Clearing the road for low carbon cars

Last week saw the second annual low-carbon vehicle expo, LCV 2009, held at Millbrook in Bedfordshire. The event was organised by Cenex, the quango set up in 2005 by the Department for Business, Innovation and Skills (BIS) to stimulate the development of low-carbon transport in the UK.

Many of the speakers at the conference noted how much progress had been made in the field of electric transport in the 11 months since the first show. A wide variety of production and experimental vehicles were on display at the event and many could be driven by delegates, from the Modec electric truck now sometimes seen in supermarket livery delivering groceries to the low-slung Tesla electric sports car.

In his opening keynote the minister for science and innovation, Lord Drayson, confirmed that the UK government has now established its planned Office for Low Emission Vehicles (OLEV) within the Department for Transport. The new body will co-ordinate programmes such as incentive schemes for electric cars and their recharging infrastructure, or "plugged in places" to use the government's jargon.

Michael Hurwitz, head of environmental policy at OLEV, delivered an upbeat speech to the audience of motor industry executives, fleet buyers and public-sector budget holders. "This event is bigger and more impressive than last year," he declared. "Not just in physical size, but in its real sense of momentum. There’s now less dissonance between government, industry and consumers."

The remnants of that discord were still easy to find, however. Graham Smith, deputy president of the Society of Motor Manufacturers and Traders and a senior vice president at Toyota, called for more international co-operation between governments in both green regulation and taxation regimes.

"We absolutely want consistency on regulation and fiscal structures," Smith said. "We do have some certainty on regulation in Europe, but not in fiscal structure, which varies from country to country. To be able to build and supply and make a profit requires stability, given the length of the cycle [required to develop a new car]. The more stability we can enjoy, the more successful we can be."

Professor Julia King, vice chancellor of Aston University and author of the Treasury's King Review of low-carbon cars, took a different stance. She put the onus on carmakers to carve out their own future, arguing that excuses for inaction had already run out, regardless of any concerns over shifting government policies.

"I entirely sympathise with the need for stability [from government], but let's have a bit of reality here," she said. "We have significant challenges in, for example, aviation emissions. Given the rate of growth of the market, aviation will not get anywhere near the government's targets for 2050. We will be lucky to get back to 2005 levels by 2050. That just raises the bar for everyone else. Shipping is even worse than aviation. There is only one direction this challenge is going and that's to get tougher. There are no silver bullets. I think the successful manufacturers are going to be the brave ones."

One of the bravest firms at the show must have been Nissan, which plans to mass-market a pure electric car late next year called the Leaf. It is also working with governments and utilities around the world to bootstrap the creation of recharging networks. It has put hundreds of millions of dollars into the effort.

"The global population is expected to reach nine billion by 2050," noted Andy Palmer, head of the zero-emissions business unit at Nissan’s Japanese headquarters since February. "Today there are 600 million cars circling the globe – the forecast is for 2.5 billion cars by 2050." Given the numbers, Palmer argued that zero-emission cars ultimately fuelled by renewable energy are "the only sustainable model going forward".

However, Toyota's Smith suggested that initial demand for purely electric cars like the Leaf might be distinctly lukewarm. "The roadmap to the mass market is now laid out, and the step to plug-in hybrids is already beginning," he said. "But the change will not be a big bang, it will be gradual."

Smith added that for most consumers, purchasing criteria remain stubbornly unchanged. "Price, deal and value are still the motivators," he said. "If the vehicle is not in the proceed-to-purchase band for those three factors, it doesn't matter if it's environmentally friendly or not. It's not going to happen. So we not only have to make good cars, they have to be affordable."

Even those green cars that offer good value face challenges winning over customers, according to Smith, who noted that performance and comfort are still ranked above the environment by most purchasers. "Environment is in the top ten today, but not in the top five," he observed. "That's one of the challenges we have to face, particularly with pure electric vehicles (EVs). Cars need to tick all those boxes. The mass-market consumer will not make substantial compromises in relation to those factors."

There was also an elephant in the room at the show, or rather an elephantine absence. Major oil companies and utilities were barely represented, despite the pressing need for their involvement in developing hydrogen refuelling infrastructure and recharging networks.

Dave Shemmans, chief executive of engineering firm Ricardo, downplayed the absence. "I wouldn't worry about the oil companies," he said. "They realise they are in the business of energy supply. They have the cash to develop batteries and other technologies – you will see them get into this area."

Professor King predicted that energy suppliers would also fall into line and increase investment in recharging infrastructure, as much for commercial reasons as the good of the planet. "Utilities have good reasons to be interested in EVs, " she said. "They need the additional demand as an incentive to invest in new nuclear or indeed coal power plants with carbon capture. We are going to need to see electrification [of vehicles] to get the stimulus for investment." She also noted that government programmes designed to increase the energy efficiency of homes and offices are expected to lead to a fall in demand for power, and that the utilities will welcome the fresh demand promised by an increasing uptake of electric vehicles.

Nissan's Palmer added that the success of green transport technologies was largely dependent on these self-same utilities. "It is clear that while the EV itself is zero-emission, the bulk of the effort to reduce global warming will need to come from the power-generation sector," he observed. "Renewable energy such as solar, wind, hydro or nuclear power generation must be expanded further to lower our carbon footprint."

This is a sobering thought – if there is substantial uptake of electric vehicles we will see the car industry largely transfer responsibility for carbon reduction to the utilities sector. By the time of the next LCV show, the oil co mpanies and other energy giants will need to be firmly on board to avoid a stall in the promising progress towards lower-carbon cars.