Conclusion
With record-high new electric car registrations in 2016 (over 750 thousand sales worldwide), the transition to electric road transport technologies that began only a decade ago is gaining momentum and holds promise for a low-emission future, provided that such dynamism can be sustained over the coming decades. As the global stock of electric cars surpasses 2 million units, a number of countries are coming forward as global leaders. Norway had the highest electric car market share globally (29%) in 2016. China experienced an extremely rapid market growth, from 100 thousand units in circulation in 2014 to 650 thousand units two years later. The provision of private and publicly accessible charging infrastructure has accompanied the growth of the electric car stock. In 2016, the number of publicly accessible charging points reached 320 000 units globally, representing a 72% growth since 2015. These successes are driven by the multiple benefits EVs can bring to governments and citizens: energy security (thanks to the energy efficient nature of electric mobility and reduced dependence to oil), urban air quality, noise mitigation and greenhouse gas reductions.
Governments and local authorities are implementing policies aimed at reaping the benefits of EVs. The tools currently available for policy makers include, among others, purchase subsidies, measures supporting EVSE deployment, fuel economy standards, ZEV mandates and access restrictions. RD&D and mass production are also delivering rapid cost declines and increases in energy density. Signs of continuing improvements in technologies currently being researched confirm that these trends will continue and that they will further improve performance and narrow the cost competitiveness gap between electric and ICE vehicles.
In the next 10 to 20 years the electric car market will likely transition from early deployment to mass market adoption. Assessments of country targets, OEM announcements and scenarios on electric car deployment seem to confirm these positive signals; indicating that the electric car stock may range between 9 million and 20 million by 2020 and between 40 million and 70 million by 2025.
As the number of EVs increases, charging could have a sizeable impact on the capacity required by the grid at certain times and locations, with consequences for the adequacy and quality of the power supply, risks of cost increases for consumers and the potential for negative feedback on transport electrification prospects. EVSE deployment needs to be conceived in a way that manages these risks while taking advantage of the options available for mitigating these impacts. The potential contribution of EVs to the decarbonisation of the global economy, among a variety of other benefits, is substantial. EVs are well suited to promote synergies with variable renewables. If charging practices strengthen demand-side management opportunities, EVs could allow a greater integration of these energy sources in the power generation mix. Large-scale electric car charging and demand response will require the joint optimisation of the timing and duration of recharging events, the modulation of power delivered by charging outlets (defining the speed of charge) and may involve a reliance on vehicle-to-grid solutions. For fast chargers, managing power demand is also likely to require the deployment and use of stationary storage at the local or grid level.
Moving beyond early market developments for electric cars will require policy adjustments. As battery pack costs decrease, electric vehicles will become increasingly cost competitive. The need for vehicle purchase incentives will diminish, and subsidies for electric cars will not be economically sustainable with large sales volumes. As the share of electric vehicles sold increases, revenues collected from conventional fuel taxes will also shrink. The decline will be largest in the countries with the highest fuel taxes, such as the European Union and Japan. Ensuring that infrastructure funded by these revenues (e.g. public transport infrastructure, road
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networks, and alternative fuel and low-carbon infrastructures) continues to be developed will require a transition in the way these revenues are collected. Applying taxes based on vehicle distance travelled rather than fuel consumed is likely to be the most suitable alternative (IEA, 2017b). Growing EV sales will also stimulate the demand for commodities needed for battery manufacturing, such as lithium, cobalt and other materials required by future battery technologies. This will require understanding the distribution and accessibility of these resources, and, as in the case of other strategic commodities, may come with risks. Monitoring the price and availability of these resources, but also minimising the environmental impacts of their extraction and processing, will be necessary to put the EV market on an economically and environmentally sustainable trajectory. Battery reuse and material recycling will become increasingly important in this context. Policies will need to steer the use of batteries in secondary applications (such as stationary energy storage), and their end-of-life treatment. Policies will also be needed to deal with issues relating to battery ownership, transport and recycling requirements.