On the 26th June, PubAffairs Bruxelles hosted a debate on the way forward for cleaner road transport with Mr Gregory Plantet, Chief Financial Officer, Sodetrel, Mr Christian Egenhofer, Director of Energy Climate House, Centre for European Policy Studies (CEPS), Ms Marie France Van Der Valk, Director of European Affairs and Representation to the European Institutions Alliance, Renault-Nissan and Mr Axel Volkery, Clean Transport Policy Coordinator, European Commission. The debate was moderated by Hughes Belin, freelance journalist.
The panel debate followed an afternoon of presentations and discussions with several different stakeholders who debated the question of electric vehicles (EVs) in Europe with reference to the UNIT-e project, whose objective was to foster the use of electric cars across Europe. The schedule and participants of the afternoon’s discussions are available here.
Mr. Belin introduced the speakers and asked them about the afternoon’s event with special regard to e-mobility and the different models for the development of electric cars.
Mr Plantet started his statement by highlighting the success of the afternoon’s debates thanks to the variety of actors who were able to intervene. He explained that Sodetrel and Électricité de France (EDF) aimed at putting all stakeholders around the table to discuss how to facilitate the adoption of electric vehicles by simplifying cross-borders journeys using electric cars. In order to achieve this aim, the project participants promoted interoperability across Europe. Although it resulted in a complicated task, the speaker argued that it was a success as the project enabled the kick-starting of pan-European reflexion. Eventually, the speaker concluded, Sodetrel found a way for the project to be successfully implemented and for cross-borders journeys of using electric cars to be simplified.
Mr Egenhofer responded that, according to recent publications and research, electric vehicles will become more competitive and cheaper by around 2025. He also mentioned a recent publication, which showed how EVs can soon utilise fast lanes and take a bigger market share. However, current data indicates that EV adoption in Europe is still lagging behind in comparison with other markets. Even current figures were doubled, electric vehicles would still be far from being fully deployed in less developed regions in Europe. Furthermore, as e-mobility is gaining popularity, especially in some urban areas, Mr Egenhofer noted that strategy and assumptions in this domain should follow suit. The speaker concluded by stating that it would also be interesting to consider the question of Heavy Goods Vehicles (HGVs), as they could also be linked to e-mobility.
Ms Van Der Valk explained that nine years ago, following several studies, Renault and the Alliance – a consortium of Renault and Nissan – publicly launched “Zoé & Leaf” the first electric cars with an urban focus. Indeed, several studies highlighted that 80% of the population travelled less than 65km a day by car, especially in urban areas. However, in spite of a growing range of available models, consumers have not been sufficiently convinced by EVs, suggesting room for improvement in this area. Mr Van Der Valk also stated that there is also a need to understand the kind of mobility customers’ desire, as there is further space for innovating and testing new technologies.
It was also mentioned that the uptake of EVs is a real challenge . Europe’s ambition is key as there remains a great need for EV infrastructure and public support. Another important point that Ms Van Der Valk highlighted was that one of the first objectives of the Alliance is to create an affordable model for the general public, while encouraging the further development of innovative features.
Mr Belin, turning to Mr Volkery, asked him how the Commission is implementing the directive adopted on alternative fuels, which notably urges EU Member States to formulate national policy frameworks for alternative fuels.
Mr Volkery replied that Member States have transposed and are in the process of implementing the Directive. The Commission has already received national policy frameworks from all Member States. Yet, on average, the level of ambition demonstrated was lower than expected. However, Mr Volkery highlighted that the contemporary policy environment is now very different from when the legislation was first discussed and adopted in 2014. Mr Volkery underlined that the Directive has triggered a discussion on how to introduce, start and accelerate the use of alternative fuels and infrastructure in Member States, as well as the development of these areas of the Single Market. Efforts now need to be made for the uptake of electric vehicles and infrastructure to spread beyond frontrunning Member States. Mr Volkery also added that implementation of the Directive was closely discussed with every Member State with a view of evaluating the questions already discussed by the other panellists. The availability and affordability of electronic vehicles still pose a barrier to their adoption, as well as lack of infrastructure in many regions of the EU. He consequently explained that there is a greater need for investment in some areas than others. Mr Volkery noted that there is no principal lack of infrastructure at current when compared to that in place for combustion-powered vehicles, though regional gaps persist. However, when comparing the expected up-take of EVs after 2020 and planning by Member States for alternative fuels infrastructure, gaps do become apparent. The problem cannot be reduced to either vehicles or infrastructure, but one priority is to offer a broader range of vehicles at lower cost; including services facilitating seamless mobility using alternative fuels. In this sense, Mr Volkery believes that much progress has already been made, but added that further efforts are needed.
Mr Belin underlined that initially Commission initiatives suffered from a lack of ambition, envisaging only two-digit growth, and asked Ms Van Der Valk what she regards the current outlook is for the market .
Ms Van Der Valk responded that she agreed with the Commission, and that the directive on alternative fuels was an excellent beginning, which gave the right imprinting for new policies. However, she stressed that there was a lack of political initiatives at the local level, which would make the implementation of the Commission’s work easier with regard to electric vehicles and e-mobility in the long term.
The moderator asked Mr Egenhofer which prospects he foresaw for 2030-2050 in terms of climate and energy. Mr. Egenhofer believes that transport will remain the weakest area of implementation for such policies, referring to the example of the so-called “diesel scandal”.
Mr Egenhofer remarked that he was not persuaded that the solution was to encourage a paradigm shift, although he drew upon two events raising public awareness concerning these questions. Firstly, the “diesel scandal” was very important and made the industry, as well as policymakers reflect upon the approaches they had taken to date. Secondly, the so-called “Tesla Shock” made the European car industry understand that they had a real competitor: a fact that changed the debate in Europe among carmakers and institutions alike. Mr Egenhofer continued by stating that another challenge, which has also been identified by energy agencies, is knowing which companies will begin mass producing electric vehicles, how and when this process will commence . At the moment, there is no capacity to achieve this and no economic incentive for these cars to be brought to the mass market any time soon, stated Mr Egenhofer. To conclude, he explained that European governments were unlikely to repeat what they had done with renewables, namely invest very early on and offer an impetus to the market as, as at present, they tend to be less generous regarding the provision of funding .
Elaborating on the issue of market share, Mr Belin asked Mr Plantet how profitability would be maintained if the mass production of electric vehicles is not introduced in the near future.
Mr Plantet explained that Sodetrel had been investing in 200 quick charging points on French motorways and that they were the first to do so. According to the speaker, it was a sensible investment as, at present, this network remains unprofitable and would need from ten to fifteen years to become cost-effective. Mr Plantet also stated that the process of replacing internal-combustion-powered vehicles is in its early days, and that EU financial support is fundamental to further enhance the development of such initiatives. Mr Plantet also highlighted that even if, as previously stated, the prevalence of electric charging points was initially low, their presence has multiplied fourfold between January and December 2017. He added that Sodetrel was satisfied with the Commission’s focus on urban areas.
Mr Belin asked Mr Volkery what the Commission’s thoughts were on the adoption of EVs – originally developed for urban transport – for long journeys (involving motorway travel).
Mr Volkery first responded to the remarks of his fellow panellists, remarking that statements on investments by Original Equipment Manufacturers (OEMs) should be taken seriously. However, action should really be accelerated. He also noted that OEMs need to act because of developments in China, which has proven highly active in the field of EV policy. Indeed, this fact should incentivise greater efforts and investment by Europe. According to Mr Volkery, the question for Europe is not if it should embrace EVs, but how to embrace EVs, as well as other forms of alternatively powered mobility and short- and long-distance travel using EVs. He also expressed his optimism that OEMs in Europe will continue to promote innovation, including in the area of heavy goods transportation. With regard to bus travel, Mr Volkery noted the ambition signalled within the proposed Multiannual Financial Framework (MFF). It is also the intention to offer targeted support to the market, according to the different stages of maturity of its actors, and to support both the electric car market and the development of recharging and refuelling stations. The Commission will naturally continue to support the development of all alternative fuels, it was added.
Another topic of discussion was whether Europe should invest more in Asia than domestically.
Ms Van Der Valk responded that Renault and Nissan had just announced a billion euros of investment in the charging capacity to make it a pillar of all the production of EVs in Europe. She stressed that China is obviously important, and that Renault and Nissan are present on this market, but she further explained that the e-mobility strategy for Europe was essential as the Alliance is confident that Europe is ready for a new type of mobility. The speaker also stressed the fact that Renault and Nissan are working on new markets, businesses, batteries’ life, and a “second life for the batteries”.
Mr Egenhofer was happy that renewables, which are strongly supported by European policymakers, were mentioned. He underlined that the issue of China is interesting, but needs some clarification as the country has a highly distorted market. Mr Egenhofer explained that he did not think that it was particularly interesting to look at China’s market as a model to emulate because its particular features might not be suitable for adoption by the EU. Consequently, he turned to Mr Volkery to ask if EU Member States could show more engagement with such technology and if the Commission will pay more attention to infrastructure proposals.
Mr Volkery first responded to the question regarding China by suggesting that over the past five years, the growth of Chinese car manufacturers had been remarkable, but that adoption rates in the US market are also gaining ground. There is increased global competition, both in the east and in the west, and European car manufacturers should prepare accordingly. However, the EU needs to develop its own market and leadership concerning new technologies.
Mr Belin turned to Mr Plantet and Ms Van Der Valk to ask their opinions about e-mobility business models and services.
Mr Plantet reacted that, from an operator’s point of view, even if you have different business models, in terms of charging, investment will always go towards the optimisation of operating costs and the development of services for customers. He said that he believed that there is a large market for the deployment of charging stations in Business-to-Business (B2B) sectors and publicly in cities. The speaker highlighted, however, that the cost of fast chargers on motorways reaches almost 60 thousands euros per 15kW charger and it would, therefore, be highly costly to develop them in cities. Moreover, Mr Plantet explained that there were, as of yet, no induction chargers as this new technology still needs testing.
Ms Van Der Valk answered that Tesla changed the game because it made customers more interested in EVs as premium cars. She added that a lot of developments have been realized in the past 3 years: for example, EV batteries produced by the Alliance have doubled their running time. Today, Ms Van Der Valk explained, the challenge is to show the consumer that e-mobility is an attractive option.
Mr Belin then asked the panellists what, in their opinion, are the barriers to the successful development of EVs.
Mr Volkery answered that, thus far, the consumers did not have enough options when purchasing a vehicle to be convinced to buy electric. In addition, there is no easy-to-use framework for utilising and paying at charging stations for vehicles powered by alternative fuels. According to him, there is a need to create consumer trust in this new form of mobility as the cost of combustion-powered cars is increasing; as well as being a need for interoperable and seamless services. Mr Volkery underscored that the Commission was attempting to create a suitable core recharging infrastructure through the Trans-European Transport Networks (TEN-T) programme by 2025, which would allow citizens to travel across the continent more easily with vehicles powered by alternative fuels . He also expressed his conviction that consumer perceptions require change. Mr Volkery then turned to Mr Plantet to ask him about the business model according to which urban fast-charging is most cost-effective.
Mr Plantet explained that, in the short run, urban areas are used much more than motorways, for several reasons ranging from restricted autonomy due to the battery life of EVs which makes people hesitant to travel long distances, to cultural reasons. According to some recent studies, customers who use EVs mostly stay in their region and electric cars are rarely used for cross-border journeys . The most profitable charging stations, therefore, remain in cities, where demand is higher, especially as more and more public transport is going electric.
Mr Egenhofer took the floor to ask the other panellists what they thought the prospects and scale for the use of electric devices is. According to him, it would be highly interesting, for example, to electrify city bus networks .
Mr Plantet explained that for buses, it was a specific B2B matter to be developed privately because several issues remain, such as the charging of multiple buses simultaneously or the fact that all buses need to charge at the depot. In addition, Mr Plantet highlighted that chargers must be deployed in specific sites where they are not today. He added that the issue of parking and land usage may also be problematic.
According to Mr Volkery, uptake of low- and zero-emission buses for use in public transport is now accelerating, but there has also been reluctance to date because public transport operators have a service obligation to the public. There is a need for continued support in the form of public investment with Mr Volkery expressing his confidence that EVs in public transport will develop over time and become much more established over the coming years.
To conclude on the question of barriers to adoption, Ms Van Der Valk said that the first change necessary is enhanced coherence. She stressed that a gap exists between the “decarbonisation” policy that was defended officially by Member States under the guidance of the Commission and the actual actions being taken. According to Ms Van Der Valk, the question extends beyond Europe, and needs to be addressed accordingly. Ms Van Der Valk also added that one strategy could be to convince households who have two cars, usually one for long trips and one for local travel, to reconsider the way they travel in cities. The speaker concluded by reiterating that it is necessary to attract new customers and to convince them that they can trust EVs, as well as persuading customers that an EV experience is different, smarter, greener and easier.
The Q&A session covered the following issues: the cost of 50kW charging points, the need for faster urban chargers , future developments regarding charging stations; the location of charging stations; and the future of clean e-mobility.
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