2018.09.20

Climate Summit in California

In this week’s electric vehicle news, we focus on the Climate Summit in California and the challenges faced by national and local governments and utilities in decarbonizing the electrical grid. We also report on the latest EV news from Audi. Lucid Motors and Cadillac. We finish with disruption faced by the aviation industry from electrification.

Climate Summit California: With the federal government taking a less active role in climate change, a number of states and local governments have stepped up their efforts to combat climate change. At the Climate Summit last week, organizer Governor Brown of California brought together mayors, governors and business executives to promote their local climate strategies. The summit sought to highlight successful programs from local incubators globally and spread those ideas. Of note, there were pledges by local governments to reach zero emissions and convert their bus fleets to electric. A number of philanthropists collectively pledged $4 billion over five years to fund climate change initiatives and various states created a collective EV purchasing platform.

As we have reported in previous newsletters, scientists and economists are raising the alarm that climate change is occurring faster than originally predicted and substantial work needs to be done to limit global warming to the two degrees pledged in the Paris Agreement. While the agreements from this summit alone would not be sufficient, they do create a sense of urgency and momentum. NY Times (“California Had Its Own Climate Summit. Now What?”)

A sculpture of a polar bear made of car hoods outside San Francisco’s Ferry Building during the summit. Credit Josh Edelson/Agence France-Presse — Getty Images

Public opinion on renewables is putting pressure on utilities. Renewables are seen to be clean, high-tech and a strong employer for the new economy jobs. In the US, 80 cities, five counties, and two states have committed to 100% renewables. Six cities have already hit that target. A number of the world’s largest companies have also committed to reaching 100% renewables, including Google, IKEA, Apple, Microsoft, Coca-Cola, GM, and Facebook. Regardless of where policymakers stand on mandating utilities to switch to renewables, utilities will respond to the “mandates” of their largest customers. For utilities, however, this presents a formidable challenge. Apart from the technological challenges, the switch would leave them with expensive, stranded assets by shuttering fossil fuel plants.

The utilities’ dilemma was brought home by recent research conducted by the Edison Electric Institute, a trade group for the utilities. It found that renewables are popular among the public—51% surveyed would favor 100% renewables even if that raised their utility bill by 30%. The conclusion of the study: the decarbonization ship has sailed and consumers do not want to hear excuses from their utilities. Vox.com (“Utilities have a problem: the public wants 100% renewable energy, and quick”).

Car News

For those watching the Emmy’s on Monday, you were treated to an ad from Audi for its first EV-the e-tron.

Another contender for the title of Tesla buster also emerged on Monday with the announcement that the Saudi sovereign wealth fund, PIF, is investing $1 billion in EV startup Lucid Motors. Ironically, PIF was the fund that Elon Musk claimed in August was underwriting a potential take-private of Tesla. Lucid plans to launch its first car in 2020 with the top of the range model breaking through $100,000. Lucid claims a 400-mile range.

Underscoring how far we have come from recent history when diesel’s higher efficiency looked like the future of the automobile, Cadillac announced it is swapping its diesel program for an EV future. Cadillac President, Steve Carlisle, announced that change during last week’s launch of the XT4: “We have been working on diesel, but the markets may be changing more quickly than we anticipated. Going forward, we will focus on electrification.” AutoNews (“Cadillac puts diesels on hold”.)

The EV market is starting to look like a crowded space with traditional carmakers and startups producing cars across various price levels and sizes, all vying for consumer’s attention. The key to EV adoption is not going to be choice of cars and price but whether the charger infrastructure can keep up with the demand.

Other EV News

We have previously discussed the fast-growing adoption of electricity in city bus networks. A quieter disruption is also occurring in the aviation industry. Advances in materials, batteries and energy is threatening to dislodge the 80-year dominance of the jet engine. Similar to the car market, however, legacy manufacturers are guaranteed to be the EV airplane producers of the future.

The biggest aerospace companies are racing to bring electric planes and fend off competition from startups. Of the companies who have publicly announced electric aviation projects in the last nine years, only 30% are from Boeing, Airbus or Rolls-Royce. The remainder are startups or new entrants to aerospace. There are, however, limits on electric planes. Current batteries have a significantly lower energy density than jet fuel. Even with a fivefold increase in battery density, it would take 180 tonnes of batteries to fly an A320 3,000 nautical miles. However, for shorter flights and with hybrid technology alone, the disruption across the airline industry and engine makers is likely to be transformative. Financial Times (subscription required.)