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Cleaning up transport: Electrifying the vehicle fleet

Exploring the impact of electrifying vehicles, and the role of governments and policies to adapt to this urban mobility transition.
© RMIT Europe and EIT Urban Mobility

Motor vehicles, traditionally powered by internal combustion engines (ICE) using petrol or diesel, are responsible for about 20% of global greenhouse emissions and are a major factor in urban air pollution.

Cleaning up these impacts at the source, ie. by designing and marketing emission-free vehicles, is a critical component of the 21st century urban mobility transition.

Electric vehicles (EVs) were originally co-developed with ICE vehicles in the late 19th century but fell behind as ICE technology improved more rapidly, enabling petrol-powered cars to become cheaper and more user-friendly in the emerging mass market. This discrepancy was particularly due to the slow pace of battery technology development during the 20th century, severely constraining EVs’ performance and cost competitiveness.

With the commercialisation of lithium-ion batteries during the 2010s, this situation changed: the cost, weight and energy density of batteries have now improved so drastically that EVs, at least in the automobile-sized category, can make inroads into the market of their ICE counterparts, supported by public policy that seeks to accelerate the transition:

‘The price tipping point for small EVs will likely be sometime in the 2020s as battery costs continue to drop and vehicle efficiency and greenhouse gas standards in China, Europe, and the United States start to push automakers beyond gasoline and diesel.’
(Sperling, 2018, p23)
However, EVs will only become zero-emission and non-polluting vehicles to the extent that the electricity they use is produced from carbon-free sources. Their performance is thus tied to the society-wide and economy-wide transition of the wider energy system. However, the drastic recent cost reductions in solar electricity and its suitability for creating a distributed system of power generation (as opposed to a centralised one, as with fossil fuels or nuclear energy) strongly support this process (see also Newman, 2022).

The role of public agencies

There is a broad role for public agencies to promote the gradual electrification of the road vehicle fleet. At the time of writing, the EU is considering a ban on the sale of new ICE vehicles after 2035 (or sooner in some member countries), thus prompting the car industry to develop and bring to market EVs in larger numbers and at a faster pace.
Public investment is also critical for building the infrastructure required for EVs, particularly the creation of a dense and distributed network of fast charging stations to mitigate the ‘range anxiety’ many users grapple with when considering the purchase of an EV (ie the fear of getting stranded with a flat battery a long way from a recharge point, or the need to curtail one’s travel plans to avoid such a scenario).
Reliance on private, home-based charging stations sometimes clashes with unfavourable regimes concerning the pricing of electricity consumption; however, reforming these with the aid of smart meters and decentralised electricity generation (eg solar panels on buildings) can provide win-win outcomes for both utilities and consumers:
‘The solution is for electric utilities to adopt new rate structures to accommodate and support the introduction of EVs. It is in their interest to do so because EV charging provides them a mechanism for managing their electricity loads more easily and cheaply. The new, more desirable approach will be to incentivise EV charging during times when demand is otherwise low, thereby allowing utilities to flatten the demand peak and spread the cost of their power plants and infrastructure over a larger base. If they can manage precisely when EVs are charged (…) they can treat the EVs as a massive storage pool.’
(Sperling, 2018, p42-43)
In some jurisdictions (Norway stands out as a pioneer here), the uptake of EVs has further been encouraged by measures such as (temporarily or permanently) waiving or discounting vehicle taxes, registration fees, road tolls or parking charges for EV users.
However, such policies point to a larger dilemma: as ICE vehicles are phased out, public revenue from petrol taxes will invariably decline (and eventually disappear altogether). Governments may need to explore new forms of fees or taxes to make up for the shortfall and to continue collecting financial contributions from road users towards those externalities of road transport that zero-emission vehicles cannot reduce, such as road building and maintenance, noise mitigation, traffic congestion, and the public health costs of traffic accidents and insufficient physical activity (see also Iveson, 2021).
By 2030, revenues from petrol taxes will be lost or reduced significantly with the shift from individual ownership of internal combustion engines to shared electric vehicle fleets. Governments whose budgets rely on this revenue could shift to road pricing and taxing of kilometres rather than fuels.
(Dia, 2019, p93)


Web resources

Can the evolution of transportation slow global warming? We explore this question in the next step.

© RMIT Europe and EIT Urban Mobility
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Transport Policy for Clean Air

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