Green Transportation – Informed Comment https://www.juancole.com Thoughts on the Middle East, History and Religion Mon, 23 Oct 2023 04:24:50 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.11 If Gaza is a Conflict over Oil Money investments, Norway points to a Near Future where Petroleum is Worthless https://www.juancole.com/2023/10/investments-petroleum-worthless.html Sun, 22 Oct 2023 05:20:26 +0000 https://www.juancole.com/?p=214969 Ann Arbor (Informed Comment) – The Biden administration has concluded that the horrific Hamas attacks on Israel of October 7 and after aimed at derailing the normalization negotiations between Saudi Arabia and Israel. But why should this issue be so pressing as to cause a war? Saudi Arabia is the world’s swing petroleum exporter. The US and Russia produce as much or more petroleum daily as Saudi Arabia. But they consume most of it domestically. Saudi Arabia exports most of its petroleum, because it has a relatively small population.

Saudi oil riches make it an ideal investor in Israeli startups, not to mention that Israeli oil supplies are undependable and it sure would be nice to be able to make deals for Saudi petroleum. Saudi Arabia’s lack of diplomatic relations with Israel stand in the way of all the money to be made by the two countries.

The normalization process, however, promised to sideline the 5 million stateless Palestinians under Israeli occupation. There was a danger that Israelis would benefit from Saudi oil money far more than the Palestinians. Not to mention that Israel has Gaza under an economic blockade that makes it one of the poorer places in the world — so the Israelis would get rich off Arab capital while continuing to keep 70% of Palestinian youths in Gaza unemployed.

If these considerations do lie in part behind the Hamas decision to start this conflict, the only good news is that oil won’t be worth much in only a decade or two, making a Saudi-Israeli pairing far less lucrative, and far less worth fighting over.

Norway has emerged as a laboratory of the future when it comes to the electrification of transport. It has the highest rate of EV purchases in the world, and the capital of Oslo plans to ban gasoline cars from its downtown.

The second-best seller among EVs in Norway, Volkswagen, whose ID.4 is popular there, has decided to stop selling gasoline vehicles in Norway as of December.

Ingvild Kilen Rørholt of Foundation Zero is quoted by E24 as saying that Volkswagen’s decision is entirely logical, given Norway’s climate targets and energy policy.

Some 90% of new car registrations in Norway are now plug-in vehicles. Of those, the vast majority are battery-electric vehicles (BEVs), while 6% are plug-in hybrids that use gasoline when the battery runs down.

Of course, it takes many years to replace the existing stock of vehicles, so of the total number of passenger cars on the road in Norway, about 20% are now electric vehicles.

By 2025, the government has decreed that only electric vehicles will be available for sale.

Jameson Dow at Elektrek points out that the country’s national statistics show a huge 9% decline in gasoline purchases for September year over year. He argues that gasoline purchases in Norway have shown a long decline, which may be accelerating. He says that as quickly as US coal sales are cratering, Norway’s gasoline sales are declining twice as fast.

The International Energy Agency has predicted that this year or next will see peak oil in China. That is, the country will start purchasing less and less gasoline every year from here on in. Norway, which of course is a much smaller country, probably had reached peak oil even earlier.

Obviously, as more countries see EVs hog new car sales market share, gasoline and diesel purchases will begin falling rapidly. Dow argues that many big oil companies may go bankrupt as a result.

What he doesn’t say is that we are likely to see a vast geopolitical shift of power away from the Gulf oil states (Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, and Oman) toward solar and wind energy producers such as Morocco. This shift will also have a profound impact on Israel, which has bet on fossil gas and has done little toward electrified transport. It could be left behind by the greening of the Middle East.

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Meeting Union Demands would be a Win-Win for Automakers https://www.juancole.com/2023/09/meeting-demands-automakers.html Mon, 25 Sep 2023 04:04:52 +0000 https://www.juancole.com/?p=214514

But with corporations insistent on squeezing more profits no matter the cost, strikes are inevitable — and necessary.

 
 
Sonali Kolhatkar

Sonali Kolhatkar is the host of “Rising Up With Sonali,” a television and radio show on Free Speech TV and Pacifica stations. This commentary was produced by the Economy for All project at the Independent Media Institute and adapted for syndication by OtherWords.org.

Otherwords.org

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Selling like Hotcakes: 1 mn EVs sold in US during Past Year — which is Why UAW Workers deserve Green New Deal https://www.juancole.com/2023/09/selling-hotcakes-deserve.html Sun, 24 Sep 2023 05:23:22 +0000 https://www.juancole.com/?p=214501 Ann Arbor (Informed Comment) – A million purely battery-electric vehicles have been sold in the US during the past year, according to David Reichmuth at the Union of Concerned Scientists.

Tom Randall at Bloomberg notes that it took 10 years for the first million EVs to be sold in the US, and it took two years for the second million to be driven off the lot. Now we’re selling a million a year.

And in just the first six months of 2023, Reichmuth says, more than 670,000 electric vehicles were sold, 80% of them battery-only. So the pace seems to be quickening further.

UCS sees high gasoline prices as a driver for the increased consumer purchases, along with the proliferation of models so that consumers have more choice. I’d add three further factors: President Biden’s Inflation Reduction Act offers $7500 in federal tax credits to buyers of certain new models of electric cars, and $4000 in tax credits for buyers of select used EVs. Some EVs, like the Chevy Bolt (which has been resurrected by Chevy) are now affordable, especially with the tax credit, which could bring the price under $20,000. Finally, more and more fast chargers are available, and car companies are doing deals with Tesla to get their customers access to its impressive network of fast chargers.

The ongoing UAW strike could slow EV production this fall. The strike is in part about workers’ position in the new EV industry, as Kielly Hu & Katie Myers argue at Grist. EVs have fewer parts than gasoline cars and require fewer workers per unit for assembly. If fewer workers are needed, workers have less leverage. There is a danger of workers being sized down and having their pay cut so that management can increase its massive salaries and perquisites. The UAW saw this danger coming and is striking now to ensure that workers don’t get a raw deal in the transition to EVs.

Workers’ salaries are only 5% of the cost of a new car, and paying the workers a living wage is just not going to interfere with making and selling the EVs. Plus Biden’s tax credits are already an enormous public support to the EV industry, which should be shared with the workers who make the cars; it wasn’t envisaged as corporate welfare for CEOs.

Biden, who is unique among modern presidents in being fully committed to union workers and to the green energy transition, is joining the UAW picket line.

The US Big Three will say they are under pressure from Elon Musk’s Tesla, which is produced at a profit by non-union workers. But German car companies aren’t going bankrupt and you should see their workers’ benefit package. In fact, Musk could easily afford to pay his workers union scale and he would still be a multi-billionaire. As it was, he skimmed from their salaries, built up $44 billion, and squandered it on ruining Twitter. Wouldn’t we be better off with a better-made Tesla produced by unionized workers that left Musk less mad money to muck up the internet with? The whole sad saga is an argument for Democrats to roll back all those state-level “right to work” laws put in by the Republicans in the past two decades, which have devastated the unions and hurt the Democratic Party. The Michigan Dems pulled this off, just because they wanted to.

Transportation accounts for 28% of US carbon dioxide emissions, the largest single such sector. Despite the lying lies of liars funded by Big Oil, EVs across the board reduce CO2 emissions compared to gasoline cars, regardless of the mining of lithium or the exact mix of each state’s electricity grid. Moreover, a lot of EV buyers are putting up solar panels — about 4% of American homes now have them — and where owners can charge at home during daylight hours from their own panels they are getting virtually carbon-free fuel, and expending it while driving. You do have to drive an EV a couple of years before you start driving carbon-free, since the carbon that goes into the construction of the auto has to be accounted for. But it turns out that EV batteries are long-lived, and you could drive the thing a lot of years. Moreover, green steel plants that can produce low-carbon steel are being built, and the metals in EVs, including lithium, are increasingly being recycled, which substantially drops their carbon intensity compared to mining them anew.

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Electric Vehicle Demand surge through 2030, So Why is the Oil Industry Doubling down on Production? https://www.juancole.com/2023/09/electric-industry-production.html Wed, 20 Sep 2023 04:02:05 +0000 https://www.juancole.com/?p=214417 By Robert Brecha, University of Dayton | –

Electric vehicle sales are growing faster than expected around the world, and, sales of gas- and diesel-powered vehicles have been falling. Yet, the U.S. government still forecasts an increasing demand for oil, and the oil industry is doubling down on production plans.

(The Conversation) – Why is that, and what happens if the U.S. projections for growing oil demand are wrong?

I study sustainability and global energy system transformations. Let’s take a closer look at the changes underway.

EVs’ giant leap forward

On Sept. 12, 2023, Fatih Birol, director of the International Energy Agency, an intergovernmental organization that advises the world’s major economies, drew global attention when he wrote in the Financial Times that the IEA is now projecting a global peak in demand for oil, gas and coal by 2030.

The new date was a significant leap forward in time compared with previous estimates that the peak would not be until the 2030s for oil and even later for gas. It also stood out because the IEA has typically been quite conservative in modeling changes to the global energy system.

Birol pointed to changes in energy policies and a faster-than-expected rise in clean technologies – including electric vehicles – along with Europe’s shift away from fossil fuels amid Russia’s war in Ukraine as the primary reasons. He wrote that the IEA’s upcoming World Energy Outlook “shows the world is on the cusp of a historic turning point.”

The United Nations also released its “global stocktake” report in early September, assessing the world’s progress toward meeting the Paris climate agreement goals of limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) compared with preindustrial temperatures. The report found serious gaps in efforts to reduce greenhouse gas emissions to net-zero by soon after mid-century. However, it noted two bright spots: The world is more or less on track in the growth in solar photovoltaics for renewable energy – and in the growth of electric vehicles.

The dynamics of EV expansion are important because each vehicle that uses electricity instead of gasoline or diesel fuel will depress demand for oil. Even though demand for petroleum products in other sectors, like aviation and petrochemicals, is still increasing, the IEA expects a decline in road transportation’s 50% share of oil consumption to drive an overall peak in demand within a few years.

EVs are now on pace to dominate global car sales by 2030, with fast growth in China in particular, according to analysts at the Rocky Mountain Institute. If countries continue to upgrade their electricity and charging infrastructure, “the endgame for one quarter of global oil demand will be in sight,” they wrote in a new report. As electric trucks become more common, oil demand will likely drop even faster, the analysts wrote.

Global sales of light-duty vehicles already show a decrease in internal combustion – gasoline and diesel – vehicle sales, mainly due to increasing EV sales, but also due to an overall decline in vehicle sales that started even before the pandemic.

So, why is the US projecting oil demand growth?

Based on the data, it appears that global oil demand will peak relatively soon. Yet, major oil companies say they plan to increase their production, and the U.S. Energy Information Administration still projects that global demand for oil and fossil fuels will continue to grow.

Vehicles do last longer today than they did a couple of decades ago, and they are also larger, slowing down efficiency gains. But the Energy Information Administration appears to be lowballing projections for EV growth.

The Biden administration, which pushed through large U.S. tax incentives for EV purchases, has taken steps to clear the way for increasing some oil and natural gas exploration. And large government subsidies continue flowing to fossil fuel industries in many countries. These contradictions undermine the goals of the Paris Agreement and could lead to costly stranded assets.

What do these trends mean for the oil industry?

It’s fair to assume that large industries should have a good handle on future developments expected to affect their fields. But they often have a competing priority to ensure that short-term gains are preserved.

Electric utilities are an example. Most didn’t feel threatened by renewable electricity until penetration expanded quickly in their territories. In response, some have lobbied to hold off further progress and invented spurious reasons to favor fossil fuels over renewables.

Of course, some companies have changed their business models to embrace the renewable energy transition, but these seem to still be in a minority.

Large corporations such as BP and TotalEnergies invest in renewables, but these investments are often offset by equally large investments in new fossil fuel exploration.

Both Shell and BP recently backpedaled on their previous climate commitments in spite of tacit admissions that increasing oil production is inconsistent with climate change mitigation. Exxon’s CEO said in June 2023 that his company aimed to double its U.S. shale oil production over the next five years.

What is happening in the fossil fuel industry seems to be an example of the so-called “green paradox,” in which it is rational, from a profit-maximization point of view, to extract these resources as quickly as possible when faced with the threat of future decreased market value.

That is, if a company can see that in the future its product will make less money or be threatened by environmental policies, it would be likely to sell as much as possible now. As part of that process, it may be very willing to encourage the building of fossil fuel infrastructure that clearly won’t be viable a decade or two in the future, creating what are known as stranded assets.

In the long run, countries encouraged to borrow to make these investments may be stuck with the bill, in addition to the global climate change impacts that will result.

Extractive industries have known about climate change for decades. But rather than transform themselves into broad-based energy companies, most have doubled down on oil, coal and natural gas. More than two dozen U.S. cities, counties and states are now suing fossil fuel companies over the harms caused by climate change and accusing them of misleading the public, with California filing the latest lawsuit on Sept. 15, 2023.

The question is whether these companies will be able to successfully adapt to a renewable energy world, or whether they will follow the path of U.S. coal companies and not recognize their own decline until it is too late.The Conversation

Robert Brecha, Professor of Sustainability, University of Dayton

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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How Zinc-Ion Batteries may solve our Renewable Energy Storage Problem https://www.juancole.com/2023/09/batteries-renewable-storage.html Sat, 16 Sep 2023 04:02:19 +0000 https://www.juancole.com/?p=214369 By Storm William D Gourley, McMaster University and Drew Higgins, McMaster University | –

(The Conversation) – Hotter summers, drier forests, rising waters: climate change is not just a threat to our future, it’s hurting our world right now.

While there are many ways human activity has brought about climate change, global electricity generation sources are among the leading culprits. Despite small upticks in the supply of wind and solar power, we have not yet reached a point where we are able to dislodge the fossil fuels that are entrenched in the power mix of many countries.

But why is this still the case?

Since renewable sources deliver an intermittent supply of power, we also need a way to store this energy to meet the demand of the grid when the sun is not shining, or the wind is not blowing. This is a major challenge, as the switch to renewable power also requires establishing long lasting, safe and affordable energy storage systems. As such, finding a cheap, safe and alternative battery to lithium is the key to moving the needle to a completely renewable power sector.

Beyond lithium-ion batteries

As with electric vehicles, lithium-ion batteries have become a popular option for the grid, as they offer a high energy density, modular solution for energy storage. But the use of lithium-ion batteries has also brought along its own challenges with high cost of materials, risk of fire and explosion and lack of recycling practices limiting the widespread adoption of lithium-ion batteries for the grid.

One incredibly promising option to replace lithium for grid scale energy storage is the rechargeable zinc-ion battery. Emerging only within the last 10 years, zinc-ion batteries offer many advantages over lithium. These include cheaper material costs, increased safety and easier recycling options.

With grid-scale energy storage potential at a considerably cheaper cost — and higher levels of safety — widespread commercialization of zinc-ion batteries could be exactly what is needed to integrate renewables into energy
infrastructure in Canada and other countries.

The cost of a battery

For Canada to reach the decarbonization targets set in the Canadian Net-Zero Emissions Accountability Act, including a grid powered by 90 per cent renewable electricity, the deployment of zinc-ion batteries will be crucial.

Studies have shown that for renewables to become the source of 90 to 95 per cent of all electricity, the cost of energy storage must be below US$150/kWh. Modern lithium-ion systems are still sitting around US$350/kWh. In part, this is due to high manufacturing costs and their reliance on expensive raw materials to achieve the high energy density needed for modern electric vehicles.

Zinc-ion batteries on the other hand, could solve the cost and abundance issues. Using inexpensive, abundant materials such as zinc and manganese not only makes them cheaper to produce, but lowers risk from supply chain disruptions or material shortages that affect lithium-ion materials such as lithium and cobalt.

The annual production of zinc globally is over 100 times that of lithium. Not to mention that demand for lithium and cobalt is anticipated to outweigh the supply within the next decade.

Zinc is a safer option

With rigorous safety standards being created for batteries used in homes, factories or within the electrical grid, safety is key to getting the public to embrace them. In this way, zinc-ion batteries offer further advantage.

The flammable and toxic solvent based electrolyte of lithium-ion batteries is replaced with a water-based alternative, removing the risk of fire and explosion.

Conversely, the safe disposal of lithium-ion batteries can also be a difficult task, as they contain toxic compounds. Recycling these batteries is currently economically infeasible due to high costs leading to large numbers of spent cells ending up in landfills.

Fortunately, zinc-ion batteries simplify end of life treatment. The nontoxic, aqueous electrolyte used in zinc-ion batteries means that well established methods like those for lead-acid battery disposal can be used. Also, the metallic zinc anode could be easily reused in new batteries.

The future of energy storage

To reach its goal of 90 per cent renewable energy by 2030, Canada must look for alternatives to lithium-ion batteries to enable decarbonization of its power sector. Leveraging the cost, abundance and safety benefits of zinc-ion batteries, Canada can accelerate the integration of wind and solar power across the nation.

Zinc-ion batteries support Canada’s decarbonization goals and prove an opportunity to capitalize on a rapidly expanding battery market. While zinc-ion batteries are a relatively new technology, their potential to support grid scale energy storage within Canada and worldwide cannot be understated.

With the help of Canadian research and manufacturing, including efforts from McMaster University and Dartmouth, N.S.-based Salient Energy Inc., the integration of zinc-ion batteries could become a reality within the next several years, establishing Canada as an industry leader.The Conversation

Storm William D Gourley, PhD Candidate, Chemical Engineering, McMaster University and Drew Higgins, Assistant Professor, Department of Chemical Engineering, McMaster University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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How Nevada just became the Saudi Arabia of Lithium, as World’s Largest Deposit is discovered at Thacker Pass https://www.juancole.com/2023/09/deposit-discovered-thacker.html Mon, 11 Sep 2023 05:28:15 +0000 https://www.juancole.com/?p=214313 Ann Arbor (Informed Comment) – In the scientific journal Science Advances, Thomas R. Benton and his colleagues published a paper last month showing that a volcanic crater, the McDermitt Caldera, stretching across the Nevada and Oregon border may have doubled the world’s accessible lithium deposits. There are an estimated 88 million tons of lithium reserves in the world, but only about 22 million can be mined, practically speaking. But in the Thacker Pass area of the Caldera, on the Nevada side of the border, there may be 20 to 40 million tons of lithium. It is locked up in illite claystones, from which it can be extracted relatively easily. It is estimated to be the single largest lithium deposit now known in the world. Mining is slated to begin in 2026.

There are downsides. Environmentalists opposed the operations as polluting. Native Americans consider the area sacred. The issue went to court, and the judge sided with the corporation that wants to mine the lithium. I hope it took a lesson that the operation should proceed with as much environmental consciousness and sensitivity to local concerns as possible. It is also not clear how carbon-intensive the mining operations would be.

Still, the find is good news because some observers have worried that we will run out of lithium.

Only by ceasing to use coal, fossil gas and petroleum can we halt the continuing rise of the average surface temperature of the earth that contributed mightily to the catastrophes of the past summer. We need to electrify everything and to supply the electricity from non-carbon sources. The electrification of electricity and of vehicles at the moment depends significantly on the lithium ion battery. The batteries fuel electric vehicles. Since wind and sunshine are intermittent, battery storage is ideal for getting the full benefit of energy harvesting when the sun is shining or the wind is blowing. California now has some 5 gigawatts of battery storage, which is helping prevent electricity outages during times of peak usage, typically around 5-8 pm, especially in hot months. The US will likely need some 300 gigawatts of battery storage by 2050.

So we will need lots of lithium, arguably more than the 22 million tons the world had plausible access to before the Thacker Pass deposit was discovered.

Worrying about lithium supplies decades into the future, however, is silly. It is a waste of time for many reasons.

Such worries do not take into account the plans to recycle lithium.

Then, battery technology is changing with incredible speed, and there are billions of dollars, both government and private, going into developing new, better, and more efficient batteries. The MIT Technology Review reports that the Department of Energy just gave a $400 million loan to Eos Energy, which is attempting to make inexpensive, efficient zinc-halide batteries. Zinc is the 24th most abundant material on earth and some 210 million metric tons of it are known to exist in the world.

Nickel-iron batteries, known for over a century, are also getting a second look by researchers eager to solve some longstanding problems with them. Nickel and iron are among the most plentiful materials on earth, and a successful battery based on them would be potentially much cheaper than lithium-ion batteries.

Even if we stay with lithium batteries, we will find more deposits and the price will fall. Capitalism has many faults, but it does impel certain efficiencies that cause needed primary materials to fall in price over time.

That was the lesson of the wager biologist Paul Ehrlich made with business Professor Julian L. Simon in 1980. Ehrlich bet that copper, chromium, nickel, tin, and tungsten would all become more expensive by 1990, because humans were using more and more of them. As Simon predicted, however, they fell in price, because their very desirability caused more of them to be mined.

Of course, the earth does have limits, and human beings are using more of its resources than is sustainable. But we are a long way from running out of basic metals, which can after all also be recycled.

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A Perfect Storm: Does China’s EV Dominance Threaten European Auto Makers on their Home Turf? https://www.juancole.com/2023/09/dominance-threaten-european.html Sun, 10 Sep 2023 04:02:18 +0000 https://www.juancole.com/?p=214285 By Sören Amelang | –

On the way from China to Europe: BYD electric car. Image by BYD
On the way from China to Europe: BYD electric car. Image by BYD

( Clean Energy Wire ) – Europe’s carmakers have little to celebrate at this year’s IAA mobility show. Chinese firms’ widening lead in the global shift to electric vehicles is on open display at the biennial fair in Munich, while climate activists lambast European firms’ reliance on dirty combustion engines and SUVs. The number of Chinese exhibitors has doubled, underlining their ambition to challenge brands like Volkswagen, BMW, Peugeot, Renault and Fiat on their home turf. Industry experts warn that these household names are facing a “perfect storm.” [UPDATE: IAA opening with Scholz address]

China’s rapid transformation into an electric car superpower that threatens Europe’s established carmakers even on their home turf is a dominant theme at this year’s IAA motor show in Bavaria’s capital Munich. The presence of Chinese companies has doubled at this year’s show, which is open to the public from 5 to 10 September, reflecting a tectonic shift in the global automobile industry.

“A perfect storm is brewing in Munich,” said Christian Hochfeld, who heads Berlin-based clean mobility think tank Agora Verkehrswende. “Established European carmakers are facing huge challenges.”

Hochfeld pointed to China’s lead in battery technology, digitalisation, competitiveness, and the automation of production. He also noted conventional carmakers’ dependence on fragile supply chains dominated by the East Asian country, both in raw materials and products like batteries and electronics. Additionally, carmakers are dealing with a sales crisis in Europe, high energy prices, and a skilled labour shortage, Hochfeld told Clean Energy Wire.

Stefan Bratzel, the director of the Center of Automotive Management, also warned against regarding conventional carmakers’ record profits as an indication of future success. “They might still be doing fine at the moment, but trouble is ahead,” Bratzel said.

“China is like a magnifying glass of the transition. What we will see on a global scale in the future can already be observed in China today,” Bratzel said. “Electrification and digitalisation are far more advanced than in Europe, and domestic competitors are very strong in China, especially in electric mobility. Established carmakers have their work cut out for them.”

As the world races to lower emissions in the fight against climate change, a rapidly growing number of countries and cities have already set phase-out dates for combustion engines. This shift has massive repercussions for the Europe’s car industry, whose success was built on this climate-damaging technology, and has been slow to switch to clean alternatives like electric vehicles.

The IAA promises a comprehensive view of mobility.
The IAA promises a comprehensive view of mobility.

German Chancellor Olaf Scholz attended the official opening, underlining the political significance of the show hosted by Germany’s car industry association VDA. In his opening address, he praised the nation’s carmakers, and said the competitiveness of Germany as a car country was “completely beyond question”.

The IAA is one of the world’s most important auto industry events, and has a history stretching back more than 100 years. Previously known as the Frankfurt auto show, the event rebranded to “IAA Mobility” in 2021 in the face of climate protests and declining interest from both industry and the public. The main novelty this year is the complete separation of these two target audiences. A traditional trade fair will cater exclusively to business visitors, while non-business visitors can check out various locations in Munich’s city centre free of charge.

Previous IAA shows had already shifted much of their focus to zero-emission mobility and have moved the attention from solely cars to other forms of transport like bikes and buses. The IAA says it “stands for a modern and comprehensive concept of mobility like no other event.”

Sales shock made in China

Recent trends in China, the world’s largest car market, provide deeply unsettling news for Europe’s auto industry, especially German brands. Accounting for more than a third of sales, the East Asian country is the most important market for BMW, Mercedes, and Volkswagen, including its Audi and Porsche subsidiaries. But the German brands’ success in China, which was built on combustion-engine prowess, is quickly eroding as the country switches rapidly to electric vehicles (EVs).  

VW recently lost its decades-old pole position in the Chinese market to domestic rival BYD (“Build Your Dreams”), which delivered almost 20 times more electric cars to customers in China than VW at the start of this year. Not a single European brand makes it into the top ten of China’s best-selling electric models. Four out of five electric vehicles sold in China are from domestic brands – only Tesla has a sizeable electric market share.

For the first time, Chinese carmakers are likely to outsell foreign brands in the overall Chinese auto market this year, including vehicles with internal combustion engines, according to management consultancy AlixPartners, who expect the domestic share to rise to 65 percent by 2030.

Rattled European carmakers fear Chinese “invasion”

“China is on its way to becoming an automotive superpower,” AlixPartners’ Fabian Piontek told DW. European manufacturers are increasingly finding themselves defending market share at home. “The era of record profits for German automakers is coming to an end,” he concluded. This shift is being felt even on a global scale, where BYD overtook BMW in the first half of year.

The Chinese newcomers are also starting to conquer the European market. Of new EVs sold on the continent this year, eight percent were made by Chinese brands – double the 2021 share, according to autos consultancy Inovev. Western automakers are rattled, with Carlos Tavares, the CEO of the Stellantis Group, which includes Peugeot and Fiat, warning of an “invasion” of cheap Chinese EVs in Europe.

The German car industry’s assessment is also sombre. “The Chinese car industry is massively supported by the state in terms of industrial policy, while our production costs are moving further and further out of line with international competitiveness. These are difficult conditions,” said the VDA lobby group’s head Hildegard Müller.

Volkswagen top executives also took a dim view on an internal conference call in July, people familiar with the event told the Wall Street Journal. A divisional chief told his colleagues that exploding costs, falling demand and new rivals such as Tesla and Chinese electric-car makers are making for a “perfect storm,” adding: “The roof is on fire.”

BMW CEO Oliver Zipse takes a slightly more upbeat view. Products made in China must be taken seriously but do not yet pose a significant threat to his company’s business, he told business daily Handelsblatt. “No one can enter a new market overnight,” Zipse said, arguing that “ambition does not equal success” when it comes to new potential rivals from China that attempt to gain a foothold in the European car market. “It remains to be seen how well the new players meet the requirements and tastes of European customers,” the manager said, explaining that digitalisation, logistics, maintenance services and many other factors played a role in customers satisfaction.

Chinese carmakers “are coming to stay”

China’s superiority in many industry trends, as well as its ambitions, are obvious at the IAA, where BYD and other Chinese brands unveil a whole range of electric models. “BYD is truly dedicated to introducing innovative and high-tech eco-friendly cars to the European market,” said Michael Shu, managing director of the company’s European division. “The IAA in Munich provides us with the perfect platform to showcase our latest BYD models … We head to the Munich motor show with great excitement.”

In a further sign of changing times, China held its own electric mobility trade show, the World New Energy Vehicle Congress (WNEVC), as part of the IAA – the first time the WNEVC takes place outside of China.

“It’s a strong signal clearly indicating the Chinese carmakers are coming, and they are coming to stay,” Hochfeld said. “They will probably become market leaders in certain segments in Europe. That will be the new normal.”

Nio is another Chinese newcomer marketing its cars to European clients. Image by Nio
Nio is another Chinese newcomer marketing its cars to European clients. Image by Nio

From entry level to premium

Gartner analyst Pedro Pacheco also highlighted the significance of the WNEVC. “Having the WNEVC come to the IAA in Munich is quite symbolic because we are starting to see Chinese automakers expanding more and more outside of China,” he told Automotive News Europe. He added the entry-level EVs are an obvious target for Chinese players, given that European brands have “next to nothing” on offer in this segment.

But Hochfeld warned that Chinese brands could also take a sizeable share of the premium market, as clients’ attention shifts from mechanical precision – a trademark of European luxury brands – to connectivity and entertainment, where Chinese brands are superior. Auto industry consulting firm Berylls already forecasts a “change of guard” in China’s premium segment. In the race with traditional luxury manufacturers from Germany, the Chinese are “overtaking on the fast lane,” Berylls said.

Problem child

The IAA is also shining a spotlight on the host country’s failure to make much headway in making mobility more climate friendly. Germany likes to consider itself a green pioneer due to its landmark energy transition. But the country has been struggling to lower transport emissions, which have remained broadly stable for decades, as gains from more efficient engines have been eaten up by heavier cars. The transition to low-emission mobility is often referred to as climate policy’s “problem child,” and is a particularly sensitive topic given that more than 800,000 German manufacturing jobs directly depend on the industry.

As a result, future mobility has already become an electoral topic in Germany. The Christian Democrats (CDU), who are in opposition on a federal level, as well as the Free Democrats (FDP), who are in a federal coalition government, are attempting to lure voters with pro-car policies. For example, the city of Berlin’s new CDU-led government coalition halted cycle lane projects earlier this year to preserve parking spaces, following a successful pro-car election campaign. In comparison to a rapidly growing number of other European cities like Amsterdam, Barcelona or Paris, Germany’s capital already lags far behind when it comes to sustainable mobility.

Under intense pressure from the FDP, the German government earlier this year insisted on exceptions for synthetic fuels in the EU push for climate-friendly cars, enraging European partners. These fuels made with renewable electricity could throw a lifeline to combustion engines, but are considered an unsuitable option by most experts, because they are highly inefficient compared to electric motors. Germany is also lagging on its own targets for the rollout of electric cars. “The current state of affairs signals that the German government’s target of 15 million electric vehicles in 2030 will be missed by 50 percent,” according to the Center of Automotive Management (CAR).

An activist alliance plans a protest camp and other actions at this year's IAA
An activist alliance plans a protest camp and other actions at this year’s IAA

Radical climate activists reject invitation

Against this backdrop, the IAA is accompanied by anti-industry and anti-government protests. Climate activists united under the label “BlockIAA” are calling for a large demonstration on 10 September. Additionally, about 1,500 activists are expected to participate in a “Mobility Transition Camp” in a central Munich park. It offers an alternative programme to the IAA’s that talks about “ways out of the fossil car trap” and “towards a mobility that benefits people instead of car industry shareholders,” according to organisers, which include well known activist movements Fridays for Future and Attac Germany, as well as smaller groups like “Sand im Getriebe” (roughly translated as “spanner in the works”), “No Future for IAA”, and “Smash IAA”.

“We are heading unchecked toward a climate catastrophe – and the car companies continue to press down on the gas pedal. More and more cars, ever larger and heavier, are clogging up the roads, taking away the air we breathe and heating up the climate. This has to stop now,” argue the organisers, who are also planning a bicycle demo and acts of civil disobedience. They accuse the IAA of “cluttering up our public spaces with token bicycles, greenwashed electric vehicles & braggy cars”.

In an attempt to channel climate protests, which have become something of an IAA tradition, the organisers offered an exhibition space to the relatively radical Last Generation group, which has become infamous for their road blockades in Germany. But the group, along with Greenpeace and Fridays for Future, rejected the invitation: “We are not available for such an obvious attempt to co-opt us.” The VDA has also tried to engage with other climate activists and critics of the event. For example, 21-year-old activist and UN advisor Sophia Kianni is scheduled to speak at the show on 6 September about the climate protection initiative she founded, Climate Cardinals.  

Clean Energy Wire

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Labor Day: Is Biden’s Green Energy IRA the most Pro-Worker Legislation in Decades? https://www.juancole.com/2023/09/bidens-legislation-decades.html Mon, 04 Sep 2023 05:04:19 +0000 https://www.juancole.com/?p=214201 Ann Arbor (Informed Comment) – The Inflation Reduction Act, President Biden’s signature piece of legislation that was passed with no Republican support, contains $369 billion for the green energy transition. Since much of this funding leverages corporate and individual investments, its impact will be in the trillions of dollars. Given the dire climate crisis we face, these monies will leverage a safer future. But since it is Labor Day, it is worth considering the IRA’s impact on American workers, for whom it is a significant gift.

The Inflation Reduction Act’s investments in green energy and combating the effects of climate change has already created an estimated 170,000 jobs since the act was signed into law by President Biden on August 16, 2022. Outside institutions estimate that in toto it will create 1.5 million jobs.

The act has already leveraged $110 billion in investments by the private sector in green energy.

The Treasury Department recently published new rules that clarify that the attractive tax credits for green energy investments in the Act depend on a company’s workers being paid the prevailing wage. The site says,

    “The Inflation Reduction Act’s prevailing wage and registered apprenticeship requirements apply to many of the clean energy deployment tax incentives under the law, including for the clean energy investment and production tax credits that help finance utility-scale wind, solar, and battery storage projects as well as for the credits for carbon capture, utilization, and storage and clean hydrogen projects. If the prevailing wage and registered apprenticeship requirements are satisfied, a taxpayer can claim an enhanced credit or deduction equal to up to five times the value of the regular credit or deduction. While prevailing wage and apprenticeship requirements have existed for more than 100 years and have long applied to projects supported by federal contracts, the Inflation Reduction Act applied these requirements to clean energy tax incentives for the first time.”

The White House clarifies that “Many of the IRA’s clean energy deployment tax incentives are increased by five times if taxpayers pay workers prevailing wages and use Registered Apprentices.”

The Department of Labor defines the prevailing wage this way: “The prevailing wage rate is defined as the average wage paid to similarly employed workers in a specific occupation in the area of intended employment.”

Registered apprentice programs are industry-driven career paths that allow for on-the-job and supplemental training and education, and which produce credentials that are recognized industry-wide.

So a company that hires green energy workers for much less than they are usually paid to do that work in that town will be cheating itself out of a nice fat tax break. Likewise those that have no registered apprentice program will be at a disadvantage regarding government grants.

The White House also points out that the Department of Energy has begun accepting applications for $2 billion in grants to help auto manufacturers transition from internal combustion engine cars to electric cars.

The program seeks to protect workers’ jobs by prioritizing grants to facilities that are in danger of shutting down. Likewise, those applicants that have a track record of retaining workers and pay high wages will have an advantage, as well as those that are staying put in their long-established community as opposed to relocating elsewhere. In other words, Biden really is engaged in industrial policy, using the carrot of substantial government funding to shape the work environment to be favorable to workers.

The Department of Energy is also offering $10 billion in loans for the conversion process, which, again, will go first of all to companies with “strong workforce practices and labor standards.”

The Department of Energy is also making available $3.5 billion in grants for the construction of battery factories in the US, and will favor those companies planning to create high-quality jobs.

Finally, note that many workers suffer from the inhalation of the particulate matter created by burning fossil fuels in factories, causing lung cancer, hypertension and heart attacks. Biden’s legislation is estimated to reduce CO2 emissions by a billion tons by 2030, making the air much healthier and avoiding the worst impacts of climate change.

Happy Labor Day, everyone.

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Germany: Even with Reduced Subsidies, Non-Gasoline Cars Comprised 46% of New Registrations in First 7 Months of 2023 https://www.juancole.com/2023/08/subsidies-comprised-registrations.html Sat, 19 Aug 2023 04:02:08 +0000 https://www.juancole.com/?p=213925 By Benjamin Wehrmann | –

( Clean Energy Wire ) – The share of fully electric passenger cars in Germany continues to grow quickly, with the number of e-car registrations growing more than 37 percent in the first seven months of 2023 compared to the same time frame the previous year, figures released by the Federal Motor Transport Authority (KBA) show.

With nearly 269,000 new e-cars on the road, battery-run electric vehicles accounted for 16.4 percent of all new registrations, KBA said. A reduction in support payments for new electric vehicles meant that the share dropped to merely 10 percent in January (after reaching 33 percent in December 2022) before gradually climbing back to 20 percent by July this year.

The share of all new registrations for cars with “alternative propulsion systems,” including batteries, plug-in hybrids, and fuel cell cars, was nearly 46 percent of the 1.64 million new cars registered between January and the end of July — 17.3 percent more than during the same period in the previous year.

The most popular brands for fully electric vehicles were Germany’s largest carmaker Volkswagen, with roughly 41,475 units registered, and U.S. brand Tesla, with about 40,290 cars. Luxury brand Mercedes had some 20,600 new cars registered, followed by Audi (16,785), Hyundai (15,410) and Fiat (11,290).

The electrification of the transport sector is key for the energy transition: switching combustion engine cars for electric vehicles is set to make a big contribution in reducing emissions in the sector, as these have remained stubbornly high for years.

Via Clean Energy Wire

Published under a “Creative Commons Attribution 4.0 International Licence (CC BY 4.0)”

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