Electric vehicles will need to increase their combined market share from the current 1 per cent to 16 per cent by 2020 to achieve the aggressive fuel economy standards set by regulators.
That’s the conclusion of new report by the World Energy Council, which states that EVs “should be considered central to any policy and technology portfolio designed to lower transport emissions”.
Christoph Frei, Secretary-General of the World Energy Council, said: “Over the past decade, we have seen the emergence of climate change and fuel price volatility as headline issues that keeps energy leaders awake at night. As a result, many countries have set ambitious fuel efficiency targets for passenger vehicles.
“The innovative role EVs can play in meeting these standards makes for a pragmatic step in closing the emissions gap by 2020. Looking beyond 2020, EVs and innovation in this area present a major growth opportunity not only for car manufacturers but for the energy sector as a whole.”
In the report ‘E-mobility: closing the emissions gap’ – published in collaboration with consultantcy Accenture Strategy – the World Energy Council states that in the next decade passenger vehicle manufacturers will be confronted with regulatory pressure and material penalties, as gains in fuel economy fall behind the required rates of improvement set to address environmental preservation and climate change mitigation.
It adds that with a collective annual demand of over 40 million passenger vehicles, three of the largest car markets in the world, the EU, US and China, have all set fuel economy improvement targets of approximately 30 per cent for cars from 2014-2020.
Stuart Solomon, managing director of Accenture Strategy, said: “To help close the emissions gap through more widespread adoption of EVs, utilities need to play a critical role – not only to ensure a reliable electricity supply, given the added pressure from plugging more EVs into an already stressed grid network, but also by making sure that any added demand for electricity to power EVs increasingly comes from clean power sources.
“Utilities can also play a leading role in bringing together key stakeholders from the automotive, technology and home services industries to encourage customer uptake of EVs through more attractive electricity tariff structures, combined with bundled product offers, such as connected car and home solutions. Customers could realise cost and lifestyle benefits as a result, while new revenue streams could benefit industry players.”