The ICE-age: A dinosaur on the road to perdition
End of the ICE-age. Start of an electrifying future
Zero Emission Vehicles (ZEV) paving the way to carbon neutrality
[Excerpt from our March 2021 whitepaper]
A huge paradigm shift is taking place now in the automobile industry. The last three years has seen an increasing number of vehicle manufacturers worldwide announcing to only sell zero emission vehicles (ZEV) starting as early as 2030. The pledge from big names in the industry such as Ford of Europe, Jaguar and General Motors signals the end of the internal combustion engine (ICE) - age.
This is in line with the ambitious climate goals agreed at the Paris climate conference (COP21).
Latest developments see not only vehicle manufacturers but mobility provers such as ride-hailing companies resorting to ZEV "self-mandates", committing themselves towards an even faster shift away from conventional ICE vehicles in favor of zero-emission vehicles (BEV/ FCEV).
Bumpy road to carbon neutrality
The journey to achieving carbon neutrality opens the currently established automotive ecosystem to many new stakeholders in the mobility sector. These new stakeholders include energy providers, technology/ electric vehicle start-ups, infrastructure, and connectivity enablers, manufacturing/ design operators, battery suppliers and recycling experts.
This new level of complexity opens roughly three groups of initial "impact areas":
1. Operational issues - how will manufacturers gracefully exit the ICE market while reducing self-inflicted wounds such as declining profit margins, drastic changes to product plans, stranded manufacturing assets among other issues.
2. Business model - how will the light vehicle sector, which has traditionally focused on retail/ dealer networks tackle new vehicle brands and start-ups? This shake up may very well involve the after-market, spare-parts, and service businesses as well.
3. Supply chain - a rapid switch to EVs will inevitably lead to the evaporation of scale economies for ICE vehicle manufacturing activities. What does this entail for supply chains that will see sharp declines in internal combustion engine components?
The above is but just a tip of the iceberg on the road to carbon neutrality. Our full white paper includes the topics below:
- The new frontier: A co-dependency ecosystem/supply-chain
- Operational issues
- Business model
- Supply chain
- Stakeholder turbulence ahead: A storm is brewing
- A perfect storm: Upending global industries
1) What is the Paris Climate Agreement and what was achieved?
It is a framework to support and strengthen the global response to the threat of climate change. The Paris Climate Agreement or more commonly known as The Paris Agreement has commitments from all major emitting countries to cut their climate pollution with a long-term goal to achieve net zero emissions.
The short-term goal of the agreement is to keep global average temperature increases below 2°C above pre-industrial levels in this century; with the aim to limit the increase to 1.5°C
2) What does carbon neutral mean?
Carbon neutral means balancing the amount of carbon emissions by absorbing carbon from the atmosphere in carbon sinks.
Carbon sinks are systems that absorb more carbon than emitted. To date, only natural carbon sinks such as soil, forests and oceans are able to remove carbon from the atmosphere on a scale that can fight global warming.
3) What does it mean to be carbon neutral?
To be carbon neutral means that the carbon dioxide output has a net neutral impact on the environment. Individuals, businesses, and organizations can strive to become carbon neutral by various ways such as using solar panels, electric vehicles to reduce carbon footprint.
This can help to reduce the effects of climate change as greenhouse gasses like carbon dioxide increase global average temperatures resulting in rising sea levels, changing weather patterns and other factors.
4) What is zero emission vehicle (ZEV)?
ZEV is an electric vehicle that runs completely free of carbon dioxide tank-to-wheel. It requires a charging network powered completely by renewable energy.
According to ZEV regulation in California, the below vehicle designs are considered "zero emission" to varying degrees:
- Plug-in hybrid - runs on a combination of conventional gasoline-powered engine with a rechargeable battery
- Battery electric vehicles - runs entirely on a rechargeable battery
- Hydrogen fuel cell vehicles - runs on hydrogen gas powered fuel cells that generate electricity
5) Are electric vehicles zero emission?
Even though electric vehicles have zero tailpipe emissions, there are upstream emissions from battery manufacturing and electricity generation. Get all the latest net-zero business daily news here.
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