- PHEVs cannot achieve gigaton scale by 2020; every new car starting in 2010 would have to be a PHEV to meet the gigaton goal by 2020, making this pathway all but impossible.
- An aggressive scale-up to 5 million PHEVs would create more than 204 thousand jobs in the battery industry, for an investment of $1.9 trillion.
- Innovations that reduce the cost of batteries and of vehicle retrofits would have a major impact on this pathway, as would business models to finance upfront costs of vehicles.
- The vehicle sector in general is by far the most capital-intensive sector of those examined in this report; it is also a source of major job creation.
A potential strategy for a transportation sector gigaton emissions reduction would involve a major national and international program with four key initiatives: 1) rapidly introduce electric-drive vehicles (EDVs) to global automobile markets, 2) leverage heavy investments in EDV battery production with government support, 3) improve the fuel economy of all new vehicles as rapidly as possible, and 4) accelerate the retirement (or possibly electric-conversion) of the least-efficient older vehicles. The most promising focus is the light-duty vehicle (LDV) sector, which is responsible for a large percentage of transportation emissions, but efforts in the medium and heavy-duty vehicle sectors could also yield significant emission savings. The synergy between reducing carbon dioxide equivalent (CO2e) emitted by electricity generation and increasing the numbers of EDVs is also important for lowering emissions because EDVs recharge by plugging in to the electricity grid.
The magnitude of the required shift in the types of vehicles on the road is clear in a recent analysis for the International Energy Agency (IEA), which estimates that if new LDVs were immediately introduced worldwide that were 30% more efficient than current vehicles, the CO2e reductions by 2020 compared to a BAU scenario would be about 500 megatons, or half of what is required to meet the gigaton goal. Thus, achieving a full gigaton reduction would require introduction of even more efficient vehicles, such as plug-in hybrid electric vehicles (PHEVs) or fuel-cell vehicles (FCVs), and/or dramatically altering the motor vehicle fleet by accelerated scrapping of existing vehicles and increased introduction of more efficient new vehicles. To do this, a large amount of money would have to be provided to aid consumers in buying new efficient vehicles and scrapping their existing less-efficient vehicles.
To meet the gigaton goal with a strategy based on PHEVs alone, more than 350 million PHEVs would need to be in service globally by 2020, with more than 100 million in the U.S. This is roughly the total number of new LDVs expected to be added to the global fleet in the next 10 years, implying that every new LDV worldwide would need to be a PHEV. This number is not possible based on any reasonable vehicle introduction and ramp-up strategy. For comparison, the Obama Administration has proposed a total of 1 million PHEVs in the U.S. by 2015.
Even though the gigaton target appears unattainable by 2020 with current PHEV technology, innovation and carbon reduction in the transport sector are critically important, and major reductions can be made in the short term, laying the groundwork for the bigger reductions that will be needed in the 2030 to 2050 time frame. Efforts to dramatically reduce emissions from the transportation sector will require a series of interwoven and sequential steps, related to developing supply chains for improved vehicle components (such as electric motors, power electronics, and advanced batteries), integrating EDVs with utility grids in ways that minimize grid impacts, and developing other systems and infrastructure to enable cleaner vehicles, such as additional charging locations at workplaces and shopping centers. This will all take many years to develop fully, meaning that efforts that begin immediately will pay dividends for years and decades to come. Another fundamental issue that should be addressed is reducing the number of vehicle miles traveled (VMT), for example by encouraging development of mass transit systems, telecommuting, and non-motorized travel, but few experts believe that this could form the core of a gigaton-magnitude strategy by 2020. Improvements in LDV technology are the best hope for achieving the majority of transportation-related emissions reductions that could be expected by that time.
It is important to note that emissions from EDVs are highly dependent on the source of electricity for recharging vehicle batteries and that the lowest carbon emissions are possible from EDVs that are powered with electricity or hydrogen from renewable sources. By comparison, biofuel vehicles can have highly variable carbon impacts depending on the feedstock and fuel. More efficient conventional vehicles, including those powered by compressed natural gas, can also have significant carbon reduction potential though less than for EDVs and biofuels.
Although achieving gigaton scale with PHEVs by 2020 is infeasible, it worth noting that the aggressive PHEV market strategy above would cost about $1.9 billion and create roughly 16,000 jobs in battery manufacturing and vehicle construction.