Electric avenue or gasoline alley?

28 April 2011
It was a warm, spring Friday afternoon when I received a call from a contact at BMW. He told me they had an electric vehicle prototype and invited me to test drive it. I tried to sound enthusiastic at the prospect of testing some naff plastic city car and gratefully accepted. Only when we agreed a date and time did I ask “what is this car then”? He explained that it was the world’s only prototype all-electric Rolls-Royce Phantom (pictured below). How cool is that? It’s hard to describe the feeling of driving over Westminster Bridge towards the Houses of Parliament in a unique “Roller”. Incredible! Electric Rolls-RoyceHowever, the debate about transport is much more complex than an afternoon jolly in a posh car (thanks BMW!). Personal mobility is seen as a right in the developed world and an aspiration for the developing world. Cleaner and better public transport is part of the answer, but people still demand personal transport. And there’s also the issue of moving vast quantities of goods around the world that needs to be resolved if we are not to face catastrophic climate change. China seems to be putting its considerable might behind the electric car and leapfrogging the internal combustion engine. Beijing and Shanghai are both limiting new car registrations - one by lottery and one by auction - but you can bypass the system if you buy an electric car. Some commentators, myself included, are not convinced. First, the need to generate more electricity in a world where renewable sources are scarce and challenging can only add to the problem. Second, the precious minerals needed to make batteries are just as scarce as oil (and China is buying them up by the bucketload) – so we may replace oil wars with mineral wars in the future – and it’s clear China intends to dominate the mineral age in the same way the US dominated the fossil-fuel age. Third there is the issue of range and practicality. I recently spoke to the technical head of Jaguar and he told me there would be no step-change in battery technology in the foreseeable future. BMW does not disagree, but contends that an electric car is ideal for families that already have one or more cars so they can use another sort of car for longer distances. So the solution from BMW is to buy more cars (sorry BMW!). The final issue is one of cost. These cars are expensive, even with government subsidies, the battery life is relatively unproven and replacement costs can be high. There is no doubt the internal combustion engine will be around for a while and they can be made more efficient and run on alternative fuels. But carbon emissions are not the only problem. A recent report from Defra suggested diesel engines have improved little in air-quality performance in the past 15 years, despite supposedly improving EU standards. Air quality has an immediate impact on health in cities and areas of high population density. Poor fleet and logistics buyers now face a complex dilemma. My advice would be to stick primarily to whole-life cost assumptions and don’t put all your eggs in one basket. There are some very exciting developments on the way. For long distances outside cities, efficiency and CO2 emissions are key, probably using diesel engines, perhaps fuelled by alternative sources. Look out for specialist biofuels grown from shrubs that don’t take up agricultural land. For cities and short journeys, electric vehicles and hybrids may be the answer, but consider low residual values and high long-term maintenance costs. You should also bear in mind other measures such as driver training, maintenance and choice of tyres, all of which can make a big difference and save money. Electric avenue or gasoline alley? It’s too early to say. I’d recommend you hedge your bets and see what the industry comes up with.
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