rethink sustainability
How COVID-19 is delivering a reimagined automobile to reduce carbon emissions
The numbers are striking - as a result of COVID-19 travel restrictions, road transport carbon emissions may fall by as much as 14% in 20201. The accompanying drop in pollution — Central London registered an impressive 58% reduction2 in atmospheric emissions since March 23 — gives a glimpse of what a less carbon-reliant world could look like.
Such reductions are not just 'nice-to-have', they have become increasingly important to reach the targets set out in the Paris Accord. Greenhouse gases must fall at an annual rate of 7.6% by 20303 and those related to automobiles - and transport in general - must be halved by 2050.
COVID-19 didn't just reboot the carbon discussion, it has delivered a chance for further climate gains to piggyback on the sharp drops in emissions. But the question of how to achieve these reductions without straitjacketing the world economy is a challenging one.
Focusing on a Circular, Lean, Inclusive and Clean (CLIC™) transport system affords a solution. Efforts to reengineer the automobile focus on producing longer-lasting and green batteries and more efficient, cheaper electric vehicles. Pressing smaller alternate vehicles such as mopeds and bikes into service for shorter trips also allows us to reimagine the role of the car in a more sustainable future.
The on-ramp to green vehicles
Tesla's work beyond the electric car towards clean energy generation and storage is aimed at developing a greener infrastructure on which to ply the vehicles.
As Nikola Motors demonstrates, batteries need not be the sole energy source driving greener vehicles. The company is working on hydrogen-powered vehicles in addition to battery electric trucks. Hydrogen offers significant advantages: it's quick to fill up and delivers good mileage — both metrics are similar to diesel. Significantly, using hydrogen has no carbon-based tailpipe emissions. Similarly, Geely's first commercial vehicle, launched in Beijing, delivers zero emissions while running on hydrogen.
Lower battery costs, which have dropped 90% over the past decade4, from $1,183 in 2010 to just $156 in 2019, will also make the case for less expensive greener cars.
A focus on lifecycle emissions
To truly calculate the carbon footprint of driving, it's helpful to look beyond energy consumption. The lifecycle of automotives, including manufacturing processes, matters as well. Volkswagen, for example, is putting its entire production supply chain under the microscope. Building on the principles of Industry 4.0, which digitises all processes, the automaker expects to achieve carbon-neutral manufacturing by 20235. Efficiencies will also apply to the company's supply chain and battery production.
Batteries used in electric vehicles are coming under the spotlight. End-of-life battery recycling is an essential way of ensuring the “circular" aspect of the CLIC system. Northvolt, for example, is developing a smart recovery infrastructure focused on extracting and refining elemental metals from batteries and pumping them back into the system. For its part, Sigma Lithium is mining lithium needed for batteries, through a green operation.
In June 2020, BMW announced6 that the batteries used in its electric cars will be produced using only renewable energy.
The smart city and smart driving
While digitisation drives supply chain efficiencies, expect “smart" cities to decrease traffic congestion (and therefore carbon emissions) by using technology.
Apps such as Waze already help motorists avoid clogged highways by rerouting them to alternate roads. Vehicle-to-vehicle and signal communications through high-performance wireless networks can automatically reroute traffic to less congested roads by real-time demand. Autonomous driving too is expected to deliver carbon emissions reductions. V2V communications will mean less braking and more regulated driving leading to less gas-guzzling.
Parking apps such as SpotHero help drivers find and reserve parking spaces easily without having to waste energy driving around in loops around congested city blocks.
A shrunken automobile
In the immediate lockdown after COVID-19, consumers switched to bikes and other greener forms of transport. The focus on micromobility is impressive: the United States alone experienced triple-digit growth7 in the sale of electric bikes.
COVID-19 has delivered a chance to not just make the automobile better, but to eliminate our dependence on it altogether. Cars are an incredibly inefficient means of transportation. Worse, they also take up more room to park. One car parking space can accommodate approximately nine bicycles and 16 scooters. Given that a majority (60%) of all journeys are less than five miles8, micromobility solutions are attractive for short-distance rides.
COVID-19 has delivered a chance to not just make the automobile better, but to eliminate our dependence on it altogether.
Preserving the form of the automobile but shrinking it, the 2020 Changli Nemeca from Alibaba is a tiny electric vehicle more like a golf cart retailing for $1200. While it might not be road-ready all over the world yet, it provides a model for future iterations to work with. Similarly NIU Technologies 9 introduced electric mopeds and three-wheelers to provide micromobility solutions in urban centers.
Asia is gearing up with many green micromobility projects of its own. Considered the world's largest ride-hailing service, China-based Didi Chuxing introduced electric and hybrid vehicles in its fleet and offers minibus rides to commuters. In Taiwan, Gogoro 10 is working on smart electric scooters, which direct riders to a local recharging station when the battery runs low.
Urban design
Moving beyond the car allows public spaces to be designed with a greater focus on inclusivity. The possibilities are enticing: wider high-speed bus lanes, wider bike lanes and more green spaces. As remote work becomes increasingly commonplace and as the world slowly goes back to work, the post COVID-19 landscape could ride on a dramatically decreased dependence on cars. Given our pressing climate needs, that would not arrive a minute too soon.
1 https://www.lombardodier.com/contents/corporate-news/responsible-capital/2020/march/transitioning-to-net-zero.html
2 https://www.energyvoice.com/other-news/240936/londons-carbon-emissions-plummet-by-60-during-lockdown-analysis-finds/
3 https://unfccc.int/news/cut-global-emissions-by-76-percent-every-year-for-next-decade-to-meet-15degc-paris-target-un-report
4 https://news.wttw.com/2020/01/02/falling-battery-price-transforms-economics-green-energy#:~:text=A%20dramatic%20fall%20in%20the,to%20just%20%24156%20in%202019.
5 https://www.volkswagen-newsroom.com/en/sustainability-4726
6 https://www.reuters.com/article/us-bmw-electric-batteries/bmw-to-source-battery-cells-produced-using-renewable-energy-idUSKBN24114R
7 https://am.lombardodier.com/files/live/sites/am/files/news/AM_news/2020/February/Adapting%20to%20the%20inevitability%20of%20climate%20change/White%20paper%20(synthesis)_Investing%20in%20the%20Climate%20Transition%20a%20Synthesis_Retail_EN.pdf
8 Idem
9 https://newsroom.niu.com/niu-launches-the-future-of-urban-electric-motorcycles-5g-connected-autonomous-and-self-balancing/
10 https://www.nytimes.com/2015/12/08/business/energy-environment/electric-scooters-and-a-network.html?_r=1
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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