I like EVs. They’re fast, fun to drive and help improve urban air quality. But the plans to force them on to new car buyers over the next decade have not been thought through. Phasing out vehicles powered by Internal Combustion Engines (ICE) will inflict grave penalties on poorer drivers. At the same time, the environmental merits of EVs are overplayed.

EVs account for about half of all car sales in the UK, France and Germany – most going to company car fleets. Yet, in the UK, EVs still only make up two or three per cent of all cars on the road. Right now, demand vastly outstrips supply. After an EV from VW or Mercedes today? Delivery will have to wait till next year.

Sales of EVs could anyway stall before long. The affluent few with the motivation and means to buy them will soon all have one. Despite talk of cost parity with ICE cars, supply chain crunches in semiconductors, and around the raw materials for batteries, are today making EVs dearer – at just the moment when the cost of living crisis has begun to bite. In May, before inflation took off, a survey of 6,000 people in six developed economies found that 62 per cent couldn’t afford an EV in the near future.

This is no short-term glitch, either. Analysts now estimate that EVs will remain more expensive than ICE cars for at least another decade. That forecast undoes a key assumption behind the UK ban on pure ICE cars that’s due to be enacted in 2030, and the ban on hybrids that’s meant to come in 2035 – that EVs will be the same price, or cheaper, than traditional equivalents.

In 2018, the gilets jaunes in France vigorously opposed President Macron’s environmentally-minded increase in fuel taxes. Four years later, similar protests across the developing world may point to what is to come in developed nations this winter, as energy prices really bite. If mass unrest doesn’t overturn the 2030/35 phase-out of ICE vehicles, many motorists – and white van drivers – will be priced out of four-wheeled personal transport.

For lower-paid workers wanting a new car in the West, the more-or-less mandatory purchase of pricey EVs will come after four decades of falling or flat wage growth. Already, household cutbacks on purchasing food – and cars – explain much of the economic slowdown in the US. Compulsory new EVs will hurt Americans, who rely on cars for their livelihoods and the school run, even harder.

Of course, ICE cars have their environmental defects. But last year, Volvo published a report that compared the environmental impact of its electric XC40 Recharge car with that of its equivalent ICE model. Volvo calculated CO2 emissions over the full lifecycle of the two products: from mining minerals like lithium and cobalt, through driving, to end-of-life disposal. This kind of Life Cycle Analysis (LCA) is as much an art as a science, owing to the number of assumptions made; but before either are driven, the carbon impact of the ICE vehicle was roughly 40 per cent lower than that for the EV.

The ICE XC40 burns fuel throughout its life. But how quickly the Recharge catches up with the ICE in terms of the greenhouse effect depends on how much of the electricity that powers it is free of carbon. If the EV is charged purely on wind, solar or nuclear energy it ‘breaks even’ and starts to have less impact after just 31,000 miles of use. However, if it’s charged using the average mix of electricity sources used worldwide, the Recharge needs to be driven more than 93,000 miles before it beats the ICE version. Note, too, that this global average mix of power sources was calculated before countries such as Germany fired up its coal power stations in the wake of the Kremlin turning the gas taps off.

Many cars in cities are smaller than the XC40, and will run for at least a decade without getting near 93,000 miles on the clock. Put another way, most urban EV runabouts will never beat their ICE counterparts on CO2 emissions.

So why do official policy and polite opinion stigmatise ICE drivers, at the same time as governments give taxpayer-funded incentives and moral praise on relatively well-heeled EV owners?

EVs are the future. But until they become a lot cheaper, trying to accelerate their take-up doesn’t make environmental, social or economic sense. There are technical problems, too: the lack of charging stations, doubts over the availability of battery materials, and worries about the readiness of electricity grids to take the extra load of charging EVs. But my big concern is with the impact on most drivers. Pressing for the adoption of EVs could easily cause yet more division in societies that are already fractured. Too much haste could deprive significant sections of the public – particularly women – of the means to get around.

Many drivers believe that an out-of-touch over-class has imposed an inequitable EV policy without debating its effect on mass living standards. We urgently need an open, informed discussion on the costs, benefits and timeline of the intended phase-out of ICE cars.

In a glaring example of lofty ambitions confronted with grim reality, California first announced a ban on sales of ICE vehicles by 2035, only for the state’s Independent System Operator, CAISO, to ask Californians to ‘avoid using large appliances and charging electric vehicles, and turn off unnecessary lights’.

The world faces severe economic storms. Worse, incompetent long-term planning by governments in North America and Europe has lost them the confidence of millions. A rational EV strategy, at this juncture, would be to build more nuclear reactors as a reliable source of low-carbon electricity and upgrade electricity grids to prepare properly for all the demand for power that is bound to come in future.

These two measures would prevent further impoverishment and give EV manufacturers time to drive down prices – and even develop next-generation batteries that don’t need Lithium.

So, EVs are great, but they – and the infrastructure they need – are not ready yet!

PS

Let me know if you’d like your team to hear the whole talk on which this is based.

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Democratic deficit

Concerns about the lack of public support for planned mobility restrictions were aired on the platform this year. Marvin Rees, Mayor of Bristol, struggled to answer questions around Bristol’s planned Clean Air Zone (CAZ), and how the ban on private diesel vehicles during peak times will regressively affect lower-income drivers, who are more likely to own older diesel cars. He referenced the push-back of commuters against Extinction Rebellion protectors at ‘The Battle of Canning Town’, as a warning to planners who run too far ahead of public consent.

Peter Campbell, the FT’s excellent chair, also pointed out that as most EVs were bought by the well-off, government subsidies for them amounted to the poor funding the rich. This was but one of the tensions between policy, people and profit that surfaced over the day’s event.

Another type of penalisation for owning older cars was demonstrated by Daniel Helldén Vice Mayor of Traffic of Stockholm (who travelled to London by train). In the cause of ‘Vision Zero’ traffic fatalities, Stockholm is introducing geofenced speed restrictions and electric-only operation zones inside the city.

Vehicles without geofencing capability will be excluded from central urban areas.

Londoners waiting for e-scooters to be legalised, would not have been cheered by the words of Michael Hurwitz, Director of Transport Innovation, Transport for London (TfL). He was decidedly lukewarm on prospects. As well as airing the safety and clutter concerns, he also pointed out that they conflict with TfL’s ‘active lifestyle’ goals, as data suggests that e-scooter rides replace a lot of walking trips.

In a throwaway remark towards the end of the summit, Campbell quipped that it was a relief that Blockchain had hardly been mentioned all day. This summed up that the end of the frothy mobility visions of a few years ago was upon us. A new air of realism and acceptance that there is a long slog ahead in terms of investment, cost reduction, learning and behavioural ‘nudging’ – which will increasingly feel like shoves to many citizens.

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The annual FT car summits provide an opportune time to take the pulse of Automotive leaders. The FT’s Peter Campbell framed the situation the industry faces as a perfect storm of challenges. The immediate headaches include a drastic sales slowdown in China, the demise of diesel, trade wars, and Brexit uncertainty. Never mind the strategic questions thrown up by shifts towards electrification, connection, automation, and new ownership models.

Waiting for the sun

There was a general feeling of a revolution delayed at this year’s event. Despite the conference subtitle of ‘Navigating unprecedented change’, one of the subtle differences in tone this year was the conviction that although disruption was definitely coming, it wasn’t going to be as swift as the hype of last year suggested it might be. Last year it was clear that Autonomy had hit the top of the Hype Curve, as companies quietly shelved their target dates to launch Level-5 fully autonomous vehicles.

That’s not to say that activity is flatlining. This year the emphasis was on using advanced driver-assistance systems (ADAS) to make human driving safer. Electric vehicles (EVs) came under more scrutiny and while most still assume them to be the future, the presumption is of relatively slow adoption, with hybrids remaining the interim solution albeit for longer than expected. Some questioned the wisdom of the big bet on EVs. Hugo Spowers, the founder of a hydrogen fuel cell start-up claimed that ‘electric versus hydrogen is not a Betamax versus VHS situation. We need both electric and hydrogen. The optimum choice comes down to vehicle weight and hydrogen refuelling makes much more sense when thinking about millions of cars. It’s delusional to think we can recharge millions of EVs any time soon’.

Many speakers also poured cold water on the shift to vehicle sharing. Yes, more of it will happen, but not in the dramatic ways it has been breathlessly talked about before. Most industry figures were clearly thinking the future of the industry would emerge incrementally and be made up of a diverse range of coexisting solutions.

MaaS delusion?

Andreas Tschiesner from McKinsey reminded a room of auto execs of the difference between their business model and that of Mobility as a Service (MaaS) operators, like Uber. McKinsey has calculated that car brands make 1c per passenger mile (ppm) from the cars they sell, while Uber is aiming for 15c ppm – once they can operate Robocars.

George Arison, Founder of Shift, a used car sales start-up, made a compelling case for the long term future of private car ownership and usage. He made three key points: First, that Europe has the best public transport in the world, yet it also has the highest density of car ownership. Second, in the Bay Area, California, perhaps the global epicentre of ride sharing, car sales increased at twice the rate of population rise between 2014 and 2016. Third, journeys peak drastically at rush hours, so it’s hard to imagine how a MaaS service could deal with such a variance of need, at scale, in a profitable way.

Of course, a used car salesman would say that. But Arison’s view found an echo in the public sector. Michael Hurwitz, Director of Transport Innovation, Transport for London was also sanguine about the threat posed by the new mobility disruptors. ‘Considering the billions being invested in mobility, from AVs to Micro mobility, the economics looks really tough. Public transport is subsidised by the state, the new mobility offerings are being subsidised by VCs and corporations. How and when will the money be made?’.

This scepticism is supported by a recent MIT study that looked behind the ‘hand-waving’ from the likes of Uber. It found that even with robots behind the wheel, ride-hailing will still be more expensive than conventional ownership on a per-mile basis. While labour costs are removed and insurance premiums reduced, the key problem is utilisation – for every mile driven with a passenger, there is another mile with no one in the back seat. Other costs that are overlooked are those associated with running teleoperations, in which human operators intervene to remotely steer taxis out of situations that have confused the robot driver.

Is data the new oil (or garbage)?

Much has been made of the Internet-connected car, and the services and data monetisation it will unlock. As vehicles are plugged into the network, more detailed questions are being asked about the benefits and risks. On a very practical level, a number of speakers mentioned the challenges of automotive companies attracting and retaining software talent, typically in their non-urban locations. Even tech companies in Silicon Valley are apparently having to contend with a data scientist sticking around for an average of only nine months.

Hurwitz was dismissive of big data hype and stressed the value of small amounts of relevant data, such as if more vehicles are skidding or swerving more than usual, which can indicate a situation that needs attention. He was critical about the lack of data sharing between mobility companies and cities – with the honourable exceptions of Ford and Waze. One tangible benefit he did cite, was a collaboration with Waze, where reminders are pushed out to remind drivers to check their fuel levels as they approach the Blackwall tunnel, which has reduced blockages in the tunnel.

Micheline Casey, Global Head of Data, at Ford Smart Mobility, had done the most thinking on the topic in the room. She was frank. ‘The whole industry can do a much better job of communicating to drivers what the value of connectivity to them is,’ she said. Giving examples of how data could improve safety, convenience and cost of ownership. Casey, briefly touched on how vehicles could also be used as sensors for ‘hyper-local’ conditions, like air quality or hail storms, providing aggregated and anonymised data to local services.

When quizzed about privacy policies, she confirmed that Ford will give its customers the option to opt-in and back out of data features and services. Summing up with three questions Ford Smart Mobility continually asked themselves:

1. Can we collect the data and what would we use it for?

2. What’s the value exchange for our customers in return?

3. How do we make it easy for them to opt-out of the data collection?

China has leapfrogged the incumbents in electrification

A recurrent theme of the conference was that complex problems cannot be tackled by one company or sectors. The shift to EVs being a case in point, from how to roll-out charging infrastructure to decarbonising the grid, cross-sector collaboration and coordination is required. There was a grudging acceptance that China had out-manoeuvred the rest of the automotive industry. It made a big bet investment in battery technology in the last decade, is currently in the midst of a large scale roll out of charging infrastructure and is wielding a big legislative ‘stick’ that makes it nigh-on impossible to buy a non-EV in Beijing today. Chinese state planning and investment have put its EV champions in pole position, while Western auto execs and politicians argue about standards and policy.

As I said at the beginning though, this was my take. I would be interested in your thoughts or comments on the state of play.

When Model-Ts started rolling off the Ford’s Highland Park production lines in 1908, there were only around 200,000 cars on the roads in the USA. Few foresaw the spread of suburbia, out-of-town shopping, drive-thru restaurants, working at the car wash and road trips down Route 66. Nor did anyone foresee how economically significant the auto industry would become.

By 1955 USA’s top 10 biggest companies included: General Motors, U.S. Steel, Chrysler, Standard Oil of New Jersey, Amoco, Goodyear and Firestone. Cars helped drive huge change in the mid-20th century, including entirely unexpected knock-on effects such as the fact that 25% of the USA’s agricultural land, which had been used for rearing horses, was then freed up for human food production. 

The consequences of new technologies are hard to predict. When Wall Street bankers were first sighted barking into mobiles the size of breeze blocks, the phones were written off as Yuppie toys. Now 7 in 10 of the world’s population owns a phone, although we spend more time browsing photos, ordering cabs, checking the news or swiping right, than talking on them. Four of the top 10 most highly valued companies in the world are Apple, Alphabet (formerly Google), Facebook and Amazon – all of which earn much of their income via phones in one way or another. 

Mobility as a Service (MaaS)

The impact of the first wave, is already being felt in urban centres around the world, epitomised by Uber’s explosive growth since 2014. Urbanites are increasingly opting to access ride-hailing services like Uber, or car-sharing from the likes of DriveNow and Car2Go, and for longer trips ride-sharing or car-pooling services such as BlaBlaCar in France. Private car usage and ownership in cities is set to fall, as mobility services grow in reach and drive down prices. City authorities are also playing their part, as they introduce inducements to ditching cars. 

This in turn will present the governing authorities of cities with new choices. Gradually drop-off and pick-up areas will replace parking spaces at popular destinations. Those that can afford these services gradually cease to think of cars as general purpose, and begin to select different vehicle types and services for different kinds of trips, from a shared mini-bus for the commute, to a slick sedan for date night. Jobs in car dealerships will most likely fall due to the decline in private sales, while those in car maintenance, washing and valeting will rise – as the cars on the road will be much more heavily used. This wave on its own is relatively low impact compared with what will follow, primarily because it is largely an incremental improvement on traditional taxi services and uses existing vehicles, smartphone platforms and consumer behaviours. The key choice is for cities to decide to what extent they should restrict global players and allow local competitors into the market, using local labour laws as a means control to this.

Electric cars (EVs)

The next wave will see the shift to EVs. Take Tesla as an example. Despite its current high profile, Tesla’s sales currently account for less than one percent of global car sales – although 29% of cars sold in Norway in 2016 were either pure EVs or plug-in hybrids. Global sales growth actually slowed in 2016, but they are likely to pick-up as automobile companies bring more affordable models to the market, and more critically, cities and governments introduce more stringent emissions legislation. 

Autonomous vehicles (AVs)

The first two waves will rock the boat of urban mobility. The third will flip it. Much of the debate about AVs has until now focused on when the technology will be ready, how road regulations will adapt and to what extent road accidents will be eradicated. If we raise our horizons beyond these technical questions and assume they will be resolved over the next 5-10 years or so, we can ask ourselves: what kind of social, urban and economic changes do we want autonomous vehicles to drive?

The most disruptive change is likely to be the plummeting cost of door-to-door transport. As most driverless cars in urban areas will be provided as a service by the likes of Uber, and without a driver to pay, price per mile is likely to drop to $0.50 from $1 to $1.50 per mile. This will challenge the viability of buses and trams on many routes, and is likely to blur the boundaries between shared and public transport. One potential model is that local transport authorities will form partnerships with ride-hailing services. In Florida one authority is currently subsidising Uber rides on routes it does not cover.

This plunge in cost is likely to increase the demand for mobility. One recent study estimated that demand may rise by as much as 30 percent. There are two ways in which city authorities can respond to this. On one hand, they can embrace the potential expansion of their citizens’ mobility, and use smart routing and other means to maximise their road capacity. On the other, they can curtail car usage, through various tactics such as dynamic congestion charging. Whilst the latter of these tactics may seem the more likely in today’s climate, this situation may change. Certainly, it will be a matter for different governments and mayoralties to deal with in their own way.

Throughout the 20th century workers were able to live further away from work as transport became faster, although two hours each way tends to be the maximum most will put up with. But what if people could begin and end their working day productively on their door-to-door commute? How much faster could longer distance commutes get, if AVs can use high-speed lanes, where they platoon in close formation? How will the perceptions of sitting in traffic change, if that time can be used for business or pleasure? Would this encourage some to live even further away from their workplaces than today? 

This isn’t a fanciful idea. A recent study by Ford found that 39% of bus, train and taxi users choose that mode because they want to multitask en route. People will find many other ways to pass the time while being robo-chauffeured, from sleeping and VR gaming, to more furtive, private pastimes – either way switchable tinted glass is likely to be a popular feature…

The implications for cities is significant as well. Most driverless vehicles will be more utililised than typical manual cars which typically spend 95% of their time parked up. As the need for parking space and potentially bus lanes tails off, city authorities will find new public space to play with. To what extent will increasing road capacity figure in city plans? How much space will be needed for charging and valeting cars? These are just some of the questions that will need to be addressed. 

Other more contentious decisions that policy makers will need to grapple with include policy decisions relating to manually driven cars. Will they for example be banned on public roads? How will safety issues be reconciled with those of personal freedom. Northern European nations are likely to emphasise the former while Americans surely are more likely to privilege personal liberty over pure safety arguments. 

Another dilemma will hinge around the amount of data collected by AVs. It is estimated that the camera, radars and other sensors of a typical car will gather 4,000 GB of data per day relating to road, traffic and weather conditions as well as the behaviour of the car’s passengers. While not all of this will be uploaded, who should have access to the data when it is, and more pointedly do they have the right to monetise it? Should certain types of data such as road conditions be made open source to aid safety and traffic flows? From a privacy perspective, there is also the much-flagged challenge of cyber security, high standards for which will be a prerequisite.

Finally, what are the vehicle design choices ahead? Mobility providers will probably require a wider diversity of vehicle types: from narrow single-seaters to mini-buses. These will be designed for heavy usage and easy cleaning, rather than the identity signalling that drives the design of privately owned cars. As there won’t be a steering wheel and only a minimal instrument panel, the interface with passengers is likely to be simplified, although AVs may be required to signal their intentions to pedestrians in new ways. With no need for front seats to face forwards, designers will have more freedom with the internal configurations of cabins. Eventually safety regulations will be relaxed, which will free up space as there will be less need for crumple zones and airbags. 

These are just some of the opportunities, questions, and choices that are coming into view on the road ahead. But as the futurist and author Carl Sagan once said: ‘It was easy to predict mass car ownership, but hard to predict Walmart’. Following all the disruptive shifts throughout history, the knock-on effects and unintended consequences that lie over the horizon are hard to foresee. As the impacts are likely to be as major as the adoption of cars in the mid-20th century, the more we widen the discussion now, the better placed we’ll be eventually.

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The future of transport looks bright following two recent announcements last week. First, mayor Boris Johnson unveiled a sleek new design for London Underground trains, which will be faster, cooler, driverless and wifi-enabled… in 2025. Meanwhile, in California, Elon Musk – inheritor of Steve Jobs’ mantle as hero of Silicon Valley – yanked back a satin sheet to reveal three new Tesla models of electric car; one does 0-60 in 3.2 seconds, as well as driving itself into the garage and automating much of motorway driving.

The milestones of mobility history are marked by the coverage of greater distances in faster, cheaper, safer and more convenient ways. Mass car ownership, cheap flights and high-speed trains have broadened our minds and life experience more than any previous generation. So what are the prospects for transport over the next 20 years? Will innovation continue to drive us into a zippier future? I believe it will, but with a major caveat: even as exciting innovations spark progress, there is a widening gap between mass aspirations for more speed and comfort, and the agenda of transport planners who are steering with their foot on the brakes. 

This is particularly the case with urban transport. Some planning projects are truly ambitious, such as Crossrail, which will whisk Londoners from Heathrow to Canary Wharf in 40 minutes by 2018. But the future also holds plenty of attempts to constrain speed and convenience, nudging us into bike sharing or shoving us into congestion charging, pedestrianisation and rationed parking. (Hamburg, for example, plans to banish cars from 40% of its centre by 2032.)

What these plans don’t take into account is the aspirational desire for fast, cheap, convenient transport. It’s often said Generation Y has fallen out of love with car ownership – a perception that has pleased the planners and worried car companies. But while the recession and student debt may have delayed young peoples’ car-buying plans, all of our research confirms that the young still aspire to their own wheels – and the freedom and individuality a car still represents. 

When the Estonian capital of Tallinn recently became the largest city to give its residents free access to public transport, this European centre for nightlife – with a huge young population – saw only a 1% rise in usage, mostly from walkers, not drivers, making the switch. Drivers are attached to the comfort and convenience of their transport, a fact planners often dismiss.

Innovation will happen more at individual level – vehicles and smartphones – rather than much more costly large-scale civic planning and infrastructure. 

What Won’t Happen

Two darlings of the urban visionaries are car sharing and electric vehicles (EVs). While both will find their niches, neither will mainstream as the planners hope. Car clubs like ZipCar promise car access over the hassle of ownership and have been promoted by many city authorities. However, the Mercedes-backed Car2go recently withdrew from a pilot in the UK in the face of public disinterest – many prefer the convenience of their own car or taxi services like Uber. 

Similarly EVs from the likes of Tesla and BMWi will remain niche lifestyle accessories for the rich due to their expense, charging hassle and flat battery concerns. City authorities will create some demand for EVs by prioritising them, from insisting new taxis are EVs to exemption from congestion charges. And as EVs are increasingly criticised for reasons such as the emissions created by electricity production, even the eco credentials that are their biggest selling point are under threat. Cars with increasingly clean and efficient petrol or diesel engines will rule the roads for decades to come.

What Will Happen

Two developments that will have an impact are driverless taxis and mobility apps for smartphones. Google has attracted a lot of attention with its self-driving car, but many other companies are just as advanced in their testing, with many of the latest road models already offering autonomous features such as adaptive cruise control and lane changing. While there are technical and legislative barriers to overcome, fully driverless cars are likely to be on the road in the next 10-15 years. Initially they will be expensive to own; more immediately, driverless taxis may be cheaper than minicabs, and more comfortable and sociable as seats can face each other, with no need for a driver’s seat.

Seamlessly jumping between different modes of transport has long been the stuff of transport visions. While piecemeal progress has been made through initiatives such as London Oyster Card, physically joining the dots between cars, trains, buses and planes requires more serious investment. The next wave of this innovation will happen on our phones. Apps like Citymapper, Uber and Hailo are already must-haves for urbanistas, and Helsinki has announced that it plans to roll out a ‘mobility of demand’ system by 2025, which will let Finns plan and pay for fully integrated journeys on their phone. The system will knit everything from driverless cars and mini buses to shared bikes and ferries into a ‘mesh of mobility’.

What Could Happen

To tackle congestion in cities like London, we need to not just make more use of existing roads by, for example, pruning back the number of bus lanes and allowing all types of taxis to use the ones that remain. More critically, we must invest in underground motorways, ring roads and car parks. How about an outer circle tube line too – oh, and a new airport?

Generally, however, innovation in transport will move forward in areas governed by the private sector. Vehicles will continue to become more connected, through added wifi on planes, trains, and automobile. They will become more and more automated, as in driverless cars and trains. And we will increasingly manage our journeys through our smartphones – whether that’s planning and paying for transport options, or controlling our own vehicles, such as the new Tesla cars, which allow owners to locate, warm up, unlock and start the car from their phones. 

It’s certainly progress. But for generations that have grown up in the super-sonic age and beyond, it can all sound positively pedestrian.