Member Article

Insufficient EU demand for clean vehicles, suggests report

Clean vehicles have created “insufficient demand” in the EU, according to a new European Commission report, a claim refuted by some industry experts.

The report predicts that European hybrid electric vehicles could capture 8.8% of the market by 2020, but suggested more efforts are needed to increase domestic market take-up.

European Commission authors noted infrastructure for alternative power is lacking and there are uncoordinated incentives for the purchase of clean vehicles, as well as insufficient demand.

Dr Colin Herron, managing director of Zero Carbon Futures suggested the assertion of insufficient demand would be tested with the arrival of a European produced vehicle.

Among other stumbling blocks were lack of a level-playing field and good access to third markets, particularly for vehicles using break-through technologies.

Dr Herron said: “The car industry is going through a major transformation right now and we anticipate that the market will see gradual growth whilst consumers change the way they choose to drive. These new technologies are being introduced to the market in a controlled manner to allow for the customer, manufacturers and equipment suppliers to adapt.

“The adoption rates are not as a result of price and infrastructure but of the capacity to manufacture the vehicles. Whilst there is a large capacity to manufacture vehicles, there is a small capacity to manufacture the Li ion batteries.

“At the current rate of battery manufacture, we would be seeing 1% of the market by 2020. Let’s not forget however, the Nissan LEAF is the second bestselling car in Norway so certain markets have already embraced electric driving.”

A ‘Task Force on Clean Vehicles’ has been established to tackle some of the issues; a working group under the CARS 2020 process, a scheme aimed at bolstering the automotive industry’s competitiveness and sustainability.

An IPPR report published in April said ultra-low-emission vehicles presented an “unmissable window of opportunity” for the British automotive industry, and called for focus on building a strong domestic market.

The think tank suggested incentives for purchasing and usage should be more actively promoted and guaranteed for longer and the charging point infrastructure expanded.

Looking more broadly at the entire EU automotive industry, the report said import demand from emerging economies had offset “harsh” conditions across domestic markets.

The report also suggests the EU automotive industry is at a crossroads and manufacturers will have to work hard to maintain their technological competitive advantage.

Vehicle exports to China increased fourfold between 2007-2012, and exports to other emerging countries expanded at lower, but still considerable, rates.

Sales of motor vehicles on the EU markets plummeted in 2012, compared with the already low levels of 2011. Despite what were described as “aggressive” discounts and incentives, car sales amounted to 12.1 million; the lowest level since 1995.

The European market is currently dominated by small passenger cars as customers preferences lean towards smaller, more energy efficient vehicles.

EU decarbonisation targets for cars remains “ambitious” the report’s authors said, and distribution of this target across different vehicle types could impact consumer choice.

This was posted in Bdaily's Members' News section by Tom Keighley .