The End of the Internal Combustion Engine, But Just Not Yet

A wave of prospective bans on gasoline and diesel engines seems to be sweeping through Europe and is on the drawing board in China.  The bans announced by France and Britain are decades off but not in Norway or India.  China will probably pick a target far enough off that it will have no near term effects.

Environmentalists are obviously cheering but you have to ask how serious are these prospective bans?  If they are mainly aspirational, they will undoubtedly slip as they confront reality.  If they are serious deadlines, you have to wonder if there has been any serious analysis of the economic impact that a mandated shift to electric vehicles would have?

While some of these bans may reflect deeply held beliefs by ruling elites, it is hard not to conclude that they are driven by politics in the hope that the fervor driving the climate lobby will have dissipated by 2040.  Making commitments for a relatively far off period makes it easier to avoid tough actions now.

Advocates for electric vehicles make claims about falling costs and their being almost competitive with internal combustion vehicles but if that is true why would bans be needed?  If the stated optimism was genuine then advocates should believe that market forces would bring about the transition from gasoline and diesel more efficiently and faster.

In 2016, global auto sales were close to 90 million with EVs and PHEVs were about 1.5million.  Until recently, most forecasts for EVs showed steady but very optimistic growth over the next couple of decades with estimates ranging from one-third to over fifty percent of vehicles sold in 2040. But, the IMF has raised the outlook to an incredible 90%. IMF clearly shows life in an ivory tower and the  wonders of assumptions, equations, and extrapolation!

Auto manufacturers have been playing the EV game because of the effect of subsidies and for branding purposes.  All plan to roll out an increasing number of EV/PHEVs in the coming years with GM stating that it will have 20 all-electric vehicles by 2023 while Volvo plans of manufacture only EV/PHEVs beginning in 2019.  As long as subsidies are in place manufacturers will continue to produce these vehicles and continue to monitor and participate in advancing technology in case there is a breakthrough.  But, there is no evidence that any manufacturer except Volvo is shifting its emphasis from the internal combustion engine and advancing its technology.

After all of the hype and optimism, reality and economics will rule the day.  Electric vehicles cost more to manufacture than internal combustion engine cars, as documented by a comparative analysis by ADL.  While lithium battery costs have been dropping they have not dropped enough to offset higher manufacturing costs of EVs and PHEVsA.  Without a major breakthrough in battery technology, EV/PHEV potential will continue to be limited.  A 2015 article in MIT’s technology Review made this point very clear, “… while countless breakthroughs have been announced over the last decade, time and again these advances have failed to translate into commercial batteries with anything like the promised improvements in cost and energy storage … One difficult thing about developing better batteries is that the technology is still poorly understood. Changing one part of a battery … can produce unforeseen problems, some of which can’t be detected without years of testing”.

And, until that breakthrough takes place, range will be a serious limitation.  There is also the issue of charging.  How much additional power plant capacity will be needed, what will it costs, and how much will it add to the GHGs that EVs avoid?

Hype and hope are not substitutes for needed large scale capital investments and actual advances in technology which cannot be mandated to meet a political time frame.  In the meantime, the world does not face any near term shortage in oil and actual advances in internal combustion engine technology are providing increased efficiency and lower emissions.




Founder and president of Solutions Consulting which focuses on public policy issues, strategic planning, and strategic communications.

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