Can Electric Cars Really Save Us? Startling Insights Revealed

In December 2021, I penned a column addressing the same question. The root of the matter was the necessity to save the earth’s lifeforms by breaking away from the religion of industrial revolution and productivity. The plea was not to judge everything from a food perspective. At that time, the metaverse was at the center of discussion.

In a column with the same title in December 2022, I mentioned the gap between the legitimacy and reality of electric vehicles. The gist was a skeptical thought that Putin, Biden, and Xi Jinping are blocking the path to carbon neutrality for their countries’ benefit.

Now, we are in an era where GPT-3 sucks up all the issues. As the sales growth of electric vehicles slows down, opposing opinions are gaining ground again. However, South Korea’s atmosphere towards electric vehicles goes against the global trend. They analyze and forecast, mistaking Korea’s situation for the world’s. The sales of battery electric vehicles in major global markets in the third quarter of 2023 increased significantly, excluding Korea. The path is long and urgent, but the reality is not easy. We will look at the current situation and controversies surrounding electric vehicles.

1. Significant Growth in Electric Vehicle Sales in Major Markets

In the third quarter of 2023, battery electric vehicle (BEV) sales in the South Korean market saw a 28% decrease compared to the same period in the previous year. This decline has led to a pessimistic view of the future of electric vehicles in South Korea, which mistakenly assumes that the country should follow global standards. The fluctuating outlook on BEV demand in South Korea can be attributed to the country’s unique social characteristics.

During the third quarter of 2023, BEV sales in major global markets, except South Korea, grew. The five largest European markets, including France, Germany, Italy, Spain, and the UK, witnessed a 49% increase in BEV sales and an annual growth rate of 47%. Germany saw a 59% increase, the UK 42%, France 40%, and Spain 57%. The Netherlands and Sweden also experienced significant growth, with increases of 68% and 56%, respectively. Germany had a market share of 16%, while the UK and France had 16%, and Spain had 6%. Norway led the way with an 83% increase.

Despite a sluggish performance by GM and Ford, the United States also experienced a 62% increase in BEV sales during the same period. In contrast, the overall growth rate for new car sales was only 17%. Currently, BEVs hold a market share of 7%, more than three times the 2% market share of two years ago. It’s worth noting that this data differs slightly from Cox Automotive’s 49.8% growth and 7.9% market share. The only data that seems less accurate is from the Chinese market.

China recorded a 16% increase, outperforming the overall growth rate for new car sales, which was 6%. However, this figure represents a significant slowdown compared to the 172% and 85% growth rates in 2021 and 2022, respectively. The slowdown in growth is attributed to China’s economic deceleration and increased interest in plug-in hybrid electric vehicles. The discontinuation of subsidies in August of this year also played a role. In August, the market share of BEVs in China reached 26%, while the market share for plug-in hybrid electric vehicles, including rechargeable EVs, reached 39%. It is projected to reach 40% for the entire year. China dominates the global market share for electric vehicles, accounting for 60% of the market. This led to concerns about market dominance.

Japan saw a 42% increase, but its market share remains below 2%. Japan maintains a dominant market share of 54% in hybrids.

2. The Electric Vehicle Era Supported by Energy Transition

An energy transformation must underpin the transition to electric vehicles (EVs), driving the recent increase in EV sales in China, Europe, and the United States.

The latest edition of the IEA’s annual report, Renewables 2022, projects that the global renewable power capacity will increase by 2,400 GW between 2022 and 2027. This is equivalent to the entire electricity capacity of China today.

This enormous projected growth is 30% higher than predicted just one year ago. This demonstrates how quickly governments have added additional policy weight to renewable energy. The report states that renewable energy will account for over 90% of the global electricity expansion in the next five years. It is projected to become the world’s largest power source, surpassing coal by early 2025.

Energy think tank Ember recently released data indicating that global renewable energy capacity will reach 7.3 TW by 2030, doubling the 3.4 TW capacity in 2022. Moreover, many countries have already exceeded their national targets, and there is greater ambition to triple global renewable energy capacity. Ember expects that over 75% of this renewable energy will come from solar and wind sources.

Europe already surpassed fossil fuels in terms of the share of renewable energy in its power generation in 2020. Major countries like Germany, the UK, and Spain exceeded a 40% share of renewables in 2020. As of 2022, Germany and many others have broken the 45% mark.

Germany, in particular, has set an ambitious goal of reaching 80% renewable energy by 2030, which has accelerated due to the Russia-Ukraine conflict. They are aiming to reduce its dependence on Russian oil and natural gas. Transitioning to renewable energy and electric vehicles from an energy security perspective has become inevitable in addressing environmental issues.

Of course, addressing China’s dominance in the solar power equipment supply chain, which is expected to account for 80%, presents another dimension of the challenge.

3. Debate Continues Over Battery Electric Vehicles and Hybrid Electric Vehicles

Debate over the energy efficiency of electric vehicles (EVs) persists. In response to these discussions, the Environmental Protection Agency (EPA) has introduced a measure called MPGe (Miles Per Gallon of Gasoline Equivalent) to assess the efficiency of EVs. It calculates the amount of electric energy required to travel a certain distance, equivalent to the energy in one gallon of gasoline, thus allowing for a comparison of EV efficiency to that of traditional gasoline vehicles.

Currently, if we assume that the fuel efficiency of a conventional internal combustion engine (ICE) vehicle is 25 miles per gallon (mpg), a hybrid electric vehicle (HEV) achieves an efficiency of 30 MPGe. In contrast, a battery electric vehicle (BEV) reaches 125 MPGe. ICE vehicles use only about 40% of their energy, wasting over 60% in heat loss. In contrast, EVs utilize nearly 100% of the energy they receive, making their efficiency more than 500% higher than that of ICE vehicles, not to mention the virtually nonexistent air pollution.

Critics of electric vehicles often point out the environmental impact of their energy production. However, it has been argued that this impact is relatively minimal, as surplus electricity that cannot be stored is often utilized for charging during off-peak hours.

A study by the research and business intelligence company Rystad Energy, published last October, found that battery electric vehicles contribute about half the amount of carbon dioxide equivalent (CO2e) emissions over their entire lifespan compared to diesel or gasoline vehicles, regardless of the country in which they are operated. Even in countries where fossil fuels dominate the electricity grid, BEVs emit less CO2e during their lifecycle than most internal combustion engine vehicles. Notably, about 90% of emissions associated with ICE vehicles come from fossil fuel extraction, refinement, and combustion.

In contrast, Japanese automakers like Toyota argue that hybrid electric vehicles are more favorable regarding CO2 emissions when considering a life cycle assessment (LCA), including existing vehicles. However, the effect may differ in the long term when powered by renewable energy. Therefore, interpreting these results may vary based on the roadmap taken. Even within Japan, Japanese automakers are criticized for setting lax and unimpressive CO2 reduction targets.

Toyota claims that 240,000 hybrid electric vehicles provide the exact CO2 reduction effect as approximately 72,000 battery electric vehicles, using the same amount of batteries as required for just 3,500 BEVs. This means that the batteries used for 3,500 BEVs achieved a CO2 reduction effect equivalent to 72,000 vehicles.

However, critics argue that this analysis does not consider the carbon emissions from the power grid. While BEVs produce no emissions during operation when charged with renewable energy, vehicles like the Toyota RAV4 Hybrid emit over 22 tons of greenhouse gases during their estimated 200,000-kilometer lifetime.

The debate over CO2 reduction continues. Europe has been strengthening CO2 regulations since the 20th century, and countries like China, which are fostering the electric vehicle industry on a national level due to societal and environmental factors, are focusing heavily on CO2 reduction. Even in the United States, where the transition has not accelerated as much due to social and ecological circumstances, CO2 reduction remains a top priority.

4. Urgent Need for Rapid Reduction of CO2 Emissions from Existing 1.5 Billion Vehicles

In addition to new vehicles, there is a pressing need to research CO2 emissions from already registered vehicles. Currently, there are approximately 1.53 billion registered vehicles worldwide. Among these, one-third, around 500 million, are concentrated in the G7 countries. Assuming an average vehicle lifespan of about 15 years, replacing all existing vehicles with new ones by 2030 is impossible. Even if many new vehicles transition to battery electric vehicles (BEVs), achieving the emissions reduction targets would be unattainable. Furthermore, even if all electricity comes from renewable sources, research suggests that only a 60% reduction in emissions is possible in new vehicles, leaving about a 32% reduction for the entire vehicle population.

This is why alternative fuels such as synthetic e-fuels (synthetic fuels derived from biomass and captured carbon dioxide) and biofuels, blended with gasoline or diesel, are gaining traction. Due to these considerations, Germany had opposed the European Union’s plan to ban the sale of internal combustion engine (ICE) vehicles by 2035. Instead, Germany is advocating a ban on selling ICE-only vehicles starting from 2030. Such a move could also enhance the efficiency of hybrid electric vehicles and plug-in hybrid electric vehicles.

The urgency to reduce CO2 emissions by 48% by 2030 compared to 2019 is mounting. If we fail to achieve this target, global average temperatures could rise beyond 1.5°C, leading to a situation where humanity faces inevitable catastrophe. In such a scenario, there might be no room for producing new products, rendering transitioning to electric vehicles meaningless.

Therefore, rather than relying solely on reducing CO2 emissions from new cars, there is a growing argument for enforcing regulations with binding targets and significantly strengthening annual reductions. Currently, no country is implementing CO2 regulations with such force. Europe has set a yearly target of 8.5% as part of the Fit for 55 initiative, while Japan has a 3.5% target. The United States, starting in 2026, will have a 10% target (previously 5.5%).

Under current standards, automakers can pay fines if they cannot meet emissions standards. However, stricter regulations should mean that they cannot sell the vehicles if they cannot meet the standards. This is a matter of life and death for manufacturers. It is the role of nations to impose stringent regulations, urging automakers to make substantial efforts to reduce CO2 emissions. Therefore, while transitioning to electric vehicles is crucial, exploring all possible means to reduce carbon dioxide emissions is equally important. This includes finding ways to introduce carbon-neutral fuels into existing internal combustion engine vehicles, which requires action from the automotive industry and governments.

5. Lackluster Responses to IPCC’s Goals in Many Countries

Every machine and device depends on energy, be it electricity or fuel, to function. Most of this energy comes from fossil fuels emitting carbon dioxide (CO2). To significantly reduce CO2 emissions, there must be a transition from conventional energy sources to renewable energy. In addition, some are increasingly considering using hydrogen and proven carbon-neutral synthetic fuels within the realm of possibility.

Of all the greenhouse gases contributing to global warming, CO2 emissions from the power sector, including power plants, account for approximately 40%. The transportation sector, including automobiles and airplanes, contributes around 22%, and the steel manufacturing process, mainly through blast furnaces, accounts for about 15%, making up three-quarters of total emissions. Among these, emissions from automobiles constitute roughly 18%.

The Intergovernmental Panel on Climate Change (IPCC) has set specific goals in its 6th report to limit the average rise in global temperature since the Industrial Revolution to below 1.5 degrees Celsius (°C). Considering that we have already experienced a 1.2°C increase, a more vigorous effort is needed. The IPCC emphasizes the need to reduce CO2 emissions by 48% by 2030 compared to 2019, 65% by 2035, and 80% by 2040, aiming for carbon neutrality by 2050.

The critical point to note is that if we fail to achieve the 2030 goals, the global average temperature could surpass 1.5°C, triggering a chain of climate crises that may become uncontrollable by human efforts. With only seven years left until 2030, achieving the 48% emissions reduction target is no easy task. Unfortunately, at this point, it’s challenging to assert that governments or even automobile companies are taking decisive actions toward achieving these goals.

Nonetheless, automobile companies are pursuing different strategies based on their technological capabilities and financial conditions. While these decisions might appear to be a matter of choice for now, accurate data from national authorities that grant approvals, as was the case during the diesel era, is necessary.

What is clear is that decarbonization policies must be implemented not only in the power sector but across industries, including the automotive industry. This is the situation in many countries worldwide.

The surge in battery electric vehicles (BEVs) following the 2015 Volkswagen scandal is not a panacea for achieving carbon neutrality. Despite the substantial increase in the share of renewable energy generation, reaching the 2030 target remains realistically challenging.

Above all, BEVs have many challenges, including their weight, high cost, limited range, insufficient charging infrastructure, long charging times, battery degradation, and increased insurance premiums. It’s also doubtful whether BEV sales will continue to rise without government subsidies. Nevertheless, it’s crucial to reflect on the purpose of these efforts and work towards their improvement and development.

6. Perception Gap and Environmental Challenges: The Road to a Greener Future

In different regions, the transition in perception between experts and consumers proves to be a significant hurdle. Meanwhile, the UK-based auditing firm Canalys predicts that the Indian automotive industry is gearing up for a major leap in the electric vehicle (EV) market in the second half of 2020. Many automobile companies are adjusting their strategies to the Indian government’s target to replace 30% of all vehicles with electric ones. While there is debate about whether India can match China’s market explosion potential, one thing is sure: the domestic market in India is expanding rapidly, offering another growth opportunity.

However, one must not judge everything solely based on third-quarter results. Nevertheless, differences in perception are beginning to manifest as differences in the outlook for the future. In South Korea, some even argue that internal combustion engine (ICE) vehicles will consistently outperform electric ones. This perspective is shared by those who have evaluated and reviewed ICE vehicles extensively. Their reasoning suggests Europeans might effortlessly transition to renewable energy and electric cars.

Although not on the same scale as the shift from horse-drawn carriages to ICE vehicles, this transformation brings strong resistance to change. On the other hand, those who have experienced driving electric vehicles believe there’s no turning back to ICE cars. Some even deny facts about global warming that the Intergovernmental Panel on Climate Change (IPCC) has verified over the past decade.

It’s all about differences in perception. We lack introspection about what truly matters to us right now, primarily due to a lack of urgency regarding climate catastrophe. Additionally, the unrestricted use of platforms like YouTube plays a role. It’s not the technology itself that’s the issue but how users exploit it. South Korea has garnered a notorious reputation as a climate villain, and recently, it has backtracked on its 2030 renewable energy generation target, reducing it from 30.5% to around 20%.

As a result, manufacturers are alarmed. Their global standing as export-oriented countries is dwindling significantly due to the environmental barrier represented by RE100. To counter this situation, Hyundai Motor Group and Samsung Electronics are constructing factories in the United States, backed by their financial strength. However, even this move could become futile depending on geopolitical conditions.

Climate catastrophe is no longer someone else’s problem. I reiterate the severity of climate change, which I mentioned in a previous column. In August 2022, Europe experienced its worst drought in 500 years, accompanied by temperatures exceeding 40 Degree Celcius (104 degrees Fahrenheit), resulting in over 20,000 deaths. Italy suffered a 40% reduction in hydroelectric power production due to the drought, and Norway recorded its lowest dam levels in 25 years, posing an emergency for hydroelectric power generation. Hydroelectric power contributes to one-sixth of global electricity production. In Germany, reduced river levels prevented the transportation of coal and oil, leading to a decline in thermal power generation.

France faced cooling water shortages at nuclear power plants and rising water temperatures. This caused about half of its 56 nuclear plants to shut down. Solar power was ineffective during the scorching heat wave exceeding 104 degrees Fahrenheit. Although intermittent, renewable energy sources currently account for nearly 50% of Europe’s major countries’ energy mix. Germany aims to achieve 100% renewable energy by 2035. In the United States, renewable energy now surpasses fossil fuel generation, with solar and wind power sources rapidly expanding.

Human greed obstructs carbon neutrality, as individuals prioritize short-term gains over the future of the next generation. Can humanity achieve carbon neutrality through efforts like transitioning to electric vehicles? Can we all unite to avert climate catastrophe? Is growing skepticism merely a personal perspective?

By. Chae Young Seok