong indications that on-road vehicle emissions will plunge as 2040 draws closer, BNEF foresees that emissions will actually continue to rise over the next 10 years.
That’s a dire prediction in the context of the latest IPCC forecasts, but it also creates a golden opportunity for the sustainable business community to prove the forecasters wrong.
With the urgency of climate action in mind, and the costs of doing nothing continuing to mount, companies have ample incentive to transition to zero emission vehicles as quickly as possible.
Image credit: Pixabay
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.