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Plugging in to a new era of electric cars

Terry smiling headUK Environment Secretary Michael Gove is no stranger to controversy, but none of his statements as a government minister will be so profound, and maybe not so controversial, as his plan to ban the sale of petrol and diesel cars by 2040.

Mr Gove warned that Britain simply cannot continue with the internal combustion engine because of the damage it is doing to people’s health and the planet.

Although a number of manufacturers are making big strides towards converting their operations to electric vehicles, the planned switchover has been met with a mix of scepticism and incredulity.

Motoring journalist Quentin Willson described the plan as “ill thought out” while Aston Martin chief executive Andy Palmer said it was an “absurd” move. If the government is going to force through legislation to outlaw petrols and diesels it needs to offer more assistance to carmakers in battery technology, he said.

Whether wise or not, the Government has been forced to come up with tougher measures to target diesel drivers after losing a case against environmental campaigners ClientEarth over breaches of EU emissions standards. It will follow France which has also committed to an all-electric car policy.

The Scottish Government claimed it was already ahead of the game and could bring in the ban 10 years earlier. In 2013, it announced a key ambition that “by 2040 almost all new car sales will be near zero emission at the tailpipe and that by 2030 half of all fossil-fuelled vehicles will be phased-out of urban environments across Scotland.”

However,  the implications of the switch have steadily begun to sink in. Should the transition come to pass it will certainly transform more than the car building industry. 

Demand for precious metals, such as cobalt and lithium, will increase while the oil industry has been remarkably acquiescent. A major user of its output will be removed, but it has been making plans for this expected move for some time. When Ben Van Beurden, the chief executive of Shell, says his next car will be the electric Mercedes-Benz S500e then it indicates how the oil majors are thinking. Chief Financial Officer Jessica Uhl already drives a BMW i3 electric car.

Shell will unveil early plans for a deeper presence in renewable energy and the electrical chain to tap into demand for electric vehicles.

Just 4% of current new car sales are for electric vehicles and Which? magazine said they are currently too expensive for most consumers. A survey by insurer Aviva showed only 2% of drivers planned to buy an electric car as their next vehicle.

However, the pace is quickening. The number of new registrations of plug-in cars has grown from 3,500 in 2013 to more than 100,000 at the end of May. Morgan Stanley analysts expect global car sales to rise by 50% by 2050 to more than 130 million units a year, and estimates that electric vehicles will account for at least 47% of that sum.

Electric charging stations will become the norm

All of Volvo’s cars will be electric or hybrid vehicles by 2019. BMW is to build an electric mini at its Oxford plant. Volkswagen, which is eager to distance itself from the diesel emissions scandal, plans at least 10 electrified models by the end of next year and is aiming at 30 battery-powered models by 2025. It wants to sell 1m electric cars sales by 2025.

Treasury officials, mindful of the enormous tax revenues from the oil industry, are calculating where the replacement income will come from.

The extra electricity needed to support the expected rise in electric vehicles will be the equivalent of almost 10 times the total power output of the new Hinckley Point nuclear power station.

It would likely require Britain to become a net electricity importer unless there is investment in new generation.

Petrol stations would disappear or be turned over to electric charging stations. A new generation of neighbourhood, or even household charging may become the norm. There are already 11,500 charging points in Britain and £500 grants are available for people installing charging ports at home.

There is talk of installing charging points every 20 miles on motorways, though this will alarm those who see it as indicative of the slow pace of technological change and a potential frustration for drivers if they are required to re-charge so frequently.

For the energy sector, the change is likely to be as fundamental and challenging as the switch to renewables. It offers industry and academics enormous opportunities to develop battery technology and new sources of power generation.

The government says it will invest more than £800m in driverless and clean technology, and a further £246m in battery technology research.

The Global lithium-ion battery market was said to be worth $30 billion in 2015 and is expected to rise to more than $75bn by 2024.




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