Even as U.S. Lags in Electric Car Adoption, China, Europe Drive Shift Towards it

While not being limited to North America only, many in the auto industry believe that electric cars will pick up critical momentum in 2017.

Industry executives gathered in Detroit this past week for the city’s annual auto show said that fuelling an investment surge is tighter emissions rules in China and Europe leave global carmakers and some consumers with little choice but to embrace plug-in vehicles.

“Car electrification is an irreversible trend,” said Jacques Aschenbroich, chief executive of auto supplier Valeo, which has expanded sales by 50 percent in five years with a focus on electric, hybrid, connected and self-driving cars.

While combustion engines face mounting penalties including driving and parking restrictions in Europe, green cars benefit increasingly from subsidies, tax breaks and other perks.

Plug-in vehicles are being aggressively pushed by China which is struggling with catastrophic pollution levels in major cities. Its regulations designed to discourage driving fossil-fueled cars in big cities and its carrot-and-stick approach combines tens of billions in investment and research funding with subsidies.

However more hairpin curves await the path ahead for electric vehicles (EVs) in the United States.

pushing ahead with state-level rules mandating rising quotas for electric, or “zero emission” vehicles are regulators in California and a group of other U.S. states.

But as cheap fuel drove demand for gas-guzzling sport utility vehicles and pickup trucks, the market share of electric-only vehicles declined further to 0.37 percent in 2016 and plug-in registrations in the United States fell in 2015.

Environmental and climate rules have been pledged to be ruled back by President-elect Donald Trump. Even before the outgoing administration formally signed them into effect on Friday, Trump was asked to review Obama administration fuel economy targets out to 2025 by groups representing established automakers.

A move that could spark legal challenges to electric car quotas in California and other states on grounds they present a separate standard, working toward a single, national set of rules to govern automotive greenhouse gas emissions has also been asked of Trump by automakers.

Still, since China and Europe are forging ahead with policies to expand sales of plug-in cars, the pressure to bring electric vehicles to market would not be relieved by hitting the brakes on them in the United States, industry executives in Detroit said.

Earlier this month, for example,  Chief Executive of Ford, Mark Fields, said that is why the company is moving forward with previously announced plans to invest $4.5 billion for plug-in vehicles by 2020.

“The industry is changing, the infrastructure’s starting to build, and that’s why our view is (that) within the next 15 years we’ll see more electrified offerings … than we’ll see gasoline-powered,” Fields said as he unveiled a $700 million plan to build a battery SUV and other plug-in vehicles in Flat Rock, Michigan.

They needed more help from governments to drive the shift to electric, industry executives said.

Automakers are advocating new infrastructure money go to public electric car charging networks in China, Europe and the United States.

For consumers who buy a fully electric car, a $7,500 federal tax subsidy is being pushed for by EV manufacturers in the United States. It would take time as Congress would have to act even if Trump were to try to eliminate it.

“There is not a disagreement that the world is going electric,” California Air Resources Board Chair Mary Nichols said on the sidelines of the auto show, noting that all vehicle makers were now investing in electric models across their entire product lines. The debate, she said, was “over timing, not the goal.”

“Look to China rather than the U.S. for the future of electric cars,” Gerard Detourbet, a Renault-Nissan executive leading low-cost plug-in development, said recently. “China is compelled to act – that’s the main difference.”

(Adapted from Reuters)


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