U.S. vs. Europe

Europe Doubles Down on Electric Cars as U.S. Continues to Embrace Gasoline

The United Kingdom is the second country in Europe in the last month to implement a future ban on non-electric cars. Meanwhile, the United States looks to ease up on the regulation of fuel efficiency standards.

The future is in electricity—or at least, the future of the car industry. By looking at vehicle trends over recent years, it’s easy to see that the production and sale of electric vehicles (EVs) is on the rise. According to Forbes, in 2016 EV sales jumped to 36%. This is a strong turnaround from 2014 to 2015, where the markets saw a small 5% decline in sales. By the end of 2016, there were 30 different EV models available to consumers.

The total number of EV sales was 159,139, and of those vehicles, at least five of them sold 10,000 units or more in 2016: the Tesla Models S and X, the Chevrolet Bolt, the Nissan Leaf, and the Ford Fusion Energi. A large portion of these sales (more than half) took place in California. This was largely due to state’s zero-emission vehicle mandate requiring a certain percentage of car sales to be zero-emission vehicles.

The Chevy Bolt is just one of five models that sold at least 10,000 units in 2016 in the United States.

Well, it appears that Europe has seen the bet and raised us. On July 6 of this year, France announced the end of petrol and diesel vehicle sales by 2040. This came one day after Volvo announced that it would only be producing electric or hybrid cars starting in 2019. Most recently, the United Kingdom announced on July 25 that it would follow in France’s footsteps—also banning the selling of petrol and diesel vehicles by 2040.

These efforts are driven by the countries’ push to meet the Paris Climate Accords. For the U.K., there is a secondary motivation to lower air pollution. A February report from the Royal College of Physicians attributed 40,000 deaths a year in the U.K. to outdoor pollution, most of which comes from vehicles.

Nor are France and the U.K. the only countries to push for EV sales exclusively. Here are the others looking to join them:

  • Norway had planned to join the EV-only policy by 2025. 24% of vehicles currently sold in the country are already electrically powered.
  • India is looking to not only sell exclusively electric vehicles, but also to swap all current internal combustion vehicles by 2030.
  • The Netherlands currently has a high EV sales rate, at around 6% of its total new vehicles, and is looking to be solely EV by 2025.
  • Germany is also considering a push to end of sales of gas and diesel cars by 2030. There is strong opposition to this, owing to the country’s strong vehicle industry, but in light of Dieselgate it may be in the country’s best interest to turn toward more EV sales.
  • China has been pushing its automakers to expand their production of electric vehicles—Daimler and its Chinese partner announced a $735 million investment to boost EV output this July. China is also pushing consumers to buy electric by implementing strict limits on the number of new vehicles that can be registered in major cities such as Beijing and Shanghai (though providing exceptions to EV-qualified models).

The rise of electric vehicles is undeniable, as more and more models have been sold over the last six years.

And where is the United States in this picture? Recently our efforts have been focused on the deregulation of efficiency standards. The current administration’s Transportation Department announced on July 25 that it is looking to revise auto fuel efficiency requirements starting with the 2021 model year, and could potentially adopt lower standards through 2025. The previous plan was to raise efficiency standards every year from 2021 to 2025. The current goal was set in 2011 and was aimed at doubling the average of fleet-wide fuel efficiency to 50 miles per gallon per 2025. The potential savings to drivers would be $1.7 trillion. Freezing the regulation in 2021 would cap the efficiency to 41 miles per gallon and benefit the auto industry in design engineering costs.

Essentially, while the rest of world is making strides in electric vehicles and pushing new standards, the U.S. is still trying to make exceptions for gas cars. The potential harm to the car engineering industry is that we will no longer be at the forefront of car technology. The electric car industry is set to become a $731 billion market by 2027, according to IDTechEx. The autonomous vehicle industry is also set to become a $127 billion industry by 2027, according to a recent market report from Research and Markets. The engineering design and investment efforts will be geared toward innovations, especially in the world of electronics. U.S. car manufacturers would benefit greatly by getting on board with electric cars before the European market leaves the rest of the world in the dust.

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