The impact of policies on EVs

Issue #271

Policies play a key role for the successful adoption of electric vehicles (EVs) on a large scale. Policies should reflect the ground reality, at the same time push both manufacturers, customers, and others in the ecosystem to do more. Overall, carbon emissions growth has slowed to around 0.6% per year the past decade from closer to 3% in the 2000s, thanks partly due to EVs and renewable energy. However, Toyota sounded the alarm that California-led EV mandates that are set to start next year are “impossible” to meet and, if they’re not changed, will lead to less customer choice in several states. Hertz tumbled after the company reported a worse-than-expected loss stemming from the rental-car company’s failed bet on EVs. Battery swapping can be a game-changing opportunity for electrification for heavy commercial vehicles (buses, trucks) in India. Pricing and production discipline, a reputation for quality and durability, and listening to customers keep Toyota and Honda at the top of resale value. China's CATL, the world's largest supplier of EV batteries, seeks to capture growing demand for plug-in hybrids with a new compound battery pack that promises a range of 400 km. Below are some recent updates in the EV sector, more towards the policy side.

EVs and carbon emission

Carbon dioxide emissions from fossil fuels inched higher in 2024 and are estimated to set a record. Burning fossil fuels like coal, oil and natural gas caused CO2 releases to rise an estimated 0.8% to a record 37.4 billion metric tons in 2024. Overall, emissions growth has slowed to around 0.6% per year the past decade from closer to 3% in the 2000s. That is evidence that the emergence of renewable energy, and the adoption of EVs is making a difference. - Bloomberg

EV mandates in California and reality

Toyota sounded the alarm that California-led EV mandates that are set to start next year are “impossible” to meet and, if they’re not changed, will lead to less customer choice in several states. Current requirements under the California Air Resources Board’s "Advanced Clean Cars II" regulations call for 35% of 2026 model-year vehicles, which will begin to be introduced next year, to be zero-emission vehicles, or ZEV. Battery-electric, fuel cell and, to an extent, plug-in hybrid electric vehicles qualify as zero emission under the regulations. - CNBC

Hertz and its EV decisions

Hertz tumbled after the company reported a worse-than-expected loss stemming from the rental-car company’s failed bet on EVs and heavy depreciation costs that have pummeled earnings for the past year. Repair costs were higher than expected and customers leased them at lower rates compared to conventional vehicles. The company posted an adjusted loss of 68 cents a share in the third quarter, more than the 46-cent average deficit estimated by analysts. Hertz also took a $1 billion non-cash impairment charge during the quarter, largely due to the lower value of the battery-electric and gas-powered vehicles in its fleet. The company has said it plans to sell 30,000 EVs by the end of this year and get to a number that its customers want to rent. - Yahoo! Finance

Battery swapping for heavy vehicles

Occupying less than 5% of the total vehicle fleet, heavy-duty buses and trucks account for about 50% of the transport-related emissions in India. The challenge of electrifying heavy commercial vehicles (HCVs) remains formidable due to their demanding energy requirements and operational complexities. Globally, battery swapping has emerged as a promising solution to electrify heavy vehicles. Battery swapping can be a game-changing opportunity for electrification for buses and trucks in India. It provides several benefits such as affordability, zero downtime, increased productivity by ~30%, alleviated battery obsolescence concerns, and reduced anxiety about battery performance and range. - ET Auto

Toyota and resale value

Toyota and Honda have enviably high resale values. That means they retain more of their purchase prices than any other brand. It has been this way for years. Toyota has topped Kelley Blue Book’s Best Resale Value list eight times since 2014, including the last four consecutive years. Pricing and production discipline, a reputation for quality and durability, and a few other factors keep these brands at the top. Another key is that Toyota and Honda listen carefully to customers and try to build only what they think people will buy. - CNBC

CATL's long-range battery

China's Contemporary Amperex Technology (CATL), the world's largest supplier of EV batteries, seeks to capture growing demand for plug-in hybrids with a new compound battery pack that promises a range of 400 km. "The AB battery system compensates for the shortcomings in sodium-ion batteries and the shortcomings in lithium-ion batteries," Gao Huan, chief technology officer of CATL's China E-car Business, said during a launch event for the Freevoy battery, called Xiaoyao in Chinese. - Nikkei Asia

Image source for banner on top: Trust Territory of the Pacific Islands, Department of Public Affairs, Public domain, via Wikimedia Commons