In our war against global warming, one of the battles whose outcome is under our control is the fight against transport emissions. Even on this front, we need to drastically scale up our efforts as latest measures notwithstanding, transport emissions are set to increase by 84 percent to 2030 (Tomlinson, 2009). While the current response of most governments has been to tighten mileage norms, experts and policy makers agree that automobiles powered by alternative sources of energy are the future. Such a scenario also reduces most nations’ dependence on oil imports, saving precious foreign exchange which can be diverted to other developmental activities.
Among the innumerous solutions that have cropped up, three options have emerged as the most viable:
1) Electric Cars
2) Hydrogen Fuel Cell powered cars
3) Vehicles operating on biofuels
Each one of the options stated above has its own merits and demerits. While Hydrogen fuel-cell shows a lot of promise for the future, development and production costs in addition to issues such as storage and miniaturization pose a stiff barrier to its commonplace adoption. Biofuels derived from corn are already causing a furore due to the alleged diversion of farmland ear marked for food grain production. Our best bet must surely be hybrid vehicles, viz. cars powered by a combination of alternate and conventional fuels.
Automakers were quick to realise the potential of electric and Hybrid Electric Vehicles, and Toyota created the first mass-produced hybrid car, the Prius, back in 1997. Prius has gone on to sell in excess of 1.8 million units worldwide, prompting other major manufacturers to follow suit. Despite this, electric car sales represent an insignificant portion of the total worldwide automobile sales, which was touted to be around 65 million in 2009 alone.
For electric vehicles to replace conventional fuel vehicles in overall sales, they have to overcome what is known as the ‘range anxiety’. Range anxiety is the fear that a vehicle has insufficient range to reach its destination and would thus strand its vehicle’s occupants. As a measure of how important overcoming this issue is for automakers, automotive giant GM has filed to trademark the term, hoping to use it in the promotion of its Chevrolet Volt.
Electric vehicles, as specified earlier, can either be based on electricity or a combination of electricity and conventional fuel. Pure-play electric vehicles, like the Chevrolet Volt, use nickel-based batteries which have a range of around 150 miles, which means that they can’t be used for long drives. As a result, automakers are focusing on developing lithium-ion batteries that can hold more energy and be used over a longer haul.
Role of Policy Makers
Unlike previous generations, when governments played a miniscule role in the evolution of automobiles, governments post economic recession have started playing an increasingly pivotal part in shaping the dynamics of the industry. President Obama’s bail-out package following the recession included tax breaks for automakers that produce high-tech cars, spurring players to get into the development of electric cars. The Japanese government incentivized customers who traded-in their old cars for ones that run on alternative energy.
Incentives and tax-breaks help auto-manufacturers by cutting development costs and creating an initial momentum in their favour. However, if end-customer interest is to be sustained, electric cars need to provide a compelling value proposition that sets them apart from conventional fuel, especially considering the initial costs are likely to be much higher. This cannot be achieved by auto companies alone, and needs a thorough policy framework which encourages research in the field. One of the areas where the government can help with policies and investment is in human resources. Indeed, players in the manufacturing sector cite lack of talent as a key threat for investment in research & development. Thus, it is the job of governments to ensure that a steady stream of human talent is available to this industry.
Apart from a framework, what is also needed is a recharging infrastructure built on the lines of petrol stations. This would go a long way in overcoming users’ range anxiety and setting up a scenario where both Light motor vehicles (like cars) and Heavy motor vehicles (like trucks), can be powered electrically. Only when we achieve such a drastic change in our transport behavior, can we expect a sharp cut down in emission that is required.
Bottom line: Green car castles cannot be built in the sky; they need governments to lay the foundations.
Author: KA Iyer
Karthik is a management grad from Bharathidasan Institute of Management with a background in computer science. He is a marketer who loves searching for insights. He also likes writing on subjects he is passionate about.
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