Electric vehicle a transformation force, needs comprehensive policies

M Rokonuzzaman | Published: September 13, 2019 20:58:51 | Updated: September 19, 2019 21:34:33

Despite the absence of policy support and subsidies, electric vehicles are in increasing use in most of the developing countries. In Bangladesh, for example, more than 100,000 electric vehicles are running in the country. Most of those are 'Easy Bikes' and similar three-wheelers. As opposed to family sedans in advanced countries, the entry points of electric vehicles in many developing countries are scooters and three-wheelers. To cope up with the market force, regulators are often found to formulate guidelines for electric vehicles specifying registration and fitness certificate, and making tax token mandatory for these environment-friendly vehicles.

As EVs are growing as a transformation force, there is a need for having comprehensive policies. Some of the significant issues in leveraging EVs are related to (i) battery, (ii) charging, (iii) maintenance, (iv) recycling, (v) jobs & reskilling, (vi) value addition, (vii) hydrogen, (viii) petroleum trade, (ix) supply of electricity and renewable energy, and (x) bulk energy storage. 

Air pollution has been one of the drivers behind the development and adoption of EVs. To address worsening air pollution in major cities, China responded with strong policy support to the development and diffusion of EVs. Starting from purchasing cobalt mines in Africa to building cobalt refining facility, providing R&D incentive in improving battery technology are some of China's major policy response. India, too, has adopted a strong supportive policy to help EVs become sustainable. The journey of phasing out gasoline-powered vehicles with EVs has also created a significant policy challenge to India. The most critical challenge for India has been to deal with the likely plunge in India's value addition capacity in the automobile industry. The threat of job loss to 37 million people involved with gasoline-powered automobile industry is attributed to the recent slump in India's economic growth by 5 per cent. 

Lithium-ion is not the only battery type used in EVs. Rechargeable batteries used in electric vehicles include lead-acid, NiCd, nickel-metal hydride, lithium-ion, Li-ion polymer, and less commonly, zinc-air and molten-salt batteries. Policy issues are with type, size, and grade of batteries. From the ease of use, capital and operating cost, recycling, to local value addition -- everything should be taken into consideration. Battery swapping is another issue. The policy should take into account the optimum balance between battery size, cost of the battery, charging time. Import and local production of the battery should also be considered.

Charging of EVs is an issue. Although EVs could be charged overnight at home, but that is only 30 to 40 per cent of the capacity. Fast DC charging stations are cost-effective options in public places. Installation of them in apartment buildings may not be feasible, due to limited scale effect. But they could be installed in existing petrol or CNG (compressed natural gas) refueling stations. DC charging stations could also be installed in large parking lots of office buildings or shopping malls. Charging of EVs effectively and efficiently involves policy issues.

Maintenance of EV will require different types of components, equipment, and also skill. As opposed to 2000+ moving parts of gasoline cars, electric cars need 20 or so. Starting from battery, motors to power electronic modules, most of the EV components are unique. For addressing the issue of maintenance, workshops should be uplifted. Technicians should be reskilled. Moreover, EVs will likely require less labour in maintenance, resulting in job loss of technicians. How the skill uplifting will be done, and job loss to be addressed are among EV policy issues.

Recycling of battery is a policy issue. On one hand, discarded batteries are going to pose a serious threat to the environment. They can not be recycled using a labour-based technology. On the other side, recycling of batteries in extracting valuable metals like cobalt can be an essential source of value extraction. Recycling of other electrical components like motors and power electronics is also an issue. Relevant policies should look into the development of suitable EV recycling industry. The focus of EV recycling may take into account the global recycling market as well.

As opposed to gasoline cars requiring as many as 2,000 moving parts, electric cars may have as few as 20, cutting direct labour cost by as much as 50 per cent. As components of EVs need far less labour than required by gasoline vehicles, labour-based value addition scope will virtually disappear in the EV era. Due to high intellectual property need, and likely continued growth of the underlying technology, establishing local plants in manufacturing EV components and assembling the whole vehicle do not offer much competitive advantage to most of the developing countries. On the other hand, rapid technology progression may make importing of used EVs a cost-effective option.

How to power long haul buses and trucks is also an EV policy issue. It appears that available battery technologies like lithium-ion will not be suitable for this purpose. Advanced countries are adopting substitute: hydrogen. Due to long-range and low fueling time, hydrogen has the edge over electric battery to power buses and trucks. With the growth of EVs, the demand for liquid fuel will likely keep decreasing, raising the issue of transition in petroleum trade. Over the next 20 years, it appears that policy requires an optimum balance between battery, hydrogen and petroleum to fuel automobiles.     

The supply of electricity and bulk storage is also an issue. Subsidy given to electricity influencing cost-benefit also raises the EV policy issue. In the absence of subsidy, is it a cheaper option to burn coal or natural gas to produce electricity to charge the electric battery? The emergence of economically viable renewable energy sources like solar and wind also add policy twist to EV. Renewable energy sources are intermittent in nature. The issue of surplus energy, while the sun shines or the wind blows, should be factored in the EV policy framework. Should we store surplus energy in large battery storage or convert it into hydrogen? The answer to this question also influences EV policy. 

Despite some uncertainty like the cross over point of EV, the trend of transition to EV is more or less clear. This transition from gasoline-powered vehicles to EV raises far more policy issues than regulatory concerns like issuance of licence or fitness certificate, and collecting taxes. Some of the policy issues are conflicting in nature, often creating a policy dilemma. Relevant policy issues should be adequately addressed to manage this transition so that wasteful investment could be minimised and gain from the cleaner technology option could be maximised. 

M Rokonuzzaman PhD is an academic and researcher on technology, innovation ands policy.


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