Ready, set…wait

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Governmental initiatives to put more electric vehicles on the road is well-intentioned but economically, technologically and socially premature

The Federal government recently announced it had established a Federal Advisory Committee to assist it in establishing a Zero Emission Vehicle strategy for 2018 with the aim of increasing the number of zero emission vehicles on the road.

Personally, I am a fan of alternative propulsion to the internal combustion engine (ICE).   

That said, being a fan of zero emission vehicles and having them be appropriate for my lifestyle at this point on the technological development
curve, are two different things.

For my family and I, a pure battery electric vehicle would makes sense only as a second car.    

The battery range — at least of the vehicles I could afford — and the lack of charging infrastructure are two things that make a battery electric vehicle (BEV) an unrealistic option at this point.    

A plug-in hybrid electric vehicle (PHEV) would be a more viable option as the smaller ICE would be available to supplement the battery once it had been drained.   

The compromise between having to scout for elusive charging stations and then wait an inordinate amount of time while my battery re-charges, would therefore be simply plugging in my vehicle once I returned home.   

However, a PHEV isn’t really a zero-emission vehicle then, is it?   It has a better emissions profile than an ICE vehicle, or even a conventional hybrid vehicle — one that does not plug in — but it still produces emissions.

Hydrogen is a zero-emission vehicle technology that is often overlooked. 

Fuel cell electric vehicles (FCEV) are, as the name suggests, electric vehicles as well; they simply use hydrogen as a fuel that stores energy, which is then converted to electricity in a fuel cell.    

The only emission from a FCEV is water. However, despite the fact that there are at least eight OEMs with fuel cell vehicles launched, or to be launched by the early 2020s, there is essentially no hydrogen fuelling infrastructure in Canada.   

While policy commitments by both the federal and Quebec governments should establish an initial infrastructure, it will take some time to install a critical mass of infrastructure to make hydrogen vehicles a viable option for consumers — especially given their current price point, despite government rebates.    

One of the key advantages of FCEVs however, is the fact that they are essentially a “no compromise” option.    

You can fuel the FCEV’s hydrogen tank in about the same time as it takes you to fill your ICE vehicle today with gasoline. Moreover, the range for a tank of hydrogen is equivalent to that of an ICE vehicle.

The public policy discourse that has taken place with respect to zero emission vehicles over the last couple of years has tended to leave stakeholders in two camps with respect to how to increase the number of zero emission vehicles — defined to include PHEVs, even though, as noted above, they are not zero emission vehicles.   

The first camp is comprised of automakers and some academics that suggest that if consumers demand zero emission vehicles then the industry will respond, as it normally does, to that demand.   

To date though, demand has been muted by a number of factors: high prices for zero emission vehicles — even with government rebates; limited battery range — although this is getting better; and virtually non-existent infrastructure.   

Therefore, if policy makers want more zero emission vehicles on the road then it follows that they should play a leadership role in ensuring that the price gap is addressed via incentives, and that the infrastructure is built out to provide consumers with the confidence that they will be able to find a charging/fueling station when they need it.   

Automakers are responsible for increasing the range of the vehicle — we have seen this evolve over the last year or two as the second generation of electric vehicles has come to the market.

The second camp tends to be comprised of environmental non-government organizations (ENGOs), some academics and some government officials who suggest that supply is really the issue and that if more zero emission vehicles and a wider variety of zero emission vehicles were available, consumers would be snapping them up as soon as they landed on dealers’ lots.   

The implication is that automakers and auto dealers have no real interest in selling zero emission vehicles and are out of touch, myopic and greedy in clinging to the “old” ICE auto industry.    

In my opinion, however, this view does not at all represent the automotive industry I have worked in for 30 years.    

The automotive industry has always been on the cutting edge of technology.

To see the safety, environmental, connected and automated innovations that have been introduced to the automobile since I first entered the industry, is truly amazing.   

And what the industry has always responded to is what the consumer wants.    

Consumers indicated that they wanted minivans and the industry made minivans.    Consumers interests turned to crossovers and the industry moved to crossovers.   

More recently consumer demand has moved to compact and sub-compact SUVs, so the industry has produced more compact and sub-compact SUVs — not zero emission vehicles.

Despite the beliefs of some, the companies that comprise the global automotive industry are not run by luddites. They have children and grandchildren like the rest of us, along with shareholders.    

The pathway ahead for the industry from an environmental perspective is relatively clear — vehicles must decarbonize; we are in absolute agreement with policy makers and environmentalists on that question.   

The outstanding issue is how quickly can we do that and by what measures?   

If the industry can’t sell zero emission vehicles in an environment where some provinces are providing up to $14,000 in incentives to purchase zero emission vehicles, does anyone think that requiring the industry to make available a certain percentage of vehicles for sale (Read: Quebec) will change this dynamic?    

I do believe that there is an approaching tipping point with respect to zero emission vehicles, but I suspect that it is further out than most environmentalists believe and perhaps nearer than some in the automotive industry believe.     

I was recently reading a piece on what spurred the spread of an innovative product — almost regardless of what the product was. There were five key qualities — relative advantage was the first,
i.e. the innovative product was regarded as being “better” than the product it was replacing, by some metric. The greater the relative advantage the higher the adoption.   

The second quality was compatibility with existing values and practices, i.e. how similar was it to the product the person was already using. The greater the compatibility the higher the adoption.   

The third quality was simplicity and ease of use.  Clearly the easier it is to use, the higher the adoption .   

The fourth quality was trialability, or the ability to test and use the product for an extended period of time — the conclusion being the longer the trial period, the higher the adoption, as it decreases the perceived risks associated with the innovative product. 

The final quality was observable results, which is based on the view that the more you see of an innovation, the more likely you are to adopt it. 

If you take supply and demand out of the equation and look at what’s needed to increase the adoption of the zero emission vehicle innovation, there are some real clues for both automakers and dealers in the five noted qualities.   

That said, getting to the zero emission vehicle targets — either aspirational or mandated by various governments in Canada, still appears to be a situation of “ready… set… wait.”   

Wait for consumers to better understand the benefits of zero emission vehicles; wait for battery producers to increase both the energy density and range of batteries; wait for governments to build the charging and fuelling infrastructure to provide consumers with the certainty they will be able to refuel/recharge their vehicle when they need to.

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