Electric vehicles are climate-friendly but not a cure-all solution

Electric vehicles (EVs) are considered climate-friendly alternatives to internal combustion engine (ICE) vehicles. EVs can limit ecological damage, reduce smog (mix of smoke and fog i.e., air pollution) and protect public health. Driving an EV (i.e., battery operated car i.e., BEV) off the current grid is still much less polluting than driving an ICE vehicle. According to the modeling by the NRMA and PwC Australia, an average new ICE vehicle emits around 185 gCO2/km compared to an average new battery electric vehicle (BEV) which emits around 98 gCO2/km, if charged via the grid. ICE vehicles emit a range of particulates, contaminants, gases and a lot of heat as a result of the combustion process, whereas BEVs emit a little heat only. However, if EV battery is charged from "dirty" power sources, it would contribute to global warming.

Governments and automakers around the world have been promoting EVs as a key technology to curb oil use and fight climate change. However, an important but often ignored fact is that the climate mitigation benefits of BEVs are usually delayed.

EVS COST MORE BUT WITH UPFRONT SAVINGS: EVs generally cost more to buy than petrol and diesel vehicles. However, prices are falling as more players enter the market. Governments in countries offer incentives to help ensure the next car one buys is not a gas guzzler. The Australian government also offers a fringe benefits tax exemption if one buys an EV by salary sacrificing.

CHARGING OF EV IS CHEAPER: The cost of charging an EV is cheaper than filling a tank with petrol or diesel. For example, charging a 65kWh electric HundaiKona overnight cost about A$20 while the cost of filling the petrol tank is closer to A$90. Another cost saving comes from servicing. EV models do not need servicing as often because they do not have an engine, gearbox, spark plugs and exhaust systems.

Australians bought more than 87,000 EVs in 2023. Lack of public fast-charging infrastructure is often quoted to be a major barrier to electric vehicle uptake. It is reported that Electric vehicle charging sites will double in Australia over the coming year. The number of cars-charging stations surged by 90 per cent in Australia during 2023. Local firm Chargefox had installed the greatest number of electric chargers in Australia (The Guardian).

EVS ALSO PRODUCE EMISSIONS: EVs do not produce any tailpipe emissions. However, EV's lifecycle emissions may be considerable. Emissions produced during a vehicle's production, operation and disposal are often collectively called "lifecycle emissions". These include emissions produced during:

l the vehicle manufacturing process;

l to manufacture a vehicle and its battery (as is the case for all vehicles)

l to generate the electricity for an EV

l from tyre, brake and road wear (as is the case for all vehicles).

l the transport of the vehicle to its first point of sale

l generation of electricity

EVS ARE LESS EMITTING BUT THEY MAY ALSO CONTRIBUTE TO EMISSION: Most electric cars tend to produce significantly lower emissions than most cars operated with gasoline. Even though electric vehicles are more emission-intensive because of their batteries, their electric motors are more efficient than traditional vehicles run by fossil fuels. Experts largely agree that electric vehicles create a lower carbon footprint over the lifecycle than do traditional cars and trucks that use internal combustion engines.  For this reason, the world has experienced a rapid growth of the EV market. As for instance, the EV stock reached 16.5 million worldwide, triple the amount in 2018. EV sales have grown significantly in recent years. In 2020, EV and hybrids constituted more than 10 per cent of total car sales. And there is a growing political and economic will to transition to EVs (UNFCCC, n.d.).

However, there is a misconception about EV. EVs are not emission free and by no means a silver bullet. Dr. Sergey Paltsev, an EV expert, believes the biggest misconception around EVs is the concept they are going to decarbonise transport. The notion of EVs as "zero emission vehicles" must be properly qualified due to the need to decarbonise electricity production (that EVs use) and account for emissions during mining of minerals and refining of rare metals needed for battery production, such as cobalt and lithium. For example, for every ton of extracted lithium, between 5 and 15 tonnes of carbon is created. Manufacturing batteries also results in long carbon journeys.

The level of emissions depends on where the electricity to charge electric vehicles comes from. EVs are only as green as the power grid they draw from. For example, if a person drives an EV in Norway, where most electricity is powered by near zero emission hydroelectricity, then the person is contributing much lower levels of CO2. But if the person drives the same car in China, where most electricity comes from coal-fired power plants, he may be contributing as much CO2 equivalent as that, of using two-thirds of a tank of petrol.

 It is generally more expensive to charge an EV at a public charging station than at home. The full benefits of EVs are available when electricity sources become renewable (hydro, wind, solar, nuclear etc). An EV can produce zero emissions from vehicles if it uses 100 per cent renewable energy. However, it might take many years for that to happen. It is imperative that electric grids need to get much, much cleaner before electric vehicles are truly emission-free.

MAKING BUILDINGS 'EV-READY': EV charging is a high-power application. It impacts overall building power supply. Only the owner of the building can make strategic investment decisions for a commercial building. A tenant may initiate a request to the owner to provide EV charging.  An owner may facilitate the tenant by providing with a few dedicated EV charging car spaces and expanding the number as demand increases (NSW Government 2023). 

Buildings need to have features to accommodate EV charging. This is not even present in developed countries. Not many existing buildings in developed countries currently accommodate EV charging. Government department may develop helpful guidelines for making buildings EV-ready. This will help owners, managers, occupants and strata managers design, retrofit and wire 'EV readiness' into apartment and commercial buildings.

EVS ARE STILL ON THE WINNING SIDE: Compared to fossil fuel cars, electric cars use less energy and can charge from zero-carbon sources. The picture for electric cars will improve as power from the wind, hydro and the sun, replaces gas and oil, reducing carbon emissions from generating electricity. Lucien Mathieu, T&E's cars director, said that even if you choose a worst-case scenario - vehicles made and run with electricity largely from coal - the electric car will win out after about 70,000km (about six years of driving). "The more you drive an electric car, the better it gets" (The Guardian, 23 Dec, 2023). Further, battery development is still in relative infancy, and is likely that EV batteries will be developed further with new technology, resulting in lowering costs and putting the balance further in favour of EVs.

POLICY NOTES: Unlocking a lower interest rate to buy EV is another policy support. The Commonwealth Bank in Australia offers personal loan discounts for customers who show willingness to invest in an electric vehicle. The Commonwealth Bank's EV loan covers the cost of the vehicle, charging station and batteries.

It is hoped that as the numbers of EVs on the road increase, the infrastructure will also increase. The mass rollout of EVs depends on the availability of charging stations. The supply of charging stations on the other hand depends on expected demand for EVs. This chicken and egg problem may be solved with well-coordinated public policy.

Despite huge potential and increasing adoption, EVs will not be a magic bullet for sustainable transportation. Enhancing public transportation, land-use planning that encourages compact development, and reducing the use of private motorised transport by mode switching to walking, biking and public transport will be essential for a carbon free sustainable transportation. Not having an electric car is better for the environment if we can rely on public transport instead.

The respective authority/government body may consider forming a fund/needed policy supports to build fast-charging stations. Cutting taxes on EVs could be another option to encourage EV uptake.                                         

Mohammad Abu Yusuf is Additional Secretary, Finance Division, Ministry of Finance, Government of Bangladesh.
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