What studies are finding: Adoption of clean vehicle technologies will stay small-scale for now but we’re likely approaching the cusp of change

Nissan Leaf on dealer lotWhile plug-in electrified vehicles did break the 1% mark for total U.S. new vehicle sales last month, and hybrids moved back to being over 2%, we’re still a long ways away from them making up a substantial share of the market. The same is true for advanced fuels like renewable diesel – sales volumes are up but it’s still very early in adoption of these new alternative fuels.

There are a few studies that expect market forces to continue shifting away from petroleum and toward clean, renewable energy and fuels.………

Driver survey on PEVs:  Altman Vilandrie & Company, a strategy consulting group, surveyed more than 2,500 U.S. consumers in July and polled more than 20 automotive industry experts. Despite significant advancements in PEV technology, 60% of American drivers said they were unaware about electric cars and 80% have never ridden in or driven one. The survey shows that a perceived lack of charging stations (85%), high costs (83%) and uncertainty over duration of charge (74%) were the top reasons for not wanting to purchase a PEV. Most of the survey respondents who’ve been inside an electric car enjoyed it; and many more would purchase a PEV if lower-priced models were available, with $35,000 being the price point asked about.

“While the EV adoption rate is low, there are signs of strong latent demand in the marketplace,” said Altman Vilandrie & Company Director Moe Kelley, who co-directed the survey.  “The auto industry still needs to make more low-priced models available to consumers, as well as finding a way for more drivers to try out an EV.  If those things happen we should see the EV adoption rate accelerate.”

PEVs could be one third of global sales:  PEVs could make up 15% to 35% of global new vehicle sales in 2040, according to IHS Markit. While still making up a very small percent of global sales, the consulting firm points to 2016 sales being up more than 1000 percent since 2010, a trend that IHS Markit expects to continue with the potential to make PEVs more than one third of the new vehicle sales in 2040. China and Europe, where government policies are favorable to PEVs, were behind the consulting firm’s estimates that PEVs could comprise over half of their new passenger vehicle sales in 2040.

“Significant advances in battery technology, financial support from governments, regulations and values of millennials will be key factors leading to increases in electric vehicle adoption,” said Jim Burkhard, study co-director and chief of research at IHS Markit for crude oil markets and energy scenarios.

IHS Markit will be conducting a comprehensive new study to be completed in 2017, Reinventing the Wheel. Other critical factors to be examined by the study include the potential impacts of car sharing, ride hailing and autonomous vehicles on the transportation ecosystem.

“The key question is whether we are approaching a transformative shift akin to the first decade of the 20th century, when the internal combustion engine, cheap gasoline, bicycle technology and mass production combined to usher in the automotive age,” said Dr. Daniel Yergin, vice chairman of IHS Markit and author of The Quest, which tracked the beginnings and growth of the auto and oil industries. “Converging developments along multiple tracks are leading us to focus on this important question.”

Low carbon fuel standard becoming methodology of choice:  Lux Research conducted a detailed study concluding that California’s low carbon fuel standard is more likely to become the industry standard for governments to hit emissions reduction targets over the federal government’s biofuel blends policies. New policies are coming out supporting the LCFS models for being “technology-agnostic carbon intensity metrics,” according to the study. Lux concludes that well-to-wheel analysis will become the analytical model with more governments adopting the carbon intensity model. That model measures the amount of carbon by weight emitted per unit of energy consumed. Feedstock, process technology, and power sources in well-to-wheels metrics were analyzed in the Lux study. The report said that renewable diesel and conventional electricity will be the near-term winners in low-carbon transportation fuels, followed by renewable electricity.

In separate news, Canada moved forward in adopting the low-carbon fuel policy. Last month, Minister of Environment and Climate Change Catherine McKenna announced that Canada will adopt a national clean fuels standard. Similar guidelines previously adopted in California, Oregon, and British Columbia, were studied in the adoption of the new Canadian standard.

Municipalities, fleets, and energy companies have been tapping into California’s policies in recent years. Renewable diesel is the fuel source for vehicles in the cities of San Diego, Oakland, San Francisco, Long Beach, and other California municipalities. Propel Fuel is brining renewable diesel and other alternative fuels to retail gas stations around the state. DuPont is bringing its cellulosic ethanol to the state; and Clean Energy is tapping into state incentives to get its Redeem renewable natural gas product moving forward.

Diesel fading away even farther:  Earlier this month, the mayors of Paris, Madrid, Athens, and Mexico City announced plans to remove diesel cars and vans from their roads by 2025. Other cities are being urged to do the same to reduce air pollution. This development coincides with a UBS forecast that diesel will “almost disappear” from the global vehicle market within 10 years. The fossil fuel faces serious competition from cheaper electric cars and tougher stances by regulators, according to the report by the global firm providing financial services.

Falling costs of PEV and hybrid vehicles is taking away the once-competitive price advantage diesel vehicles had over the new technologies. Emissions rules are tightening up, along with soured public sentiment, over the Volkswagen diesel emissions cheating scandal. UBS forecasts that sales of diesel vehicles will fall from 50% to just 10% in European new vehicle sales. Diesel had been a viable option for reducing emissions, as they emit about a fight less carbon than petroleum equivalents. It’s no longer the easy option it once was, with tightening rules over nitrogen oxide emissions, which are emitted by diesel engines.

The study predicts that 48-volt electrical systems, sometimes called “mild-hybrid,” will be part of the transition away from diesel cars. UBS predicts that sales of 48V cars that increase fuel efficiency will overtake diesel sales globally in 2021, and will account for about 25% of all light passenger vehicles sold by 2025. The study does forecast that diesel would remain dominant in trucks and large SUVs.

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