Yves here. Since this article comes from OilPrice, one would expect them to be big fans of electric cars. However, the tacit assumption among many policy makers is that drivers will choose or not be forced to use EVs exclusively. However, Toyota, admittedly lagging behind in the EV race, has never been weary of fully electric vehicles because they believe the market for EVs is much smaller than advocates think. From Inside EVs in January:
Former Toyota CEO and current Toyota Chairman Akio Toyoda has long been a proponent of a hybrid fuel future—hybrids, gas engines, hopefully eventually hydrogen, and more… cap the world.
According to Toyota, that magic number is 30%. He says EVs will be, illegally, about 30% of all vehicles sold. The rest of the market will be satisfied by hybrids, hydrogen fuel cells, and conventional combustion engines….
It’s not clear where Toyoda is getting this figure from, or if he has a specific date in mind for this hat to happen…
Last year, EVs accounted for 18% of all vehicles sold worldwide. That number is only expected to grow. BloombergNEF, for example, says EVs will account for 44% of new vehicles sold by 2030 and 75% by 2040. This figure will vary from country to country, as some will lag behind existing infrastructure needs.
As a car manufacturer, Toyota has been consistent with its EV releases. The brand has been a staunch supporter of hydrogen, although it looks far ahead of the success of FCEVs. Today, it has embraced EVs as a necessity to fill the gap between hybrids and FCEVs, but Toyoda says it will never completely fill the world’s needs—hence the company’s “multi-pronged approach” to the future.
Toyoda says infrastructure is one of the biggest problems plaguing EV adoption. With more than 750 million people worldwide without electricity, there will certainly be a market for combustion engines to continue to exist, however, just because someone has access to electricity does not mean it is reliable, or that the grid can continue. influx of EVs in the short term without development. And that’s where Toyoda believes there’s still room for hybrids, fuel-cell EVs, and hybrid vehicles.
Having said that, this set of EV deterrents seems to exceed the purchase price of EVs. Many readers know that China has very competitive offerings that we in the West are not allowed to buy. It also features longer charging times. Some readers will object to Chinese battery changing stations. I remember that this was considered as an option during the development of the first serious EV in the US (I drove an EV prototype in 1993. It had very little power). The reason interchange was rejected was that interchange stations would require more real estate than gas stations and were therefore considered too difficult and expensive to build.
By Irina Slav, an Oilprice.com writer with over ten years of experience writing in the oil and gas industry. Originally published at OilPrice
- Renault, China’s Geely, and Saudi Aramco are investing in new combustion engine technology.
- Renault and Geely chose another way to achieve it, using fuel efficiency and other technological improvements in internal combustion.
- Accessibility is one of the factors that make drivers loyal to ICE technology.
Almost every single prediction about the future of transportation centers on electrification—the idea that EVs will take over the roads, displace the internal combustion engine and make it a thing of the past.
Not everyone agrees, however, and that includes Renault, China’s Geely and, as of last month, Saudi Aramco. The three are investing in a company developing powertrain technology for combustion engine vehicles. The future may not be as electric as one might expect.
Horse Powertrain came into being at the end of May as a 50:50 joint venture between Renault and Geely. At the time, Renault’s chief executive said the company would aim to be a leader in “low-end internal combustion engines and advanced hybrid technology.”
Decarbonization, then, is still the priority. However, Renault and Geely chose another way to achieve it, through efficient use of fuel and other technological improvements in internal combustion rather than going completely electric.
It’s no surprise that Aramco is joining the group, especially given the recent performance of its EV darling, Lucid Motors. Lucid has seen its share price drop from more than $50 apiece to less than $9 in three years and missed its delivery target in the first half of this year despite boasting record deliveries—2,394 vehicles.
The Saudi oil giant likes to spread its eggs in a few baskets, and it looks like the ICE basket is still popular. People still buy more internal combustion engine cars than electric cars. Most EV drivers want to return to their internal combustion engine vehicle. Things are not looking good for the electrification of transport, as the general problems of the new technology are still being worked out. However, they there is looks as tough as ever in indoor heat.
“It will be very expensive for the world to completely shut down, or do without combustion engines,” Yasser Mufti, senior vice president at Saudi Aramco who was in charge of the Horse Powertrain deal, told the Financial Times. “If you look at affordability and a lot of other things, I think they’re going to be around for a very long time.”
Accessibility is definitely one of the things that makes drivers loyal to ICE technology. For all the efforts EV makers have made to lower the price of their electric vehicles, and for all the government support for the technology, EVs remain more expensive than comparable internal combustion engine vehicles.
Of course, affordability is only part of the car equation. The other involves fuel or charging time and in this case, the ICE vehicle also beat the EV. For all the talk about how easy it was to charge your EV overnight in the comfort of your garage, EV bulls have begun to predict that globally, only a handful of drivers have an EV charging garage in it, while the majority would like to. the need to rely on public chargers. Also, only a few drivers would be willing to spend hours charging their cars overnight or not.
Perhaps the best proof of the lasting power of the combustion engine is the latest figures for car sales from China. The world’s largest market, China has been breaking records in EV sales. This seems to have created the impression that half of all cars in China are electric. In fact, the reality is quite different.
Xinhua reported earlier this week that the number of vehicles on China’s roads reached 440 million by the end of June. Of these, the data showed, new energy-efficient vehicles accounted for 24.72 million. Of these, 18.13 million were plug-in electric vehicles—what we commonly call EVs, and the rest were hybrids. In percentage terms, then, EVs barely represent 4.1% of the Chinese market. In other words, even in the world’s largest EV market, with billions spent on charging infrastructure and making EV emissions cheaper, many drivers still choose internal combustion vehicles.
“We believe that from 2035, 2040 and even beyond 2040 we will still see a large number of ICE vehicles,” Matias Giannini, CEO of Horse Powertrain, told the FT. “Definitely, more than half, and 60 percent of people will still have some kind of engine, whether it’s a pure ICE, a full hybrid or a plug-in hybrid.”
The internal combustion engine has survived for a long time and remains the dominant transportation technology for one simple reason: it was better than the alternatives and its benefits have consistently outweighed the costs. It’s in the form of cost-benefit analysis that the EV revolution stumbled and fell—because it seems no one ever bothered to do that analysis. So the market did it for them, as the EV boom that was loudly celebrated last year slowed down before the year was out. Horse Powertrain can still find new shareholders.
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