In this week’s Energynews article, aelēc´s regulatory director, Pedro González, analyzes the measures he considers necessary to boost the use of the electric vehicle, but also the barriers currently limiting sales in this segment: price, range and insufficient recharging infrastructure. But González seeks answers and finds solutions within the framework of committed administrations and the car manufacturers firm bet for this technology.
At the end of December, the Ministry of Industry, Commerce and Tourism published the Prior Public Consultation on aids for the purchase of alternative energy vehicles, better known as the MOVEA 2019 Plan. The technological development and the different plans fostered from the public administrations are raising a high interest in media and, by extension, public opinion. So we are at the right moment to reflect on where we are and thus re-evaluate the type of measures that are necessary for the promotion of the electric vehicle.
From aelēc we consider that the electrification of transport is the most efficient solution to decarbonize transport and improve air quality in cities. The electrification of transport will contribute to the goal of reducing CO2 emissions in the diffuse sectors, which in Spain should reach 26% in 2030 (compared to 2005 emissions) while also reduce pollution in cities. Therefore, the commitment to the electric vehicle is a cornerstone in the challenges we have set for the future as a society.
Based on this premise, the actions that should allow the progressive increase of the electric vehicle fleet in our country have yet to overcome the barriers that limit sales and that I summarize in three points:
- The price of the electric vehicle compared to the conventional vehicle is higher for the same level of benefits. This undoubtedly slows down sales.
- The range of these vehicles is still limited. This generates a rational fear for its use.
- There is no basic network of recharging points infrastructure at the national level that, would otherwise help override this fear for the widespread use of the vehicle.
To the extent that these three barriers are removed, we will be able to see several million electric vehicles on our roads in 2030, as planned.
This in turn makes particularly relevant the role of the administration when designing decarbonization policies that seek the achievement of specific objectives for the coming years. Instruments such as the MOVEA Plan are appropriate to move forward, especially at a time when the electric vehicle is going through that phase, inherent to all technologies, between the times they are technically viable until they become commercially viable.
It is a reality since in 2020 there will be more than 100 electric models – between pure and plug-in electric vehicles – available in the market. A fact that shows us the indisputable bet of the car manufacturers for this technology. As is also true that in a similar period the cost of the electric vehicle will be compared to that of the conventional vehicle throughout the life of the vehicle, thanks in part to lower fuel and maintenance costs.
Aids to overcome the price barrier
Other measures that will contribute to removing existing barriers – economic, technological and infrastructure – and will allow taking steps to accelerate this process, are aids for the acquisition of vehicles. Currently, as I have pointed out, electric vehicles are still more expensive and do not meet the features to be the first option for all the potential users. Therefore, one way to reduce this difference is through these aids.
The cost of current vehicles will decrease as economies of scale consolidate, but in the meantime, favorable transitory taxation – and other direct aids on the purchase of vehicles – would have a very positive influence. During this “learning curve” period, tax allowances and / or direct aids on the purchase of vehicles could be established, and unlike the current ones these should have a continuity essence. Therefore, it would be interesting to evaluate the possibility of applying measures such as reducing the VAT to 10%, exemptions to the registration tax and the circulation tax, be it total or partial, direct aid and financing on the purchase of new electric vehicles, linking these to the scrapping of old polluting vehicles, etc.
The experience in other countries, such as the Netherlands or Norway, shows that the taxation applied to the vehicles themselves has a very significant impact on the technological choice. These experiences have been very welcome and have impacted final registration figures.
A still limited range
As for range, establishing aids that encourage R + D + i efforts could also be considered. Range is a technological problem, and as such it can only be overcome when the appropriate efforts are applied so that they bear fruit. But, in addition, it is an industrial bet of the future and its development can represent clear opportunities for the generation of wealth and employment. In this sense, days like the one promoted by the Ministry of Industry, Trade and Tourism through the “Alliance for batteries” that seek to present in Spain the advances within the framework of the European Battery Alliance (EBA), launched by the European Commission in October 2017, as well as the industrial opportunities stemming from it, encourage the search for innovative solutions in this field.
Insufficient recharging infrastructure
Finally, actions should also be directed to the installation of recharging infrastructure that encourages the effective takeoff of the market. It is necessary to establish a planning and objectives of electric vehicle recharging infrastructure that includes a program of aid for its implementation and, thus, eliminate this psychological barrier that limits the use of electric vehicles to short distances and in cities.
As is noted in the Plan Movalt Infrastructures 2018, the electrification of transport needs a specific recharging infrastructure for public use to cover the mobility needs of users, and thus allow the development of the market.
To ensure a deployment of sufficient and efficient recharge infrastructures, it is necessary to urgently develop a recharging infrastructure deployment plan at a national level that provides the user of the electric vehicle with sufficient coverage, guaranteeing a basic network of recharging points throughout the national territory.
This plan could include targets for the main road network, such as the number of recharging points per km (for example, every 70 km), and for the built up areas according to the number of inhabitants. Whether these or others, the important thing is to have targets as soon as possible.
A safe bet
Therefore, the debate on the measures that can be adopted to boost the electric vehicle in our country is in full development stage. The adoption of a policy aimed at a deployment that equates us with the countries of our environment is an essential tool. With all this, the positive effects should compensate for the aids that are set: improvement of the air quality in the cities, compliance with the targets of greenhouse gas emissions reduction, industrial impetus and, from the electrical side, the electrification of the Transportation leads to an increase in electricity demand, so that a greater inflow of renewables will be given momentum, thereby accelerating the decarbonization of the economy. In short, we believe it is worth the bet.