By 2050, the way we move people and goods around our towns, cities and planet will be very different.
We will require a transport system that continues to drive a dynamic, vibrant and truly global economy, that continues to support thriving local and urban communities, but one that is fully decarbonized.
A zero-carbon transport system comes with significant benefits – as well as addressing climate change, it will help create new jobs and new commercial opportunities, as well as dramatically quieter, cleaner and healthier towns and cities.
This is not only achievable, it is possible sooner than we might imagine. To get there, we need an end-date for the internal combustion engine (ICE), and a wholesale switch to electric vehicles. The good news is this transition has already begun – the rate of change we are witnessing today is exponential and already passing the tipping point.
We are living through a radical transformation of our transport system: An emerging new global fleet of passenger vehicles that are 100% electric; manufacturers committed to a date when no more ICEs will come off production lines; businesses of all types deciding en-masse to electrify their fleets and consumers committing to making their next car an electric vehicle (EV).
It’s vital this transition accelerates. Despite efficiency improvements and electrification, transportation is still responsible for 24% of direct CO2 emissions from fuel combustion and road vehicles account for nearly three-quarters of all transport CO2 emissions, according to the IEA. The health impacts of ICE vehicles are widespread. Nine out of 10 people breathe air containing high levels of pollutants, including that from transport, data from the World Health Organization (WHO) shows.
The good news is we already have the solutions required to deliver the transition to zero-carbon fleets at speed and scale. Electrification of transport is providing a vital role in helping to bend the curve of global emissions, as well as reducing local air and noise pollution.
These are the signals of rapid change we are witnessing – right the way across the key areas of Supply; Demand; Policy; Technology; and Culture – which we look at in more detail below.
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World’s top automakers commit to EVs
Virtually all of the world’s largest automakers have committed to electrify part or all of their fleet – recognizing the growing demand signals and increasing policy support for zero-carbon transport. Many of these companies are going further – committing to limit their emissions in line with the goals of the Paris Agreement.
Companies back the science
30 companies in the Automobiles and Components sector have committed to science-based targets, through the Science Based Target initiative. Over a third of these have either committed or have had their targets approved this year (2020) – showing COVID-19 is not impacting climate ambition.
European automakers accelerate climate action
Germany’s BMW Group and Sweden’s Volvo Car Group are the latest global automakers to commit to setting a science-based target. This is in addition to four of Europe’s largest automakers, PSA Group, Volkwagen, Groupe Renault and Daimler / Mercedes-Benz AG, which all have approved science-based targets.
Mercedes-Benz heads for carbon neutrality
Mercedes-Benz joined “The Climate Pledge” – a commitment co-founded by Amazon and Global Optimism. As part of its achieving its own climate targets, Amazon has ordered more than 1,800 electric vehicles from Mercedes-Benz Vans. Last year, Mercedes-Benz owner Daimler committed to make its entire passenger car fleet carbon neutral by the close of 2039.
Volkswagen doubles down on electric models
German automaker Volkswagen has accelerated plans to electrify its fleet, committing to launch 70 fully electric models by 2028, up from an earlier pledge to sell 50 by 2025. VW also set long-term ambitions to make the entire company CO2-neutral by 2050, including its factories, offices and cars and has set a science-based target.
Volvo will not launch another ICE-only model
Volvo is making progress on its commitment to phase out purely petrol and diesel powered cars, which it announced back in 2017. By the middle of this decade, the Swedish manufacturer expects to generate half of its worldwide sales with purely electric vehicles and the other half with hybrid cars.
J apan’s auto giants back climate strategy
In Japan, Toyota Motor Corporation, Nissan Motor and Yamaha Motor have committed to set science-based targets, while India’s Mahindra & Mahindra has an approved target.
Tesla lays down a challenge
And of course there’s Tesla – the poster-child for EVs and a genuine pioneer – is now the largest automaker by market cap, having overtaken GM and Ford. It is also outselling luxury German models from BMW, Audi and Mercedes in the US market.
Supply chain pioneers step up
A growing number of companies in the auto supply chain are also committing, including German tyre giant Continental, Mexico’s Nemak and Portugal’s TMG Automotive.
EVdemand proves resilient
Despite a global slowdown in all car sales during the first quarter of 2020, caused by the economic impact of the COVID-19 pandemic, European EV sales rose – pushing the region’s overall EV penetration rate up to 7.5%.
Sales of EVs are set to grow
Sales of electric cars topped 2.1 million globally in 2019 to boost the stock to 7.2 million. Electric cars registered a 40% year-on-year increase in 2019, accounting for 2.6% of global car sales and about 1% of global car stock. BNEF analysis suggests that EV adoption will continue to accelerate despite the short-term impacts from the pandemic, with electric models accounting for nearly 60 percent of all new passenger car sales worldwide by 2040.
EV100 delivers a demand signal
Businesses account for about 50% of all light vehicles purchased. Corporate buyers of cars continue to signal their growing demand for EVs through the The Climate Group’s EV100. To date over 80 companies have joined EV100, including Deutsche Post DHL Group, UPS, IKEA Group, CLP Group and AstraZeneca, with a commitment to accelerate the transition to EVs and make electric transport the new normal by 2030. It also includes mobility solutions groups, such as India’s Shuttl and Lime in the US.
DHL delivers a bold vision
Electrification is now starting to make commercial sense for companies – like Deutsche Post DHL Group – with fleets of tens of thousands of electric vans and delivery bikes. DHL has committed to reduce logistics-related emissions to zero by the year 2050. As part of this effort, the company aims to operate 70% of its own first and last mile services with clean pick-up and delivery solutions, such as electric bicycles and vans by 2025.
LeasePlan is transitioning its fleet of 1.8 million
They’re not alone in making these large-scale transition decisions: LeasePlan – with 1.8 million vehicles on the road – is working toward net-zero emissions by 2030 and aiming to transition its employee fleet to 100% EVs by 2021.
UPS develops its ‘rolling laboratory’
It’s a similar story over at UPS. A company that is already operating one of the industry’s largest private alternative fuel and advanced technology fleets – a ‘rolling laboratory’ of more than 10,000 low-carbon vehicles, including EVs and hybrids.
IKEA aims for 100% of home deliveries by EV
IKEA Group has a massive home delivery fleet and is rolling out net-zero emission deliveries across five prioritized inner cities (Amsterdam, Los Angeles, New York, Paris and Shanghai) by 2020. The company’s goal is for 100% of home deliveries by EV or other zero-emission solutions by 2025.
Utilities embrace EVs
Some of the most visible fleets on our roads are utilities – the gas, electric, telecoms and water companies – that run large fleets of vans to keep the essential services we depend on running smoothly. A growing number of them are committing to accelerate the transition to EVs and developing charging infrastructure. The UK’s Centrica and SSE, EDF in France, E.ON in Germany, China Light and Power in China, and PG&E in the US are all starting a wholesale transition to zero-carbon fleets.
Battery costs are tumbling
The best measure of progress when it comes to battery technology for EVs is the cost in dollars of storing a kilowatt hour (kWh). In just eight years – from 2010 to 2018, this fell by 85% – from $1,160, to $176.
Battery costs are expected to full further
Battery prices are expected to fall below $100/kWh in 2024, which is the point around which EVs will start to reach price parity with internal combustion engine vehicles, according to BNEF. Industry-weighted average battery pack prices have already fallen to $156/kWh, according to BNEF’s 2019 Battery Price Survey, a fraction of their 2010 price of $1,160/kWh.
Alternative batteries are being developed
Several start-ups with batteries they believe will improve on current lithium-ion technology are due to introduce their cells to the commercial market imminently. Volkswagen has invested $100 million in QuantumScape, a solid-state lithium metal battery pioneer, while the Tesla Gigafactory in Nevada is expanding, as Panasonic invests an additional $100 million.
Charging networks starting to grow
Huge amounts of ambition and investment have been put into national charging networks around the world. To give an idea of the scale, charging infrastructure developers ChargePoint and EVBox have committed to installing over 3.5 million new chargers globally by 2025. Meanwhile, California has approved a $437 million project to install nearly 40,000 EV chargers, with Southern California Edison.
Technology is reshaping mobility
Numerous trends, ranging from autonomy and energy decentralization to the Internet of Things, are likely to come together to create drastic changes in mobility systems over the next 10 to 15 years. For example, vehicle automation and connectivity will help achieve climate goals, according to early research, through reduced congestion and journey optimisation, in addition to increased road safety.
Shared mobility is growing fast
The ride sharing market is projected to reach a market size of $218 billion by 2025 from $61 billion in 2018, growing 20% from 2018 to 2025. A study by Berkeley found that each car owned by a ridesharing service such as Uber or Lyft removes between 5.5 to 12.7 tons of greenhouse gas emissions per year.
The end of the car as we know it?
The way people, especially young people, are getting from A to B is radically changing. From ride sharing, to digital cab hailing, EVs on demand and electric scooters, the need and incentive to own a car in urban areas is being reduced. In fact many commentators predict the end of car ownership as we know it.
Formula E pulls into the lead
From entertainment to sport – Formula E – the EV format of F1 is now fully established, and no longer a back-water of motorsport. Indeed F1 is “unlikely to be using petrol by 2025”. And British racing driver Lewis Hamilton will enter a team in the new Extreme E racing series.
Cities get tough on pollution
City mayors from major cities like LA, Cairo and Beijing have started introducing popular emission-reduction measures. The impact of pollution on citizen health is well-known, but now those in charge know if they don’t do something to curb it, it will cost them something more than the health of their citizens – their votes.
It’s costing billions in healthcare
The impact of pollution on health – and it’s financial cost to governments – is immense. According to a report by Deloitte and InnoEnergy, smog reduction could save European citizens over $210 billion (€183 billion) by 2025. $210 billion that could be better spent elsewhere.
Countries are committing to phase out ICE cars
Around twenty countries have committed to completely phasing out gas and diesel powered light passenger vehicles in the coming decades. France and the UK have said that all new cars sold must be electric by 2040, while some countries have committed to achieve that earlier, including the Netherlands and Israel by 2030.
Cities are leading the charge
The number of cities with proposed end dates for international-combustion engine vehicles has risen to over 20, including London, LA, Cape Town and Mexico City. Many of these are looking to bring forward their proposed end dates.
C40 Fossil-Fuel-Free Streets Declaration
Dozens of cities have joined the C40 Fossil-Fuel-Free Streets Declaration, committing to purchase only zero-emission buses from 2025 and ensuring a major area of their city is zero emissions by 2030.
Cities and states join the #ZEVChallenge
Over 60 cities, states, and businesses have unveiled plans to deploy zero emission vehicle fleets, with the ZEV Challenge, created by The Climate Group, C40 Cities and the Under2 Coalition.
Boosting industrial competitiveness
Governments can see the economic benefits of policy leadership on EVs – as those countries seizing the opportunity of the EV transition are securing market share. For example, China almost doubled the production and sales of alternative fuel vehicles in the first seven months of 2018, compared to the same period last year. And much of this can be credited to the judicious use of policy.
GM invests in Detroit battery lab
GM announced it will invest $28 million to enhance its battery development and testing lab in Detroit as part of its shift to EVs, though this is relatively small compared to the company’s R&D investment total of over $7 billion.
Challenges to overcome
The transition to a fully net-zero carbon transport system will not be easy; there are some major challenges, and significant problems that have yet to be tackled.
Concerns about natural resources
The London Metal Exchange will only allow responsibly sourced metals to be traded from 2022. The OECD Due Diligence Guidance recommends that all companies in the minerals supply chain conduct risk-based due diligence to respect human rights and avoid contributing to conflict through their sourcing decisions. The government of the Democratic Republic of Congo (DRC) has made a commitment to eliminate child labour in the mining sector by 2025.
Rising to the challenge of existing ICE cars
Companies are springing up offering conversions for traditional ICE cars to EVs, often for a fraction of the cost of a new EV. This is helping to repurpose old batteries and keep cars from the scrapheap.
Overcoming the carbon footprint of manufacturing
Leading automakers like Daimler and VW are committed to reducing the entire life cycle emissions to zero in the coming decades, including the factories that produce the cars and the parts used to make them. Battery electric cars also make up for higher manufacturing emissions within eighteen months of driving because they generate half the emissions of the average comparable gasoline car, according to the Union of Concerned Scientists (UCS).
Concerns about the power used by EVs can be overcome
The transition to EVs should go hand in hand with the transition to zero-carbon power sources to ensure the electricity driving the vehicles is not polluting. But even with current power supplies, EVs can still outperform in terms of emissions. For over 70 percent of Americans, driving an EV results in fewer emissions than even a 50 MPG gasoline vehicle, according to UCS.
Ensuring a just, fair and inclusive transition
As companies and governments accelerate the transition to zero-carbon economies and build resilience to climate impacts, their actions could impact people, workers and communities unequally, both positively and negatively. Forward-looking businesses and policy makers are taking the necessary steps to ensure that the transition is achieved in a way that is just, fair and inclusive.
Ensuring no negative impacts
For the transport sector, this means ensuring workers employed in the production of vehicles, their supply chains and those in distribution and transport services, are not negatively affected by the transition to zero-carbon transport.
Taking the necessary steps
Forward-looking businesses and policy makers are taking the necessary steps to ensure that the transition is achieved in a way that is just, fair and inclusive, so the transition can be successful without leaving anyone behind.
The shift to EV can help boost jobs
Research suggests that the switch to electric vehicles will entail significant changes in the auto industry’s labour market and predictions regarding future employment impacts range dramatically. One study indicates that German GDP could be 0.5 percent higher compared to the baseline in 2030 because of investment in electric vehicles, with a potential net employment creation of approximately 145,000 jobs.
Change is happening faster than many expect.
And that is true about the transition to a zero-carbon transport future. What we are witnessing is a revolution happening right now, with signals of change all around us. The scale of this transition is often surprising if you don’t see the whole picture.
The benefits will be immense – not only will the transition help address climate change, it will also create jobs and sustainable growth, enhance the competitiveness of industry and protect the health of citizens. In addition, it will create greater resilience in the economy, energy security and dramatically improve people’s quality of life – through better air quality, quieter cities and cleaner energy.
This is the kind of future we want. For ourselves and for future generations.
While it is inspiring to see these clear signals of change and the momentum achieved, it’s not happening fast enough. Government and business can be more ambitious and speed up the delivery of climate action. To get to the net zero-carbon transport future, the adoption of key solutions needs to accelerate to ensure progress happens faster across the entire system.
We are creating a better future – and it’s our goal to make it happen faster.
What can you do to accelerate that change?
Join other leading businesses, step up and commit to bold climate action.
- Commit to net-zero emissions by no later than 2050.
- Set an ambitious science-based emission reduction target that’s aligned with what science says is necessary to limit global warming to 1.5°C.
- If your company uses, owns or manages a fleet of commercial vehicles, commit to accelerating the transition to EVs and making electric transport the new normal by 2030 with EV100, led by The Climate Group.
Drive change at the pace and scale required to achieve net-zero carbon emissions globally by 2050.
- Commit to ending sales of light duty internal combustion engine (ICE) vehicles by 2030.
- Enact enabling policies to accelerate the transition to zero-carbon transport.