Your new electric car: great for the manufacturer, but is it good for you?
Limiting visibility to consumers on the environmental benefits means that automotive manufacturers are the real winners in the short term
Faced with increasingly stringent environmental regulations being imposed by governments globally, automotive manufacturers are developing electric cars in an effort to reduce the emissions of all the cars they produce. For example, by 2021, manufacturers in Europe must achieve average emissions across all new cars sold of 95g of CO₂ per km, compared with 130g/km in 2015.
Whilst many governments are offering subsidies for purchasing new electric vehicles to help meet these targets, the majority of the final bill has to be paid by consumers. The automotive manufacturers are thus reliant upon consumers to fund their environmental obligations.
Electric cars, however, are largely being marketed and sold to consumers in the same manner as those with internal combustion engines that they are meant to replace. ‘Ludicrous’ acceleration figures are paraded to appease incumbent consumer thirst for V8 power but for what are ostensibly meant to be products of efficiency and sustainability. On this point, manufacturers may highlight that their vehicles emit zero CO₂ or produce zero tailpipe emissions, but whilst this is technically accurate it is arguably grossly misleading. The glossy brochures do not cover the several tonnes of carbon emitted to manufacture the new electric car, or that stem from generating the electricity needed to charge the car.
Every electric vehicle sold brings the automotive manufacturers one step closer to meeting their immediate environmental obligations. For the consumer fitting the bill however, the current reality is that any environmental benefits from replacing an existing petrol/gasoline car with a new electric one will take multiple years to materialise. Furthermore this is highly dependent upon where they live, the impact might not be as large as expected and the benefit may not even be realised until the next owner.
To demonstrate this, the article reviews the quantitative evidence to determine how long it takes until a consumer’s decision to replace their existing internal combustion engine (ICE) vehicle with a battery electric vehicle (BEV), actually starts to reduce their carbon footprint rather than simply the immediate g CO₂ / km of the manufacturer..
“How long until my total emissions, including those from manufacturing and charging a new electric car, are lower than if I just kept driving my existing vehicle?”
To find x and determine the CO₂ payback period, three key variables need to be examined:
- The CO₂ emissions of the existing ICE vehicle being replaced;
- The CO₂ emissions from the production of the new electric vehicle, and;
- The energy source for the electricity used to charge the new car
CO₂ emissions of the vehicle being replaced:
The logic here is quite simple, the more polluting the vehicle being replaced, the faster the payback period as the relative improvement from switching to a BEV is greater.
This creates a significant difference geographically. On average, cars in the US emit around 2.3 times more CO₂ each year than those in Europe, thus making the CO₂ payback period much longer to the east of the Atlantic. This is not simply due to differences in efficiency of the vehicles purchased in each region but also how far they are driven. The average car on the road in the US emits around 220g of CO₂ for each kilometre driven versus 150g/km in Europe,¹ but further compounding the difference is the average annual mileage in the US amounting to nearly 18,500km versus around 12,000km in Europe.²
An often forgotten element of the emissions associated with driving an ICE vehicle are those associated with the production and distribution of petrol/gasoline, known as “Well-to-tank” (WTT) emissions. The exact contribution is very difficult to define (owing to the wide variations in production methods and distribution supply chains even within a single country or state), but the WTT emissions account for around an additional 20% of CO₂ on top of those coming from direct usage of the vehicle (known as “Tank-to-wheel” emissions (TTW)).³
The level of emissions coming from the vehicle being replaced are critical to determining the relative environmental improvement from a new electric car sale. For the manufacturer, however, the car being replaced is of no importance to it achieving its BEV sales targets.
The manufacturer benefits just as much from a consumer trading in a 1 year old Toyota Prius as it does from a 20 year old diesel SUV. Scrappage schemes exist in some countries to try and tackle this issue, but it is one of the key pieces of information that the consumer lacks to make an informed and environmentally considerate purchasing decision.
CO₂ emissions from vehicle production:
Emissions associated with production, as opposed to usage, are also not communicated clearly (if at all) and often overlooked by consumers when making an environmentally conscious switch. Switching to a more environmentally friendly model (whether it’s a car, washing machine or boiler) will only benefit the environment (ignoring the topic of location of emissions) if the lifetime reduction in the emissions from its use is greater than the emissions generated to produce the new model.
There are more than one billion cars in operation on earth, and collectively they contribute to around 11% of global emissions⁴ whilst the annual production of cars (amounting to around 70m cars p.a.) accounts for a further 2%. On average 7.5 tonnes⁵ of CO₂ are generated from manufacturing a single car — equivalent to the amount of carbon that can be sequestered by ten acres of forest.⁶
7.5 tonnes of CO₂ is, on average, the amount of carbon you need to save from switching to a more fuel efficient car to start generating a net benefit for the planet. If the cumulative annual emissions savings versus your old car don’t top this figure, then you’ll only increase your own carbon footprint. Furthermore, the 7.5 tonnes of CO₂ is the overall automotive average and is heavily weighted towards ICE vehicles; BEVs and plug-in hybrids only account for a few percent of total vehicle production currently. The emissions from production of a BEV, however, are around 1.5–2x this mainly because it requires of lot of effort to mine all the materials required for batteries but also run low volume production lines
“The CO₂ emissions in manufacturing an electric vehicle are — from raw material extraction to handover to the customer — roughly twice as high as with a vehicle with a combustion engine. This is because of the difficulty of raw material extraction and the energy-intensive processes in manufacturing batteries. In particular, drying the raw materials, which are applied to a carrier film in liquid form, causes energy consumption to rocket” — VW sustainability report, 2019
The significance of the production emissions should not be underestimated. If adopted in a place that largely uses renewable energy sources, such as Iceland or Norway, then the production emissions account for nearly the entire lifetime emissions of the vehicle, with the remainder coming from factors such as maintenance and end of life recycling or disposal. Even in the average case assumptions modelled below, production emissions still account for around 50–60% of the lifetime emissions of an electric vehicle.
Selecting a BEV with a small carbon footprint in production, can therefore greatly improve the environmental friendliness of the vehicle. Most vehicle manufacturers however do not (or are not able to) report the CO₂ emissions from production of specific vehicle models. Furthermore there is large variation across the global average CO₂ output per vehicle from the world’s largest OEMs. Whilst the average across the top 12 OEMs is 7.5 tonnes per vehicle, this ranges from 1.0–13.9 tonnes across the best and worst performers.
For consumers however, virtually no visibility is provided on the manufacturers’ environmental performance, let alone at an individual vehicle level, and given the significant variation in performance, can have a huge impact on the potential benefits from switching to an electric vehicle.
Energy source for electricity generation:
This factor creates a huge variation in the payback period of an electric vehicle owing to the widely different mixes of energy sources used for electricity generation from one country or state to another. In Norway and Iceland for example, electric vehicles generate only a few grams of carbon for each kilometre driven, since electricity is almost entirely generated from renewable sources (hydro power in both cases). By contrast, in Poland or Estonia in Europe, or Wyoming and West Virginia in the US, an electric vehicle will emit around 150–160g of CO₂ per km due to the near complete reliance on coal as an energy source.⁷ As context the average emissions of a new vehicle sold in 2018 in Europe and the US respectively was 120g/km and 200g/km respectively (excluding WTT emissions).⁸
One consideration here is that the energy mix is improving steadily as more and more renewable sources of energy are developed; over 2012–17 the CO2 intensity of electricity generation has fallen by 2–3% p.a. across both Europe and the US,⁹ driven both by falling CO₂ emissions but also stagnant electricity consumption. As a result of this, the cleanliness of electric vehicles improves each year, reducing the CO₂ payback period
CO₂ payback period — how long does it take?
To draw a conclusion on this question, and fill in the elements not being readily shared with potential consumers, three separate scenarios have been modelled for both the US and European markets to allow for variations in CO₂ output from production and also electricity generation. The high-level differences between the scenarios are:
The results of these scenarios highlight the significant differences in payback period between the US and Europe and illustrate the relative impact of the global environmental benefits that they could deliver. Whilst the automotive manufacturer benefits from the immediate reduction in the average emissions of the vehicles it sells, the improvement in the carbon footprint of the consumer takes several years to materialise.
As shown in the chart above the average case CO₂ payback period for a vehicle in the US is around 3 and a half years, whereas the average case payback in Europe is a little over 8 years. The reason for this significant difference is a combination of two factors; firstly, owing to the cleaner energy mix in Europe the average CO₂ emissions from electricity generation are 19% lower than the US, but more significantly, the average CO₂ emissions of the ICE vehicle being replaced are nearly 50% higher in the US than Europe. This second factor is driven by both the worse fuel efficiency but also the greater distance driven by cars in the US; as a result, this significantly shortens the time it takes in the US to offset the carbon emissions from the production of the BEV and start benefiting from the lower annual CO₂ emissions from driving.
Where the difference is even more remarkable, is when you compare the worst case scenarios in each region. In these cases, the most significant factor is the relatively high CO₂ emissions from charging the electric vehicle owing to the high dependency on coal as a fuel source in each region’s worst performing country / state (Poland or Estonia in Europe, or Wyoming and West Virginia in the US). Despite the high level of CO₂ emissions in Wyoming for example, the CO₂ payback period is just over 6 years, less than the average case within Europe — highlighting how significant the emissions of the vehicle being replaced are. In Europe however, if you were to adopt an electric car in Estonia or Poland, it would take around 20 years before CO₂ payback occurs, essentially completely undermining the switch and something that no automotive manufacturer would wish to readily educate consumers upon.
The implications of these findings highlight the large differences in environmental benefit that switching to an electric vehicle can have from one region to another, as well as the significance of the CO₂ emissions generated during the production of a new vehicle.
To the consumer the electric car is often presented to them as an instant pathway to environmental betterment whereas the reality is that it is one that will take several years to navigate. In the US the CO₂ payback is fast, around 3.5 years, but in Europe the average case payback of a little over 8 years is much less appealing.
Electric car adoption in part depends upon selfless consumers wanting to do their bit for the environment and reduce their carbon footprints. Given the lack of clarity provided to them however, particularly in Poland or Estonia, the purchase will likely be truly selfless since with a 20 year CO₂ payback period, the benefit is unlikely to be achieved until the next owner of the vehicle, or perhaps even the one after that.
Footnotes:
[1] IEA, weighted average of all new vehicle registrations across 2005–17
[4] IEA
[5]CDP. Based on the Scope 1, 2 and 3 emissions from the top 12 global auto OEMs, excluding the indirect emissions from the actual usage of the car
[6] EPA
[8] IEA
[9] IEA
[11] IEA, EEA, weighted average of all new vehicle registrations across 2005–17 +5% to account for vehicles manufactured pre-2005 that are still driving today
[13] Auto. industry global average of 7.4 tonnes per car. CDP. Based on the Scope 1, 2 and 3 emissions from the top 12 global auto OEMs, excluding the indirect emissions from the actual usage of the car
[14] Ev-database.uk; Manufacturer websites
[16] Assumed to be slightly slower than historical average (2012–17), IEA
