The effects of COVID-19 on electromobility

01 May 2020

1 May 2020 Autovista Group senior data journalist Neil King explores the impact of the COVID-19 crisis on electromobility, in the context of reduced pollution and potential scrappage schemes. One of the few positives of the coronavirus (COVID-19) pandemic and the resulting lockdowns around the world is that pollution levels have dramatically reduced. Analysis by Carbon Brief reveals the crisis temporarily cut CO2 emissions in China by 25%, with emissions still below normal more than two months after the country entered lockdown. Similarly, data from member countries of the European Environment Agency (EEA) show how concentrations of nitrogen dioxide (NO2), a pollutant mainly emitted by road transport, have decreased in many European cities where lockdown measures have been implemented. Moreover, Carbon Brief reports that ′the pandemic could cause emissions cuts this year in the region of 2,000 million tonnes of CO2. This tentative estimate is equivalent to around 5.5% of the global total in 2019. As a result, the coronavirus crisis could trigger the largest ever annual fall in CO2 emissions in 2020, more than during any previous economic crisis or period of war.’ However, Carbon Brief warns that ′even this would not come close to bringing the 1.5C global temperature limit within reach. Global emissions would need to fall by some 7.6% every year this decade – nearly 2,800 million tonnes of CO2 in 2020 – in order to limit warming to less than 1.5C above pre-industrial temperatures. To put it another way, atmospheric carbon levels are expected to increase again this year, even if CO2 emissions cuts are greater still. Rising CO2 concentrations – and related global warming – will only stabilise once annual emissions reach net-zero.’ Lower pollution and congestion drive EV uptake? Nevertheless, the lower pollution levels this year may yet inspire more consumers to make the switch to electromobility. The pandemic has meant that increased working from home will not only reduce pollution levels but also congestion, especially in rush hour, along with annual mileage. These developments may help to drive greater uptake of electric vehicles (EVs) but Andreas GeilenbrÜgge, head of valuations and insights at Schwacke, cautions that ′since range anxiety is an irrational fear, I’m convinced that COVID-19 will not change the game.’ Despite the impact of the pandemic, the March new-car registration figures for Germany show healthy year-on-year growth in registrations of hybrid and battery-electric vehicles in March – up by 62% and 56% respectively. GeilenbrÜgge commented, however, that this is ′driven by long delivery times, i.e. vehicles ordered before the crisis, and model-wise, mainly by the VW Golf and Up! and several new models. Private registrations of new EVs were only up 33% in March compared to 2019 and 60% of the EV growth in 2020 is coming from tactical registrations.’ The momentum in the registrations of new EVs in 2020 will be heavily dependent on the availability of attractive models but the crisis may have a significantly lower impact on buyers who can afford the comparatively high acquisition costs of EVs. In a shrinking new-car market, this could lead to even higher increases in their market share. Green scrappage schemes Carmakers are calling on the European Commission’s executive to incentivise vehicle sales as lockdowns cause new-car registration figures to tumble and the economic impact of COVID-19 jeopardises future demand, at least in the short term. At the same time, pressure from campaigners, politicians and investors is mounting to use green investments to help restart growth and deliver on climate targets. The carbon impact will depend on how green the schemes are, which remains to be seen. As a cautionary tale, scrappage schemes introduced across Europe in 2008 and 2009, in the wake of the global financial crisis, stimulated demand in the short term but payback ensued when they were removed. Beyond the short-term impact of COVID-19 and potential incentive schemes on electromobility, the unfortunate truth is that a bounce-back in emissions is expected. The US Energy Information Administration (EIA) forecasts that ′energy-related carbon dioxide (CO2) emissions will decrease by 7.5% in 2020 as the result of the slowing economy and restrictions on business and travel activity related to COVID-19.’ In 2021, the EIA forecasts that energy-related CO2 emissions will increase by 3.6%. The electromobility challenge will certainly persist beyond COVID-19. Autovista Group’s latest thinking, insight, and data on the coronavirus pandemic and its impact on the automotive industry can be found here. Be the first to know when we publish something new – sign up to the Autovista24 Daily Email.