Daimler CEO Dieter Zetsche was reported by Bloomberg to have said on 11 November at a corporate CSR event in Stuttgart that “Governments should offer consumers financial incentives to buy electric vehicles to help offset the extra cost for manufacturers to build the cars.”

Bloomberg made him sound as if he’d been living under a stone for the past several years. There’s barely any country in the world that doesn’t already offer what Dr Z was asking for. But he had a point. He and his competitors are investing in EVs and FCVs to meet mandatory emissions targets, but, as he said, “Even in the best case, the cost of electric autos might run several thousand euros more than conventional vehicles for the foreseeable future … we won't earn high returns from electric vehicles for years to come.”

EVolutionary fiscal policy needed

Any returns at all would be useful, but they might not be deserved from today’s drastically limited EV performance and astronomic price. Dr. Zetsche suggested that government incentives for EVs should be linked to technological advances such as battery performance, making an admirably direct reference to the absence of a conventional business case for building EVs with present technology until the oil wells have finally run dry.

Replacing oil for light vehicles is going to take all the time we have before the oil does run out, according to a new report from the UK-based automotive research company Trend Tracker, EVs: Energy, Infrastructure and Mobility in the Real World. But between now and the next $200/bbl oil crisis, only the subsidies that Zetsche and other OEMs are banking on can have any chance of making EVs seem attractive purchases. And until their range trebles, most EVs will be second cars for short-range commuting, sold in small numbers to affluent early adopters who will be the least deserving of taxpayers’ involuntary support. Alternatively, most may be bought by taxpayers for city councils' car clubs, like Paris’s Auto Lib project.

Would you Adam and EV it?

The same fairness problem applies to over-generous feed-in tariff subsidies for home electricity generation, as pioneered in Daimler’s home market. UK homes with solar PV panels on the roof can sell power for 10 times what a large wind farm gets. They can buy it from the grid at around 12p per kWh, and sell it back at 44p per kWh. And their output is going to be based on estimates only. “Come on in, you crims, the door is wide open,” as green campaigner George Monbiot put it. None of this will do much if anything to decarbonise the UK’s power mix. But greening the mix to produce genuine ‘well to wheel’ emissions reduction for EVs is one of the many conditions, besides vastly better batteries and a quite different tax system, that will be necessary for their successful evolution.

EVs: Energy, Infrastructure and Mobility in the Real World will be published in January 2011, with chapters on:

• EV technology
• Battery chemistries
• Profiles of X EV manufacturers and Y traction battery manufacturers
• EVs and power generation
• Recharging infrastructure development
• Oil and other critical resource constraints
• Market penetration forecasts
• Fiscal policies
• Business models

This report from Trend Tracker Ltd., one of the UK’s foremost automotive research companies, is based on strategic research and three years of tracking developments in the EV and automotive sectors. No mere technology update, it offers uncomfortable advice based on a mass of technology, energy and resources data. It’s designed to help investors, politicians, environmentalists and senior executives in the automotive and power utility sectors get to grips with the dynamics and problems of what could be the most seismic transition since globalisation –from oil to electricity.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report, bodyshop market, car finance, electric vehicles, car servicing, automotive research