THE ROAD TO REDUCED EMISSIONS
AUTOMAKERS AGREE WE NEED TO GET THERE, BUT HAVE DIFFERING VIEWS ON HOW WE DO IT
Driving recently invited four leading experts in the world of electrification and emissions reduction to its Road to Reduced Emissions roundtable. As you might suspect, there were some areas of vehement disagreement on the road forward, but there were also some very surprising topics of agreement, enough that even a skeptical Motor Mouth might start to feel (unusually) optimistic.
We talked with Stephen Beatty, vice-president and corporate secretary for Toyota Canada and one of the people responsible for bringing the Prius to Canada 20 years ago, Doron Myersdorf, chief executive of Israeli startup Storedot, which claims to have perfected the fiveminute battery, Don Romano, president and chief executive of Hyundai Canada, and Daniel Breton, chief executive of Electric Mobility Canada and a former minister of the environment for Quebec, the province with the most aggressive pro-electric vehicle regulations in the country.
I think many, if not most, of us would agree reducing the automobile industry’s carbon footprint is absolutely essential for the survival of the business. For those still condemning global warming as a hoax, understand that, for the automotive industry at least, that ship has sailed.
Automakers, according to a 2019 estimation by Reuters, had pledged more than US$300 billion to electrification research. That number may have easily doubled in the interim. Whatever the number, the automotive industry is dedicated to at least the partial electrification of its fleet. The question is no longer whether we should reduce automotive tailpipe emissions, but rather what is the most effective way to accomplish that task?
Basically, there are two camps. On one side are state and provincial governments — typified by California in the United States, and Quebec in Canada — that are pushing the sale of zero-emissions vehicles (essentially electric vehicles and plug-in hybrids or PHEVS). Not only do they incentivize consumers — Quebec sweetens the purchase of an EV up to $8,000, and
that’s on top of the $5,000 the federal government offers — they also mandate automakers sell a minimum number of plug-ins. The fines for not selling enough PHEVS can reach millions of dollars. Tesla, for instance, is expected to make more than US$1 billion this year selling regulatory “credits” to automakers that are not selling enough of their own battery-powered cars in various jurisdictions around the world.
Many automakers — certainly Toyota’s Beatty espouses this theory — would much prefer these same governments set a CO2 reduction target and let the automakers determine the technology best suited to reducing their carbon footprints. As Toyota points out, the CO2 emissions saved by the 16-million hybrids it has sold worldwide far exceeds the carbon reduction by any electric-vehicle automaker, even Tesla.
Others claim that if the government would get behind a national infrastructure program — Hyundai’s Romano espouses mandating all gas stations have at least one fast charger — consumer incentives and punishing automakers for not selling enough EVS would be all
but unnecessary. As Romano points out, his head office has four fast chargers and he constantly sees tow trucks hauling in EVS whose owners fell short of finding a charging station.
Both sides have reasonable arguments. On the one hand, zero-emissions vehicle (ZEV) mandates are easily gamed. For instance Ford could meet its ZEV mandate obligations in Quebec by having its new Mach-e and plug-in Escape represent, say, 10 per cent of it sales. But if the other 90 per cent are all F-150s and Explorers, there hasn’t been much of a CO2 reduction. (Apologies to Ford, I’m just using it as an example.)
On the other hand, Toyota may be correct that a plugin Prius has a smaller overall carbon footprint than a long-range Tesla — mainly because of the emissions released in the production of huge 100-kilowatt-hour batteries — but it’s tough to argue that replacing a Ram with a Rivian won’t be good for the environment.
What’s surprising, however, is that almost everyone on the panel agreed that a ban of pure gasoline-powered cars is unnecessary. As long as the definition of “electrified” includes
hybrids, PHEVS, EVS, and fuel-cell vehicles, both Romano and Beatty think pure gas-powered cars will disappear from their fleet well before the 2035 deadline being proposed.
Where there seems to be vehement disagreement is the notion that automakers are somehow dragging their feet on selling emissions-reducing automobiles. It’s laughable, says Romano, that stockholders would allow automakers to spend all those hundreds of billions of dollars developing EVS and then allow them to hold back on selling these same EVS to consumers.
According to Toyota, much of this misinformation comes from a report prepared by Dunsky Energy Consulting for Transport Canada, which found it “can be very challenging to find a PEV, as only 33 per cent of dealers in Canada have at least one PEV in stock.” But, as Beatty points out, the original Dunsky report was done right after the federal government had initiated its $5,000 incentive for the purchase of an electric vehicle. Throwing money at consumers and then decrying automakers for not having enough supply to meet the sudden demand is hardly fair.
And while it’s true some plug-in vehicles are still in short supply, the problem going forward will likely be demand, not availability. As Romano points out, Hyundai, for one, has plenty of Kona EVS on dealer lots waiting for Canadian homes.
And, seriously, who would dare denigrate Toyota’s commitment to reducing its carbon footprint? The company started selling hybrids long before greenhouse gases were a cri de guerre. Of the 16-million hybrids it has sold worldwide, more than 252,000 were in Canada.
Toyota is now almost five years ahead of its plan to sell 5.5-million electrified cars annually — of which one million will be ZEVS — by 2030.
By 2050, the world’s largest automaker is also promising to reduce the average CO2 emissions from its new vehicles by 90 per cent (compared with 2010) and promises that all its production plants will produce zero emissions as well.
Perhaps even more importantly, the targets automakers are challenged to meet — be they for ZEV sales or actual emissions targets — need to be fixed. The bane of automotive product planning is the changing goalposts of governmental regulation. The Trump administration, for instance, caused quite a bit of consternation when it rolled back the Obama 55-mpg mandate that had been the basis of automaker product planning all the way out to 2025.
Closer to home, Quebec’s latest mid-cycle evaluation of its ZEV mandate seems to congratulate automakers for exceeding their targets, and then threaten them with accelerating regulations for doing so. Fining someone because they don’t meet the targets you set but penalizing them with more stringent conditions when they do is simply poor public policy. It certainly isn’t the most effective way to reduce automotive carbon emissions.
The most important consideration moving forward is the realization that the emissions-reducing technology that works in downtown Toronto — or even suburban Montreal — will not be suitable for, say, rural Saskatchewan or northern Alberta. Even downtown cores in different cities will require different solutions.
Whatever the case, perhaps it’s about time we all agree that automakers are now on board with the idea of reducing tailpipe emissions. How quickly and efficiently they do so will depend on the policies and regulations we saddle them with.