Don’t let European carmakers lose the race to electrification

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Managing Director and CEO, Maruti Suzuki India Limited Kenichi Ayukawa (2-L) stands along with other senior officials as they launch the concept car IGNIS at the Indian Auto Expo 2016 in Greater Noida, Uttar Pradesh, on the outskirts of New Delhi, India, 04 February 2016. [EPA/RAJAT GUPTA]

Stronger clean car standards and electric vehicle (EV) incentives will help Europe’s automakers remain competitive in the rapidly electrifying global market, writes Ashok Jhunjhunwala.

Ashok Jhunjhunwala is a Professor in the Department of Electrical Engineering at the Indian Institute of Technology. He previously led India’s government planning commission on electric vehicles.

If the European Union wishes to make good on its carbon emission reduction pledges and remain an international climate leader, it is time to get serious about transportation solutions.

As domestic transportation accounts for roughly one-fifth of all of Europe’s greenhouse gas emissions, its leaders must accelerate the shift to clean mobility. Similarly, if they take lead in introducing Electric Vehicles in their exports / overseas manufacturing, their climate leadership will be strengthened.

Stronger clean car standards and electric vehicle (EV) incentives will not only help bring the EU’s commitments under the Paris Agreement within reach but will help Europe’s automakers remain competitive in the rapidly electrifying global market.

European brands have so far largely lagged behind Asian and American manufacturers in the race to deliver mass-market plug-in vehicles. Meanwhile, the general public is waking up to the benefits of driving electric—four out of every ten European drivers surveyed, for instance, said that they expect that the next car they buy will be electric.

The opportunities will be even greater abroad, especially in rapidly industrialising countries like China and India. While it’s true that my India currently has only about 6,000 electric cars on the road, the Indian government earlier this year set a goal of 30% of all new vehicles sold by 2030 to be electric.

In fact, another view in the government is to have 100% of new vehicles as electric by then. Moreover, several cities and states are creating their own EV policies, many of which are even more ambitious than the national plan. The Delhi government, for instance, just released a draft proposal to just target one-quarter of all new vehicle registrations in the city to be electric within the next five years.

As the world’s fourth-largest auto market—with more than 4 million new automobiles sold last year, outpacing even Germany for the first time—these national and subnational goals will almost certainly create enormous demand for electric cars, and more importantly, help set up the supporting infrastructure on the ground.

Whether or not European automakers will be able to compete in this market—and in China, where analysts expect more than 1 million electric vehicles to be sold this year alone—will likely be determined by the strength of the policies set today by Europe’s leaders.

Just last week, the European Commission proposed a strategy to cut EU’s emissions to net-zero by 2050, and in it, laid clear the necessity of cutting transportation emissions.

However, near-term policies and incentives are needed to immediately jolt European car companies to clean up their fleets. Tougher CO2 emissions standards for cars, vans, and trucks are currently being discussed, and is a much needed first step. An even stronger signal to carmakers would be electric car sales targets, to match or exceed other large markets, which the European Parliament is currently, and laudably, pushing for.

Currently, European companies have a tiny presence in India’s car market, accounting for just 4% of vehicle sales. Europe will remain a bit player if companies like Volkswagen, Renault, and BMW don’t start to design and offer zero-emission models at prices that are attractive to mid-market Indian buyers. EV provides a large opportunity for European companies to establish itself as a leader in a market, where there are bit player today.

Besides traditional four-wheel personal vehicles, there is great opportunity in electrifying other forms of transportation. Three-wheel rickshaws are hugely popular throughout Indian cities and sales increased by 24% the last fiscal year. There are already roughly 1.5 million electric rickshaws on Indian streets—each one having displaced a two-stroke engines that spewed both greenhouse gases and air pollutants.

Together they have made India home to ten of the world’s most polluted cities.

Yet, despite the fact that the Italian company Piaggio is the second largest seller of rickshaws in India, it has entirely missed out on the e-rickshaw boom, with no electric models yet offered for the Indian market.

The meteoric proliferation of e-rickshaws has proven that the swift transition to clean mobility is possible when the conditions are right. When this electric revolution spreads to car sales in India, will European automakers be ready to compete? Already, India’s domestic car companies—Mahindra & Mahindra and Tata Motors—are developing affordable EVs for the mass market, to compete with other forward-looking Asian brands.

Ultimately, competition to build and sell quality electric cars across all vehicle classes will benefit everyone. To clean up our cities’ dirty, dangerous air, we must stop spewing fumes and particulates from our tailpipes. To combat the climate crisis, its important that we bring a hasty end to the age of the internal combustion engine.

Also as world leaders gather for the United Nations climate talks this week at COP24 in Poland, it’s an opportunity for all countries to commit to ambitious cuts in transportation emissions to fulfil their pledges under the Paris Agreement. It’s an opportunity for nations to compete – to challenge one another to strive for even stronger goals, and to race to build the electric cars that the world needs.

Thus while I’m proud of the strides Indian carmakers are making in electrifying their fleets, I also want to see electric models from European brands on the streets of New Delhi and Chennai.

The European Union will suffer if its automakers aren’t at the forefront of the electric car revolution. Given the global nature of greenhouse gas pollution, the rest of the world will suffer, too, if Europe isn’t equally involved in decarbonising transportation.

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