A new report by the World Energy Council looks at how many EV cars will be needed to meet the increasingly rigorous emissions and fuel economy standards around the world. Entitled World Energy Perspective 2016: E-mobility: closing the emissions gap, the report finds that the combined EV market share will need to increase to 16% by 2020 in order to meet the targets set by regulators. That market share is currently less than 1%. in other words, there is a long way to go and short time to get there.
Combined, the world’s three largest auto markets — China, the EU and the US — have annual sales of over 40 million passenger vehicles. All three have set fuel economy improvement targets of approximately 30%. Improvements in internal combustion engine technology will help, but there will still be what the WEC calls an “emissions gap.” Only adding substantially more electric vehicles to the total will close that gap.
For the US, the emissions gap translates to 0.9 million cars, or 11% of estimated 2020 sales. The comparable figure for the EU is around 10% of sales. But for China, which has the most aggressive goals, EVs will need to be 22% of sales.
Reaching the 16% market share figure that would close the gap will obviously require automakers to radically rethink their electrification plans. But the auto industry is not the only sector that will face major changes. “To help close the emissions gap through more widespread adoption of EVs, utilities need to play a critical role,” said Stuart Solomon, Managing Director of Accenture Strategy, which collaborated on the report. “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.”
That last part is critical. Greening the power grid is a fundamental element in all scenarios for reducing total global emissions in accordance with the climate change agreements made by all the nations of the world at the COP21 summit in Paris last December.