A BAN ON THE INTERNAL

COMBUSTION ENGINE BY 2030.

AN ECONOMIC UTOPIA?

Word count: 34.938

Julien Gombert Emiel Maes Student number : 01303983 Student number: 01308305

Promotor/ Supervisor: Prof. dr. Johan Albrecht

Commissioner: Sam Hamels

Master’s Dissertation submitted to obtain the degree of:

Master of Science in Business Engineering

Academic year: 2017 – 2018

Confidentiality agreement

PERMISSION

I declare that the content of this Master’s Dissertation may be consulted and/or reproduced, provided that

the source is referenced.

Julien Gombert & Emiel Maes

i

Foreword

As the electric vehicles are expected to increase exponentially the coming years, we wanted to broaden

our knowledge in this field, with a specific focus on passenger cars. With this writing, we would like to

thank the people who made this Master’s Dissertation a very interesting part of our Business Engineering

education. First, our special gratitude goes to Prof. dr. Johan Albrecht who has offered the subject and

gave advice while writing our Master’s Dissertation. We also would like to thank Sam Hamels, who also

helped us greatly by giving feedback during our dissertation.

Furthermore, we had the opportunity to interview 22 people who all have a stake in a ban on the in-

ternal combustion engine. Appendix A gives an overview of these interviews. We would like to thank all

the interviewees for their time and for sharing their opinions with us. Some very interesting insights were

gained from them and this helped us greatly while writing the chapters and formulating our conclusion.

ii

Contents

Abbreviations vi

List of tables viii

List of figures ix

Introduction 1

1 Why are countries banning the internal combustion engine? 2

1.1 Pros and cons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.1.1 Environmental impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.1.2 Life cycle analysis conventional car versus electric car . . . . . . . . . . . . . . 4

1.1.2.1 The climate impact of electric vehicles . . . . . . . . . . . . . . . . . 5

1.1.2.2 The availability and use of critical metals for the electric motor . . . . 9

1.1.3 Human health effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

1.1.4 Effect on employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

1.2 Countries to ban the internal combustion engine . . . . . . . . . . . . . . . . . . . . . . 17

1.2.1 Countries that agreed on banning the internal combustion engine . . . . . . . . . 17

1.2.2 European incentives for electric driving . . . . . . . . . . . . . . . . . . . . . . 20

1.3 Cities to ban the internal combustion engine . . . . . . . . . . . . . . . . . . . . . . . . 23

2 Why should countries ban the internal combustion engine starting from 2025? 27

2.1 Possible efficiency improvements for the internal combustion engine . . . . . . . . . . . 27

2.2 Barriers and opportunities for electric vehicles . . . . . . . . . . . . . . . . . . . . . . . 28

2.2.1 Battery electric vehicles in supply . . . . . . . . . . . . . . . . . . . . . . . . . 29

2.2.2 Range problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

2.2.3 Cost of batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

2.2.4 Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

2.2.5 Charging time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2.3 Intentions of stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

2.3.1 Car manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

2.3.2 Suppliers of the battery components . . . . . . . . . . . . . . . . . . . . . . . . 40

2.3.3 Battery manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

2.3.4 Grid operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

2.3.5 Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

iii

3 The battery of the future 44

3.1 The battery of today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

3.1.1 The critical components of a battery cell . . . . . . . . . . . . . . . . . . . . . . 44

3.1.2 How does it work? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

3.2 The suitability of the battery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

3.3 The skyrocketing demand for Lithium-ion batteries . . . . . . . . . . . . . . . . . . . . 50

3.3.1 Ingredients needed to fuel the battery boom . . . . . . . . . . . . . . . . . . . . 50

3.3.1.1 Nickel Manganese Cobalt cathode versus Nickel Cobalt Aluminumcathode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

3.3.1.2 Assessing the supply risks . . . . . . . . . . . . . . . . . . . . . . . . 52

3.3.1.3 Impact of the price of raw materials on the battery pack price . . . . . 55

3.3.2 Recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

3.3.3 Second-life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

3.4 Europe and the battery industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

3.5 Cost evolution of the Lithium-ion battery . . . . . . . . . . . . . . . . . . . . . . . . . 64

3.6 Evolution of the battery technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

3.6.1 Before 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

3.6.2 Beyond 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

4 The role of electric vehicles in the broader energy context 77

4.1 Less import of fossil fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

4.2 Rising demand for energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

4.3 The conventional grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

4.4 Matching supply and demand with the smart grid . . . . . . . . . . . . . . . . . . . . . 82

4.5 Connecting the electric vehicle to the grid . . . . . . . . . . . . . . . . . . . . . . . . . 84

4.5.1 Charging an electric vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

4.5.2 Smart charging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

4.5.2.1 What can be the impact of smart charging in Belgium? . . . . . . . . . 87

4.5.3 Vehicle-to-grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

4.5.3.1 What can be the impact of vehicle-to-grid in Belgium? . . . . . . . . . 90

4.5.4 Where are we today? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

5 A ban on the internal combustion engine in Belgium by 2030. An economic utopia? 94

5.1 Technological . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

5.1.1 Range . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

5.1.2 Charging time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

5.1.3 Technology failure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

iv

5.2 Economic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

5.2.1 Slowdown in sticker price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

5.2.1.1 Sticker price versus total cost of ownership . . . . . . . . . . . . . . . 97

5.2.2 Issues with critical materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

5.2.3 Declining diesel and gasoline prices . . . . . . . . . . . . . . . . . . . . . . . . 100

5.2.4 Interest to buy a battery electric vehicle . . . . . . . . . . . . . . . . . . . . . . 102

5.2.5 OEMs cannot meet the battery electric vehicle demand . . . . . . . . . . . . . . 104

5.2.6 Number of different battery electric vehicle models in supply . . . . . . . . . . . 105

5.2.7 Charging infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

5.3 Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

5.3.1 Considerable policy changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

5.4 Conclusion for Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

6 Further outlook 108

6.1 Connected and automated driving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

6.2 Car sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

6.3 Mobility as a Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Conlusion 115

References xi

Appendices xxxv

A Overview interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxv

B Overview LIB pack price estimates . . . . . . . . . . . . . . . . . . . . . . . . xxxvi

C Overview LIB cell price estimates . . . . . . . . . . . . . . . . . . . . . . . . . xxxvii

D TCO Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxviii

E TCO calculation Volkswagen e-Golf . . . . . . . . . . . . . . . . . . . . . . . . xxxix

F TCO Scenario Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xl

v

Abbreviations

AC Alternating Current

Ah Ampere Hour

AV Autonomous Vehicle

BA Burgerlijke Aansprakelijkheid (type of car insurance in Belgium)

BEV Battery Electric Vehicle

BIV Belasting op de inverkeerstelling (registration tax for a new car in Belgium)

BTU British Thermal Unit

BTW Belasting op de Toegevoegde Waarde (value-added tax in Belgium)

CAGR Compound Annual Growth Rate

CO2 Carbon Dioxide

CO Carbon Oxide

DC Direct Current

DSO Distribution System Operator

EU European Union

EV Electric Vehicle (BEV or PHEV)

FCEV Fuel Cell Electric Vehicle

GDP Gross Domestic Product

GHG Greenhouse Gas

GWh Gigawatt Hour

HC Hydrocarbon

HHI Herfindahl-Hirschman Index

ICE Internal Combustion Engine

kg Kilogram

km Kilometre

kW Kilowatt

kWh Kilowatt Hour

L Litre

LCA Life Cycle Analysis

LIB Lithium-ion Battery

LMO Lithium Manganese Oxide

vi

NCA Nickel Cobalt Aluminum

NdFeB Neodymium Iron Boron

NMC Nickel Manganese Cobalt

NOx Nitrogen Oxide

NPV Net Present Value

MaaS Mobility as a Service

MW Megawatt

MWh Megawatt Hour

OCPP Open Charge Point Protocol

OECD Organization for Economic Co-operation and Development

OEM Original Equipment Manufacturer

OSCP Open Smart Charging Protocol

PHEV Plug-in Hybrid Electric Vehicle

PM Particulate Matter

PV Photovoltaics

REE Rare Earth Elements

REEV Range-extended Electric Vehicle

TCO Total Cost of Ownership

TTW Tank-To-Wheel

TWh Terawatt Hour

V2G Vehicle-To-Grid

VOC Volatile Organic Compound

W Watt

Wh Watt Hour

WHO World Health Organization

WTI West Texas Intermediate

WTT Well-To-Tank

WTW Well-To-Wheel

vii

List of Tables

1 Government policy goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

2 Incentives for electric driving and EV market share per EU member state (1) . . . . . . . 21

3 Incentives for electric driving and EV market share per EU member state (2) . . . . . . . 22

4 Incentives for electric driving and EV market share per EU member state (3) . . . . . . . 23

5 Company policy goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

6 Need for raw materials in 2030 as a percentage of global production in 2016 . . . . . . . 53

7 Supply risk of metals used in battery packs for EVs . . . . . . . . . . . . . . . . . . . . 55

8 Performance targets up to 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

9 Cost targets up to 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

10 Manufacturing targets up to 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

11 Roadmap EV battery technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

12 Probability & Impact matrix for Belgium . . . . . . . . . . . . . . . . . . . . . . . . . 94

viii

List of Figures

1 Global EV sales in thousands, compound annual growth rate (CAGR) . . . . . . . . . . 2

2 Global EV sales as % share of all vehicle sales . . . . . . . . . . . . . . . . . . . . . . . 2

3 EU Emission Regulations Towards 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4 Graphic representation of Well-to-Wheels Analysis . . . . . . . . . . . . . . . . . . . . 5

5 WTW GHG emissions for different electricity production and degrees of electrification . 6

6 Significance of the various life cycle stages . . . . . . . . . . . . . . . . . . . . . . . . 7

7 Influence of national electricity mixes on climate impact of BEVs . . . . . . . . . . . . 8

8 REE production (metric tons - rare earth oxide equivalent) . . . . . . . . . . . . . . . . 10

9 Estimation of NdFeB demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

10 Car manufacturing job projections for 2030 . . . . . . . . . . . . . . . . . . . . . . . . 14

11 The employment impact per sector in Europe of the transition towards low-carbon cars(thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

12 EV market share by country in 2016 expressed in % . . . . . . . . . . . . . . . . . . . . 17

13 EV market share by country in 2017 expressed in % . . . . . . . . . . . . . . . . . . . . 18

14 Lack of charger availability is the main barrier to EV adoption . . . . . . . . . . . . . . 29

15 Battery electric models on the market are expected to increase five-fold by 2021 . . . . . 30

16 EV range as of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

17 Roadmap for high energy batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

18 Costs of LIB packs in BEV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

19 Total number of EV charging positions in Europe . . . . . . . . . . . . . . . . . . . . . 35

20 Alliances are likely to shift as cells commoditize . . . . . . . . . . . . . . . . . . . . . 37

21 The charging of a battery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

22 Battery cell in Tesla Model S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

23 Battery module in Tesla Model S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

24 Battery pack energy density in selected BEV models . . . . . . . . . . . . . . . . . . . 48

25 Global LIB demand in GWh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

26 Overview percentage of different metals in cathode types . . . . . . . . . . . . . . . . . 52

27 Cost sensitivity of an EV LIB pack to commodity prices . . . . . . . . . . . . . . . . . 56

28 Price evolution of Silicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

29 Mining Cobalt out of batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

30 Overview of expected second-life batteries and EV sales until 2030 . . . . . . . . . . . . 60

31 LIB price evolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

32 Boxplot of LIB pack price estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

33 General trend LIB Pack costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

34 Future estimates LIB Pack costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

ix

35 General trend LIB Cell costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

36 Future estimates LIB Cell costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

37 Forecast use of battery technology by BMW Group . . . . . . . . . . . . . . . . . . . . 74

38 Gravimetric energy and volumetric energy of battery technologies . . . . . . . . . . . . 76

39 Amount of oil that EVs are displacing . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

40 World energy consumption in BTU by country grouping . . . . . . . . . . . . . . . . . 80

41 EV electricity demand as a percentage of total electricity demand for a specific Europeancountry in 2050 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

42 The smart grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

43 Smart charging of EVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

44 Working of Vattenfall pilot project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

45 Increasing range of the BEVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

46 Gartner hype cycle for the different battery technologies . . . . . . . . . . . . . . . . . 96

47 TCO and cost per km in euro for three different Volkswagen models . . . . . . . . . . . 98

48 TCO and cost per km Scenario analysis - distance of 15.000 km per year . . . . . . . . . 99

49 TCO and cost per km Scenario analysis - distance of 25.000 km per year . . . . . . . . . 99

50 Popularity "Electric Vehicles" on Google search . . . . . . . . . . . . . . . . . . . . . . 101

51 Lessons from Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

52 Potential for Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

53 Energy market and automotive market becoming intertwined . . . . . . . . . . . . . . . 108

54 Future of Mobility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

55 Consumer interest in a specific automation technology for vehicles . . . . . . . . . . . . 111

56 Mobility through the ages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

x

Introduction

One of the hot topics in 2018 is the one of e-mobility. Governments from all over the world are pushing

car manufacturers to produce both cleaner and more efficient cars. It is hard to meet these strict fuel

efficiency regulations with only an internal combustion engine (ICE) in our cars. Already a lot of the

gains have been tapped out and that is exactly when the plug-in hybrid electric vehicle (PHEV) came

in. But how long will these PHEVs be part of our community? Can this PHEV be seen as a transition

car towards cleaner and zero-emission vehicles or will this PHEV be part of our community for a long

period? It is just a matter of time that battery electric vehicles (BEVs) will cost as much as conventional

ICE cars. The critical driving factor behind this reasoning is the economies of scale. Next to a cheaper

acquisition cost, it will be possible to charge a BEV in only a few minutes and the continuously improving

energy density of the batteries will make sure that it is possible to cover long distances. Furthermore,

the rollout of public charging stations is also happening at a very high pace which is still of utmost

importance. These aspects will make sure some of the BEV barriers can be overcome and the consumer

interest can be shifted in favor of the BEVs. The big push on the policy side, combined with the ongoing

economic trends and technology enablers have started the e-volution.

To address the topic of this dissertation, first an overview is given of why regions, nations or cities

would want to ban the ICE. This first chapter covers the pros and cons of such a ban. Next to this, the

different countries and cities that want to ban the ICE by a specific year are listed. The second chapter

describes why a country or city would want to ban the ICE as from 2025. First, possible efficiency

improvements for the ICE are discussed, next the several barriers for the BEV are discussed. To conclude

this chapter, an overview of the intentions of the different stakeholders is given. The following chapter

addresses questions related to the future of the battery. What is the battery which is being used today?

How do original equipment manufacturers (OEMs) choose a specific battery? Why is there such an

increasing demand for batteries and how is Europe dealing with this? Furthermore, how is the cost of

these batteries evolving and what will be the technologies of the future? The fourth chapter explains what

the role of EVs can be in the broader energy context. Next to this, the working of the conventional grid

and the smart grid is explained. To conclude this chapter, an overview is given of what opportunities exist

when an electric vehicle (EV) is connected to the grid. The next chapter looks at the feasibility to ban

the ICE as from 2030 in Belgium. Here, a detailed look at the technological, economic and political area

will give an answer on this question. The sixth chapter gives a further outlook for the mobility industry.

Connected and automated driving, car sharing and Mobility as a Service (MaaS) are being discussed

here. Finally, a conclusion based on the findings of the previous chapters is given.

1

1 Why are countries banning the internal combustion engine?

As the two figures below visualize, the EVs are on the rise. It is observable that the share of the BEVs

in the total EV sales has been increasing over the last three years. One of the factors why they are

becoming more popular is because countries are planning to ban the ICE. There are many factors that

need to be taken into account regarding the ban on the ICE. This chapter first takes a look at the most

important advantages and disadvantages of the ICE technology. To conclude, an overview is given of all

the different countries and cities that have announced a ban on the ICE.

Figure 1: Global EV sales in thousands, compound annual growth rate (CAGR)

Source: (McKinsey&Company, 2018)

Figure 2: Global EV sales as % share of all vehicle sales

Source: (McKinsey&Company, 2018)

2

1.1 Pros and cons

This section elaborates more on the environmental impact of banning the ICE technology. Next to this,

a life cycle analysis (LCA) of the conventional car versus a BEV is covered. Furthermore, the human

health effects which are present today are being discussed. The last element which is covered in this

section relates to the effect on the employment when governments would ban the production of ICE

vehicles.

1.1.1 Environmental impact

First of all, it is important to zoom in on the environmental impact of the ICE. This dissertation will

focus on the impact of passenger cars. Passenger cars can be defined as motor vehicles, designed to

transport people rather than goods. They can transport one to eight persons. In 2014, global car sales

were about 65 million. In developed countries, almost half of the population owns a car. In developing

countries, the amount of people owning a car is lower. Nevertheless, the rapid economic growth and large

population base in these countries will cause a rise in the global car sales in the future. This growth in

car sales and consequently car ownership gives reasons for concern. A variety of concerns can be seen,

namely: Carbon Dioxide (CO2) emissions, traffic congestion, energy security, resource depletion and

air pollution. Air pollution can consist of particulate matter (PM) or smog and has as consequence the

hazy weather which many large cities are facing nowadays. There are many sources for these problems,

but it can partly be attributed to the increasing exhaust emissions of passenger cars. Climate change

has become a global concern. The International Energy Agency estimated that 16,9% of global CO2

emissions in 2012 was caused by road transport (Hao et al., 2016).

The European Commission (2014) states that cars are responsible for around 12% of total European

Union (EU) emissions of CO2, the most important greenhouse gas (GHG). The EU legislation established

mandatory emission reduction targets for new cars.

The goal of national and local policies is to move towards zero-emission vehicles because they can

significantly reduce GHGs. Figure 3 shows the related EU emission regulations. In 2016, the average

emission level of a new car sold was 123 grams of CO2 per kilometre (km). This level is visualized in

relation to the EU targets below. The average is below the 2014 and 2017 target for passenger cars. How-

ever, if the same result is desired for 2021 and 2025, OEMs will need to come up with new technologies

to meet the stricter emission regulations (World Economic Forum, 2018).

3

Figure 3: EU Emission Regulations Towards 2025

Source: (World Economic Forum, 2018)

With these targets, the EU wants to reduce the CO2 emissions of cars. By substituting the ICE

vehicles with EVs, it would be possible to achieve a cleaner mobility.

When looking at the direct emission of a BEV (which is zero), one can say that this is the optimal

solution to cut CO2 emissions. However, these vehicles need to be charged with electricity and the pro-

duction of electricity still goes hand in hand with the emission of CO2. Consequently, this brings up the

question whether banning ICE vehicles in favour of BEVs would be a solution for the climate problem.

To give an answer on this question, one needs to compare the average emission of producing electricity

with the direct impact of driving an ICE vehicle. In Belgium, the average emission of producing elec-

tricity is about 150 gram CO2 per kilowatt hour (kWh). If a BEV consumes on average 0,2 kWh/km, it

would emit 30 grams of CO2 per km. An economical ICE vehicle emits around 120 gram CO2/km which

means that a BEV emits only one fourth of the emissions of an economical ICE vehicle (Hamels, 2017).

This brings up the idea of an LCA, the following subsection will take a profound look at the LCA of an

ICE vehicle and a BEV. This further elaborates on the environmental impact of mobility.

1.1.2 Life cycle analysis conventional car versus electric car

The automotive industry is facing a major electric transition. It is very important to face the differences

between our conventional car and the upcoming electric car. The debate is about the environmental

performances of the ICE cars and EVs. Are these EVs really more environmentally friendly than the

conventional ICE vehicle (Le Petit, 2017a)? This subsection mainly addresses the climate impact of EVs

4

and the availability and use of critical metals used in electric motors.

1.1.2.1 The climate impact of electric vehicles

An LCA is a commonly used methodology for assessing the environmental consequences of a product

or a system. In an LCA study, all the processes that are environmentally significant throughout the life

cycle of vehicles are considered. These processes are for example raw material extraction, production

of components, assembly, transport, vehicle use and the treatment at the end of the life cycle (Messagie,

2017).

The problem related to the vehicle-LCA literature is the divergent results which are present. This is

caused by variations in system boundaries, the scope of work, differences in assumptions of the Carbon

intensity of the electricity mix used and the lifetime of the vehicle. Also the lifetime of the battery in

a BEV is an important assumption that differs among different vehicle-LCA studies. Next to this, it is

important to mention that there is a difference if the battery is used in a second-life before being recycled.

Another difference between LCA studies is that some studies only consider the Well-to-Wheel

(WTW) performance of EVs, while others take into account the entire life cycle performance (including

production of the battery). The WTW performance of EVs only covers the life cycle of the energy carrier

used to drive the vehicle. This energy carrier is either the fuel or the electricity (Messagie, 2017).

Figure 4: Graphic representation of Well-to-Wheels Analysis

Source: (European Commission, 2016)

WTW studies stress the importance of the Carbon intensity of the electricity production. Also in

such study it is important to differentiate between the degree of electrification of the vehicle, namely full

electric (BEV), range-extended (REEV), or plug in hybrid (PHEV) vehicles (Le Petit, 2017a).

The figure below shows the WTW GHG emissions for different electricity production and degrees

5

of electrification. The purple bars show the performance of BEVs. The red bar illustrates the reference

vehicle, this corresponds to the 2012 EU fleet target for tailpipe emissions of sold cars. Based on the 2015

EU electricity mix, a BEV emits around half of the WTW CO2 emissions generated by a conventional

car. When the vehicle is charged exclusively on coal generation, the emissions are of a similar order, but

can also be higher than the vehicle its reference emissions (Le Petit, 2017a).

CO2 equivalent, abbreviated in the figures of this paragraph as CO2-eq, is a metric measure that

is used for the comparison of emissions from various GHGs. It is based on the GHG respective global-

warming potential. The metric is obtained by converting amounts of other gases to the equivalent amount

of CO2 with the same global-warming potential (Eurostat, 2017).

Figure 5: WTW GHG emissions for different electricity production and degrees of electrification

Source: (Messagie, 2017)

After including the environmental impact of the energy carrier, the same has to be done for the

equipment used in the EV. This would complete the LCA. The complete life cycle of the vehicle can

be summarized into four elements. Namely the Well-To-Tank (WTT) stage, this corresponds to the fuel

supply chain. Next, there is the Tank-To-Wheel (TTW) stage which represents the energy conversion

in the vehicle. The glider accounts for the manufacturing, maintenance and recycling of the vehicle

framework. As last, the powertrain corresponds to the emissions from manufacturing the motor, the

battery and the electronics. These 4 elements are shown on the figure below for a BEV and a diesel

vehicle (Messagie, 2017).

6

Figure 6: Significance of the various life cycle stages

Source: (Messagie, 2017)

Figure 6 details the contribution of different parts of the battery electric and diesel vehicles to the

total vehicle GHG emissions. For the BEV, the WTT stage corresponds for about 70% of the total impact.

The production of the battery and the glider have an equal impact which sums up to the remaining 30%.

Thus for the BEV, the production of the vehicle corresponds to 30% of the total emissions while for the

diesel vehicle this is less than 10%. For the diesel vehicle, 75% of the emissions originate from the TTW

stage, this is the process of energy conversion in the vehicle. The conclusion which can be drawn from

this is that the climate change impact of a diesel car amounts to 230% that of a BEV. The following

assumptions were made for both vehicles: a life time driven distance of 200.000 km and a weight of the

glider of 1.200 kilogram (kg). The glider refers to the framework of the vehicle, it is the car without

the powertrain. The BEV is assumed to have a real-life electricity consumption of 0,2 kWh/km and a

30 kWh Lithium Manganese Oxide (LMO) battery. Furthermore, 1,5 battery replacement is assumed to

be needed over the life time of the vehicle. For the diesel vehicle, 120 gram CO2/km on NEDC1 is the

reference emission. This is augmented with 35% to reflect real life driving conditions (Messagie, 2017).

The EU 28 mix of 2015 emits 300 gram CO2/kWh. The cells are manufactured outside of Europe with a

high Carbon electricity source. It should be noted that the battery manufacturing process could improve

in the coming years, cells could be made using largely renewable electricity. This would mean a 65%

reduction for the impact of battery manufacturing on the LCA of a BEV (Le Petit, 2017a).

1NEDC is the New European Driving Cycle, it is a standard driving cycle used to measure vehicle emissions in the EU(Verband der Automobilindustrie, 2016). The NEDC was active until September 2017. As from then, the WLTP (WorldwideHarmonised Light Vehicle Test Procedure), which is based on real-driving data has become active.

7

Figure 7: Influence of national electricity mixes on climate impact of BEVs

Source: (Messagie, 2017)

Figure 7 shows that the sources of the electricity production have the greatest impact on the LCA

climate performance of BEVs and differs widely between countries depending on electricity mixes. It is

apparent that even in countries with the highest GHG intensity of electricity generation, the BEV achieves

a better result on a lifecycle basis compared to the benchmark conventional diesel vehicle. Looking at

Poland, a BEV would emit 25% less CO2 over its lifetime. Sweden has the lowest grid average Carbon

intensity in this figure, driving a BEV in Sweden has an 85% lower GHG footprint compared to the

benchmark conventional car (Le Petit, 2017a).

The energy source has thus an enormous impact on the vehicle Carbon footprint. Renewable energy

sources such as wind and solar energy, lead to the greatest savings. Electricity mixes which rely on

natural gas and hard coal, increase the climate impact of BEVs. In the future, more renewable energy

sources will be entering the grid, this means that the LCA of EVs is only going to improve in the coming

years. Renewable-based battery manufacturing and new chemistries that require less critical, energy

intensive metals will further optimize the LCA of EVs.

Another important factor to take into account in the LCA is what happens with the battery at the end

of the EV its lifetime. When more EV batteries are produced and cars reach the end of their lifetime,

a market will come up for second hand batteries. The batteries will be used in stationary storage appli-

cations in their second-life. This reuse will extend their lifetime before eventually being recycled. This

means that the batteries will be depreciated over a longer period, further reducing the emissions of the

battery production. Reusing and recycling the batteries are in addition two sustainable solutions to lower

8

the demand for critical metals (Le Petit, 2017a). Subsections 3.3.2 ’Recycling’ and 3.3.3 ’Second-life’

elaborate more on these topics.

1.1.2.2 The availability and use of critical metals for the electric motor

This paragraph will focus on the metal availability and use for the electric motor. In a further paragraph,

3.3.1.2 ’Assessing the supply risks’, the use and available metals to produce the EV battery is described.

The production of EVs requires the use of critical metals, just as other high-tech applications. These

critical metals include rare Earth elements (REE). In the EVs of today, a Lithium-ion battery (LIB)

is used. These need Lithium, Graphite and cathode materials such as Cobalt, Manganese, Nickel or

Aluminum as input. For the electric motors, REE are needed. This is a group of 17 chemical elements

which are not especially scarce, but are only available in small amounts spread over the Earth’s crust (Le

Petit, 2017a). All of the REE are metals. They are often also referred to as the rare Earth metals. Because

many of them are sold as oxide compounds, they are also referred to as rare Earth oxides (King, 2018).

The production of high-performance electric motors requires Neodymium Iron Boron permanent

magnets (NdFeB). These magnets are made of Neodymium (Nd), Praseodymium (Pr) and Dysprosium

(Dy) which are all REE. In 2015, 50% of the global demand for REE came from magnets needed for the

production of permanent electric motors, these are used in most EVs (Le Petit, 2017a).

Global reserves of REE are estimated by the European Commission to be at more than 80.000.000

tons, whereas average yearly production between 2010 and 2014 equals 135.650 tons. The mining of

REE is difficult because of the fact that REE are rarely found in high concentrations. These concentra-

tions are almost never high enough to allow profitable economic extraction. The availability is different

for each individual REE. The availability is based on known geologic reserves and security of supply is-

sues. The US Department of Energy found a risk of supply constraints for Neodymium and Dysprosium

which are the two main components of electric magnet rotors (Le Petit, 2017a).

The figure below shows that China supplies around 80% of the available REE. The supply is thus not

diversified and this may be a source for concerns for the EU. Trade arrangements are necessary to ensure

availability for EU producers (Le Petit, 2017a).

9

Figure 8: REE production (metric tons - rare earth oxide equivalent)

Source: (King, 2018)

As supply reduces, prices increase. This is a threshold for the companies controlling the supply

to sell. Also mining companies see high prices as an opportunity to develop new sources of supply.

However, opening a new mining property can take several years or longer. When a single country controls

almost all of the supply side and decides not to export, the supply chain can become a bottleneck. China

restricted in 2010 the export of REE. This was done for domestic manufacturing and for environmental

reasons. This event triggered sales to go up and made the prices increment exponentially (King, 2018).

It is hard to predict how the global demand for REE will evolve. The International Energy Agency

estimates that in 2020 global sales of EVs will amount to 7,2 million (Le Petit, 2017a). By looking at the

quantity of permanent magnets produced, it is possible to assess the demand for REE. By doing this, one

needs to assume that the composition of NdFeB magnets remains constant until 2020 (Le Petit, 2017a).

Next to this, the assumption that all EVs make use of this NdFeB-PSM2 technology holds as well.

2PSM stands for permanent magnet synchronous-traction motor.

10

Figure 9: Estimation of NdFeB demand

Source: (Pavel et al., 2017)

The figure above shows that the NdFeB magnet demand is forecasted to be 15 times higher in 2020

than in 2015.3 Despite this remarkable growth rate, shortages are improbable (Le Petit, 2017a).

Although the chances of having shortages for REE are low, substituting these materials in the pow-

ertrain is the best long term strategy towards a sustainable use of critical materials according to the Eu-

ropean Commission’s Joint Research Center (Pavel et al., 2017). Replacing or reducing the use of REE

in the electric motor is already possible. Examples of innovations where this occurs are asynchronous

motors and electrically externally excited synchronous motors. Another initiative is the fact that OEMs

are also investing in electric motors that contain less REE. For example, BMW Group has developed a

hybrid motor using about 30 to 50% less REE (Le Petit, 2017a).

(Interview 14) unveiled that there might be a problem in the short term if the prices of REE go up.

However, taking into account the development of new innovations in electric motors, the demand for

REE in five years will not be as high as today.

As already discussed, recycling is another strategy that promotes a sustainable use of critical materi-

als. After BEVs become more widespread, a recycling industry can more easily emerge. This will enable

the re-use of the critical metals (Le Petit, 2017a).

3PM in this figure stands for permanent magnet.

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1.1.3 Human health effects

Another negative impact of ICE vehicles is related to the harmful human health effects. Traffic conges-

tion leads to higher vehicle emissions and this results in poor air quality. Over the past 20 years, traffic

on roads has significantly increased. Air pollutants, including Carbon Oxide (CO), CO2, volatile organic

compounds (VOCs) or Hydrocarbons (HCs), Nitrogen Oxides (NOx), and PM, are mainly formed due

to vehicle emissions. Traffic congestion has an increased severity and duration. This has the potential

to greatly increase pollutant emissions and to degrade air quality, particularly near large roadways. Re-

cent studies have shown that there is an increase in morbidity and mortality for drivers, commuters and

individuals who live near major roadways (Zhang and Batterman, 2013).

Poor air quality increases respiratory maladies like asthma and bronchitis. It also rises the risk of

life-threatening conditions like cancer. PM is responsible for up to 30.000 premature deaths each year.

In 2013, more than half of the CO and NOx, and almost a quarter of the HCs that were emitted in our air

were caused by transportation (Union of Concerned Scientists, nd).

As a consequence of air pollution events, for example the London fog in 1952, some studies were

executed in order to investigate the effects of air quality changes on human health. A consistent finding

is that air pollutants support elevated mortality and hospital admissions. The human health effect can go

from nausea, difficulty in breathing and skin irritation to cancer. Another side effect are birth defects,

developmental delays in children and reduced activity of the immune system. The latter contributes to

a higher number of diseases. Mostly the cardiovascular and the respiratory system are affected, but also

the function of other organs can be affected (Kampa and Castanas, 2008).

1.1.4 Effect on employment

It is furthermore important to mention what the possible effect of a ban on the ICE would be on the

current jobs in the automotive sector. The concern which is raised here, is partly because BEVs contain

significantly less components than cars with an ICE. A second reason for concern is that if the car

industry would only produce BEVs, this would result in some reductions in employment, particularly in

the supply chain sector.

In the following part, the main focus will be on the situation in Europe. A shift towards e-mobility

would reduce Europe’s dependence on oil. The biggest customer of oil is the transportation sector. In

2015, Europe spent around 215 billion euros on crude oil and diesel imports (Le Petit, 2017b). This

money flows out of the EU economy. Any shift in spending from buying imported oil to other spending

choices creates employment. This is because the oil production and distribution has very low employ-

12

ment intensity. By shifting more towards areas of the European economy rather than importing fossil

fuels, employment would increase with 500.000 to 850.000 jobs by 2030. This is the net employment

impact. Next to the employment impact, it is predicted that it could result in a 1% increase in gross

domestic product (GDP) for the EU. These statements can be explained by three factors. First, high

quality jobs in research and development would be created because of the additional technology in the

automotive sector. Second, the additional infrastructure investment. The third reason is that there would

be higher general consumer spending. This is because the running costs over the lifetime of an EV are

lower and more than offset their higher purchase price (Le Petit, 2017b). A shift in sales towards BEVs

results in important changes in the automotive value chain and the required competences. Consequently,

this will result in some loss of jobs in the automotive sector. However, there will be net positive effects

in the economy. An ICE vehicle requires 1.400 components while a BEV only needs 200 components.

This leads to different manufacturing processes and job losses when only focusing on the manufacturing

of BEVs (ING, 2017).

Another impact on the automotive sector are the significant transformations that the supply chain

will undergo. First, the traditional suppliers will have to adapt the parts they are supplying. This will

go from parts such as gearboxes, exhaust pipes, or injectors to parts such as battery materials, electric

motors, regenerative braking systems, etc. There will also be the development of new relationships with

suppliers such as battery manufacturers and mining companies.

Net jobs will not be lost, but they will incrementally change. Current employees, engineers and

skilled workers will need additional training to match the automotive sector’s evolving needs. The tran-

sition towards EVs would lead to an impact on 600.000 jobs in Germany alone (Reuters, 2017). This is

a quantification of the potential loss, ignoring job creations in other sectors (Le Petit, 2017b).

Le Petit (2017b) fears that the potential job loss from banning the ICE technology is not the greatest

risk. More important is the fact that these EVs are not produced in Europe. The manufacturing of the

vehicles occur traditionally close to the market. The biggest EV market now is located in China, also its

market is growing rapidly in order to export EVs on a global scale. The figure below shows the scenario

of a 35% shift to EVs by 2030 and what the impact would be on employment in the EU. If European

OEMs do not start with the EV production such that only 10% of the EVs are manufactured in Europe,

jobs in the automotive sector could amount to only 72% of current employment levels. Other scenarios

are visualized in the figure below. The greatest challenge for Europe is to keep up with China in order to

minimize the losses in GDP.

13

Figure 10: Car manufacturing job projections for 2030

Source: (Le Petit, 2017b)

The question if Europe could become a net importer of electric cars fits in this part. In 2016, China

sold 146.720 BEVs which makes it the largest market for electric cars in the world. The European market

follows due to high sales in Norway (84.520) (Le Petit, 2017b).

Le Petit (2017b) states that a EU zero-emission vehicle sales target (as part of the forthcoming car

CO2 regulation for post 2020) is the solution with a target of 15-20% sales by 2025. This would be an

incentive for domestic investments in EV production, a tool for maintaining European manufacturers’

competitive advantage in the automotive sector, and consequently lead to job creation in the EU.

The previously mentioned concerns are confirmed in the work of Peter Harrison, Transport Director

of European Climate Foundation (Harrison, 2018). The paper ’Fuelling Europe’s Future’ analyses the

different factors which are present within the transition towards low-Carbon vehicles. Especially the

economic impacts that could occur in the future are interesting to look at.

According to the paper, there would be an increase of PHEVs, fuel cell electric vehicles (FCEVs)

and BEVs in the coming years. This leads to the first economic impact for Europe. The expansion of

PHEVs and FCEVs, which is expected to occur during the 2020s, causes a boost in investment in capital

assets. This investment in automotive technology generates additional value for Europe. These cars are

generally more expensive for consumers, but the cheaper fuel can offset this difference. By looking at the

rise in the production of BEVs, there is argued that this would lead to less value for Europe compared to

the value that Europe gains from the petrol and diesel cars. However, this depends strongly on the degree

to which battery cells are imported. On the other hand, additional value is created by the investment in

14

the charging infrastructure for BEVs which could balance out the lost value.

The second economic impact is an efficiency gain all over the road transport system. The higher

efficiency is due to improved combustion engines, more hybrid vehicles and the more efficient electric

motors. Looking at the current and future climate policies, these developments are unavoidable. A more

efficient road transport system means that the mobility costs for households shrink and thus allows them

to shift their spending towards other areas.

The third economic impact is the fact that Europe will start capturing a greater share of the value

from energy used in mobility. This is due to the lower use of petroleum which is imported into Europe

and the higher use of electricity and hydrogen which are generally formed domestically.

In general, the economic impact is sensitive to the location where battery cells are produced in the

future and to changes in the future oil price. The latter learns us how much the avoided spending on oil

imports is worth.

The impact on employment is connected to changes in value-added between sectors and to employ-

ment intensity between sectors. This means that the current value that sectors are delivering will change

and that the employment rates of certain sectors will decrease or increase. Independently of the transition

towards low-Carbon vehicles, there is a trend towards a higher degree of automation in the car industry

which leads to less jobs overall. Furthermore, there is the fact that BEVs are expected to be less labour-

intensive than ICE vehicles, while PHEVs and hybrids are expected to be more labour-intensive. One

can conclude that the net impact on the employment will build upon the balance achieved between the

different vehicle technologies and upon the degree to which they are imported or produced in Europe.

According to (Harrison, 2018), there will be a net increase in employment in the construction, elec-

tricity, hydrogen, services and manufacturing sector. On the other hand, employment in the automotive

manufacturing sector is increasing until 2030, but declines from there on. The figure below shows the

employment impact per sector in Europe of the transition towards low-Carbon cars. The dashed lines

indicate the enlarged uncertainty after 2030. As one can see, the net auto sector jobs increase in 2030.

This is due to the fact that diesel and gasoline engines are built to greater levels of sophistication and

efficiency to meet climate goals and to the increasing distribution of hybrids, PHEVs and FCEVs. The

latter ones consist of a higher technological complexity. By 2035, the hybrids are on a higher degree

replaced by BEVs which are less complicated to build and thus imply less jobs (Harrison, 2018).

15

Figure 11: The employment impact per sector in Europe of the transition towards low-carbon cars (thou-sands)

Source: (Harrison, 2018)

These concerns are noticed by the European Commission. They state that Europe wants to push

the production of batteries. The European Commission wants multiple big factories producing batteries

for EVs. This is necessary to catch up with the Asian competition. The European Commission says to

further guarantee financial incentives and other regulations for the companies willing to invest. This was

announced by Maros Sefcovic, European Commissioner of energy, in October 2017 (Koot, 2017).

Only 2,5% of the batteries used in EVs are European. European companies as Solvay, Umicore,

Siemens, BASF and Renault are worried about this and helped the European Commission come to a plan

to get Europe back on track. In contrast, 55% of the batteries used in EVs Chinese ones.

A European production would also be favorable for the European companies that produce parts of a

battery. For example, Umicore that produces the cathodes, Solvay that supplies the salts and polymers

which make the batteries better, safer and longer lasting for a lower cost.

This initiative must support the entire European industry. European OEMs such as Volkswagen

and Renault, that are investing in e-mobility, would rather have more choice in choosing their battery

producer. Now, they are limited to Asian and American players. Investing in the battery production is

thus necessary and promising for the European companies (Koot, 2017).

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1.2 Countries to ban the internal combustion engine

This section is separated into two subsections. The first subsection identifies countries with a specific ac-

tion plan regarding the ban on ICE technology. The second subsection gives an overview of the European

incentives for EVs.

1.2.1 Countries that agreed on banning the internal combustion engine

The purpose of this subsection is to give an overview of the countries that agreed on banning the ICE.

The goal is to make a list of the countries with a specific action plan.

The first figure below represents the EV market shares4 of 2016 for some of the leading countries.

The second figure below shows the same, but for 2017. Additionally, the second figure shows the division

between the BEV and PHEV shares per country.

Figure 12: EV market share by country in 2016 expressed in %

Source: Reproduced from (Nelson, 2017)

4Throughout the dissertation, the term EV market share denotes the share the EVs have in the total new car sales for aspecific year.

17

Figure 13: EV market share by country in 2017 expressed in %

Source: Based on data from (European Alternative Fuels Observatory, 2018; EV Adoption, nd; Manthey, 2018b)

The enumeration starts with the Netherlands. On the 10th of October, 2017, the Dutch government

presented a detailed plan for the coming years (Lambert, 2017b). The main goal is banning all petrol-

and diesel-powered cars in favor of battery-powered vehicles (BEVs) by 2030. This means that all new

sold cars should be emission-free as from 2030. The Netherlands now has a less than two percent market

share for EVs. One would say that they still have a long way to go to achieve its goal. However, it is a

small market for cars with about only 500.000 passenger cars sold each year. A thorough zero-emission

mandate combined with several new electric cars coming to market soon, could make the goal achievable

(Lambert, 2017b).

The Scandinavian country, Norway, has a very ambitious goal for new vehicles sales to be emission-

free as from 2025 (Nelson, 2017). Norway has offered some remarkable incentives to encourage people

to buy electric cars over the years. No city tolls, free parking, free charging, and permission to drive in

bus lanes. Norway is by far the world leader in electric cars. In 2017, almost 40% of the new sold cars

were either BEVs or PHEVs (European Alternative Fuels Observatory, 2018).

France announced on the 6th of July, 2017 it would end sales of gas and diesel cars by 2040 (Ewing,

2017a). It is remarkable that the plan is less ambitious than that of the Netherlands and Norway. France

got some criticism regarding that fact. Cars usually last about 15 years, this means that with the target of

France, gasoline and diesel cars will be on the road until 2055 which is too long to meet France’s own

climate change goals. This was stated by Greg Archer, director of clean vehicles at T&E. Expressions

18

like these can boost companies to dedicate more resources to developing EVs, and encourage investors

to invest into clean transportation start-ups. However, announcing the plan is not enough, it is essential

for France to follow up with incentives and regulations that encourage the use of electric cars. There

were no specifics about how the government is planning to meet its target. Sales of electric cars have

been growing fast in France, Renault sold 17.000 of its battery powered ZOE compact cars in the first

six months of 2017 which is almost as many as in 2016 (Ewing, 2017a).

Also The United Kingdom announced a ban on the sales of new gas and diesel cars by 2040. This

announcement was done the 26th of July, 2017 (Castle, 2017). This is part of the plan to reduce air

pollution and fight climate change by promoting electric cars. Also here it is remarkable that the plan is

less ambitious than that of the Netherlands and Norway. The goal of the target is to end sales of new gas

and diesel cars and vans by 2040. There is also mentioned that the government will make 255 million

pounds available for local governments to take short term action to reduce air pollution. The measures

of Britain have particular political significance because of rising concern of the level of air pollution,

mainly in big cities such as London. Poor air quality is estimated to cause between 23.000 and 40.000

deaths nationwide every year. The assistant professor of global energy at Warwick Business School,

Frederik Dahlmann, commented on the announcement and sees this as an important step that sets a clear

long-term target. Furthermore, it gives car buyers an incentive to consider the different types of engine

options available in light of the long-term development of the market. However, the question of ’How

does the government intend to improve air quality and reduce transport related emissions in the short

term?’ remains unanswered. Other critics argued that the government was failing to tackle the current

pollution crisis (Castle, 2017).

Scotland also made a plan to phase out the ICE. On the 11th of September 2017, the First Minister

stated that Scotland wants to phase out new petrol and diesel cars and vans by 2032 (Gray, 2017). This

target is thus eight years ahead of the rest of the UK. The main reason mentioned is the air pollution in

the cities and the massive environmental damage that fossil-fuel-powered vehicles are causing. Detailed

plans of action should follow this statement. Already mentioned was that Scotland will enlarge the

amount of charging points in rural, urban and domestic settings. Also will they encourage people to buy

electric or ultra low-emission vehicles (Gray, 2017).

India, as one of the most polluted countries of the world, has announced to only sell electric cars

as from 2030. This was announced by the energy department of India in the beginning of June 2017.

The energy minister states that they will start with offering subsidies to facilitate the electric car effort

(Wattles, 2017).

In Germany, the debate is still going on. Angela Merkel hinted in August 2017 that it is only a matter

19

of time before Germany will follow France, the UK and other countries in banning the ICE (Thompson,

2017). Other sources mention that stopping sales of new combustion-engine cars by 2030 has gained

support in the Bundesrat of Germany. The Bundesrat is the country’s upper house of parliament (Tailor,

2016).

Also in Belgium, there is a debate going on regarding the ban on the ICE. To stimulate electric

driving, the government wants to provide one public charging point for every 10 EVs. Next to this, it is

mentioned that by 2030 half of the new cars sold should not emit any CO2 (Adriaen, 2017).

This enumeration exposes that actually only the Netherlands and Norway came up with a concrete

action plan to ban the ICE. The other countries announced their target, but did not really publish their

strategy of phasing out ICE vehicles.

The table below gives an overview of some other countries and their goals regarding vehicle sales.

This can be seen as an addition to the previous enumeration.

Table 1: Government policy goals

Source: Reproduced from (Cembalest, 2018)

1.2.2 European incentives for electric driving

In this subsection, an overview of the European countries and their main incentives regarding stimulating

electric driving are listed. For each country, the GDP per capita, the market share for EVs and the

incentives are given.

20

Table 2: Incentives for electric driving and EV market share per EU member state (1)

Source: Based on data from (European Alternative Fuels Observatory, 2018)

21

Table 3: Incentives for electric driving and EV market share per EU member state (2)

Source: Based on data from (European Alternative Fuels Observatory, 2018)

22

Table 4: Incentives for electric driving and EV market share per EU member state (3)

Source: Based on data from (European Alternative Fuels Observatory, 2018)

Some conclusions can be drawn from this comparing exercise. First of all, it appears that the market

share of EVs is only substantial if the government offers extensive incentives. Also the big differences in

incentives given between the different countries is remarkable. Notable is that Bulgaria, Estonia, Malta

and Poland do not offer any incentives at all (European Automobile Manufacturers Association, 2017).

Mostly, incentives such as tax reductions and exemptions are used. Austria and Germany are two ex-

amples of this. Also bonus payments and premiums for the buyers of EVs are frequently offered, for

example in France and the UK. Tax measures like these are important tools in shaping consumer demand

for breakthrough technologies, most importantly in their introduction phase. For EVs, the market pene-

tration is difficult because of the low volumes and the significant cost premium over a conventional car.

These barriers need to be canceled out by a positive policy framework (European Automobile Manufac-

turers Association, 2018).

1.3 Cities to ban the internal combustion engine

There is a general consensus that diesel vehicles are a source of air pollution. According to the World

Health Organization (WHO), air pollution is the biggest environmental health risk. Outdoor pollution

that originates from traffic fumes and coal-burning, and indoor pollution from wood and coal stoves

kill more people than smoking, road deaths and diabetes together (Vidal, 2014). According to Unicef,

especially children are at risk. Children breath faster than adults and the cell layer in their lungs is more

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permeable to pollutant particles. There is also a risk of permanently damaging cognitive development as

the tiny pollutants can cross the blood-brain barrier which is less resistant in children. Pregnant women

that inhale the particles can even influence their unborn babies. The particles can cross the placental

barrier and affect in this way the fetus. Two billion children live in places where outdoor air pollution

is higher than the WHO limits, this is almost 90% of the world’s children (Carrington, 2016). One of

the biggest contributors to ill health and global warming is coming from diesel vehicles. The United

Nations stated that more than nine out of ten people live in areas where air pollution outruns the WHO

safety limits. This has led to the announcement in 2016 that some of the biggest cities in the world would

start banning diesel cars from their roads. Paris, Madrid, Athens and Mexico city are willing to ban

polluting cars and vans by 2025 (Harvey, 2016). In Paris, starting from 2030, a ban will be laid upon all

gasoline and diesel engine cars. Diesel cars made before the year 2000 which have a higher impact on air

pollution than newer models, are already banned. In Madrid, 24 of the city its busiest streets are being

redesigned to free them of car traffic. Urban planners are trying to make central Madrid a pedestrian

zone within the next five years. Another initiative is that high-emission vehicles will have to pay a higher

parking fee (Zimmermann, 2018). In Mexico city, it is already prohibited for several cars to drive into

the city center for two days every work week and two Saturdays per month. There is a rotation system

based on license plate numbers in place. This policy affects two million cars and helps to reduce high

smog levels (Garfield, 2018).

Other cities also start putting up action plans to reduce NOx and fine-particulate air pollution in their

city centers. There is not such a thing as a one-size-fits-all model. Different cities apply different mea-

sures. Many cities ban ICE cars from the roads in emergency situations, when air pollution is seriously

elevated. For example in Oslo on the 17th of January 2017, diesel cars were banned (Zimmermann,

2018). This caused traffic to be reduced by 30% and air pollution by 25%. Later that year in June, Oslo’s

counselors settled to start phasing out diesel cars out of the city center. By 2019, parking places in the

center should be banned. Another commitment was to invest heavily in public transport and focus on

bicycle traffic. Copenhagen on its turn is trying to make cycling into the city center easier and cheaper

than driving a car. It is also one of the most bicycle-friendly cities in the world. The mayor of Copen-

hagen wants to propose legislation to ban new diesel cars already by the beginning of 2019. A completely

different initiative is set up in Helsinki, the capital of Finland. The city is investing in a 10-year plan

to create a networked ’mobility-on-demand system’ that will integrate all forms of public and shared

transport. Buses, driverless cars, point-to-point mini-buses, urban bike-shares and even ferries will be

accessible through a smartphone app. The goal is to make this system so good that it would make private

cars too expensive and inconvenient (Zimmermann, 2018).

London is also starting up initiatives to tackle air pollution. The mayor first wants to increase the

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congestion charge for diesel cars (Graham, 2014). Counselors want the roads to be car free in the morn-

ing and evening rush hours. This would reduce the exposure to a bad air quality and make the streets

preserved when people are walking and cycling to and from work and school (Smith, 2018). Eventually,

London wants to ban diesel cars by 2020 (Garfield, 2018).

In the beginning of 2018, environmental campaigners had sued many German cities regarding the

duty to reduce air pollution and to protect people’s health. The levels of air pollution that were imposed

by the EU were not met in Germany. After this, in February 2018, a German court has decided that cities

can impose driving bans on the oldest and most polluting diesel cars. Cities now have the right to imple-

ment a ban (Batchelor, 2018). Stuttgart is one of the most polluted cities of Germany. Also Stuttgart can

now ban diesel cars from driving in the city center to improve air quality (Bennhold, 2018). Stuttgart and

Düsseldorf will probably implement the first bans on diesel cars in September 2018. Stuttgart already

announced in 2017 to keep diesel vehicles that do not meet emissions standards out of the city center

on high-pollution days (Garfield, 2018). Also Hamburg has plans to lower CO2 emissions from diesel

cars. The city wants walking and biking to be the dominant mode of transport. Cars will not be able

to enter certain areas. By 2035, a green network will cover 40% of Hamburg, this network will consist

of connected spaces that people can access without cars (Garfield, 2018). In the capital of Germany,

Berlin, all gas and diesel vehicles that fail to meet national emission standards are banned in a certain

area. This low-emission zone covers 34 square miles and affects one-third of Berlin’s citizens. The city

is also building many bike super-highways (Garfield, 2018).

Italy is following Germany. The mayor of Rome announced that the city has decided to ban the

use of diesel cars in the historic city center starting from 2024 (Dow, 2018). The main reasons for this

restriction are the damage to historical landmarks, damage to the citizen’s health and the fact that Rome

wants to help in the fight against climate change. It is estimated that 3.600 monuments in Rome are at

risk of damage from diesel pollution (Dow, 2018).

In China, namely Chengdu, it will be easier to walk than drive. The streets will be designed in such

way that people can get anywhere by foot in 15 minutes. Architects from Chicago designed this new

residential area for the Chinese city (Garfield, 2018).

In Bogotá, Colombia, the local government implemented the ’Pico y Placa’ 5 program. This program

bans certain cars from driving during the peak traffic hour. This restriction only applies to certain vehicles

on certain days of the week, depending if their license plates are even or odd (Garfield, 2018).

The capital of Belgium, Brussels, has the second largest car-free zone in Europe, following Copen-

hagen. Most streets that surround the city center have always been pedestrian-only. Diesel cars made

5’Peak and Plate’

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before the year 1998 will be banned out of the city, this was announced in January 2018 (Garfield, 2018).

The low emission zone in Brussels is valid for the whole region of Brussels. Cars that are too polluting

are banned from the zone and risk a fine of 350e. Brussels was not the first Belgian city to implement a

low emission zone. Antwerp was even earlier, however, the low emission region is smaller in size (De

Tijd, 2017a). The policy started on the first of February 2017. The low emission zones prohibit certain

vehicles that do not meet environmental criteria. Mainly old diesel cars belong to this group. Banning

these cars out of the city should lead to a better air quality. The implementation of the low emission

zones are in response to stricter European guidelines regarding air quality (Stad Antwerpen, 2018).

It is interesting to see that already many of the big cities are implementing a ban on the polluting cars.

Some cities are not yet planning such a car ban soon, but do want to increase the number of pedestrian

areas, bike lanes and facilitate public transport (Garfield, 2018).

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2 Why should countries ban the internal combustion engine starting from

2025?

BEVs will be able to stand on their own feet as from 2024. In that year the puzzle will be completed,

all pieces will fit together (ING, 2017). Starting from then, BEVs will become the rational choice for

motorists in Europe. In the period between today and 2024, it is expected that the barriers to BEV

adoption will be broken down. The barriers that are taken into account are the infrastructure, range, price

and total cost of ownership (TCO). Ultra fast charging along the highway, meaning a 300km range in

20 minutes will be possible. From 2020 onwards, the higher energy density of batteries will meet the

expectations of customers. Ultimately, in 2024, there will be a TCO parity between the high range BEV

and an ICE vehicle. However, in order for this scenario to be feasible, manufacturers and suppliers need

to take advantage of economies of scale. New battery technologies need to further increase the energy

density and range while reducing the manufacturing cost and last but not least, government support for

BEVs is an essential ingredient (ING, 2017).

In addition to the literature study, also 22 interviews were conducted with experts who have a stake in

a ban on the ICE vehicles. The interviewees can be found in Appendix A. Several conversations with the

different stakeholders were held in order to fill the gaps which were found during the literature study. Ex-

perts from different areas were contacted. Some of the most important areas relate to car manufacturers,

distribution system operators (DSOs), researchers, governments, battery component manufacturers and

EV charging infrastructure manufacturers. By doing this, the different opinions and visions regarding

the future of electro-mobility can be described and this gives a nuanced overview of the different factors

that are influencing the BEV sales.

2.1 Possible efficiency improvements for the internal combustion engine

The energy outlook of the oil giant BP (2017b) forecasts a BEV fleet of 100 million in 2035 which

would reduce the growth in oil demand by 1 million barrels a day. On the other hand, they say that the

increase in efficiency of the ICE technology will reduce the growth of oil demand by something close to

16 million barrels per day. This makes the increase in the amount of BEVs not really a game changer.

An article in the New York Times states a similar scenario: people all know that EVs will have a

considerable role in the mobility of the future. The only question which remains is how large will that role

be and how quickly will the shift towards electrification happen (Mayersohn, 2017)? Gas- and diesel-

powered engines are not replaced yet. Mazda announced a breakthrough in the ICE technology that

could improve its efficiency. John Heywood, professor of mechanical engineering at the Massachusetts

27

Institute of Technology, forecasts that combustion engines will be present in 60% of light-duty vehicles

by 2050. These ICE vehicles will often be working with electric motors in hybrid systems and will

mostly be equipped with a turbocharger. BEVs will take up 15 of sales according to him (Mayersohn,

2017).

Recently, Bosch came with a new tailpipe improvement to safe the diesel ICE technology. With

the help of artificial intelligence, emissions can be reduced to a fraction of what is legally permitted.

However, the new technology will not reach the current market yet. It can only be applied in new

vehicles and carmakers are not yet integrating the technology. Hence, it can take several years before

this technology is fully developed and applicable (Penders, 2018).

An interesting point of view was highlighted during the conversation with Stefan Elfström of Volvo

Cars (Interview 21). There is a general consensus that the ongoing electrification of mobility goes along

with an increased infrastructure cost. However, one cannot forget that future, harsher emission reg-

ulations will imply higher costs for OEMs to make the ICE technology comply with the regulations.

The cost to adapt the ICE to future emission regulations is increasing. Together with this trend, the

cost for producing EVs is going down. On the other hand, OEMs still need to invest in improving the

ICE technology as the future will not hold one optimal solution, mobility will consist of clean ICEs in

combination with EVs.

Other initiatives such as car sharing and car pooling can have a huge impact as well. Car sharing

means that people share a car instead of each owning a car. Car pooling is when people do not have to

share a car, but can be in the same car at the same time (BP, 2017b). In the Netherlands, a research was

done on the mobility and environmental impacts of car sharing (Nijland and van Meerkerk, 2017). Car

sharing can have an effect on car ownership, car usage and CO2 emissions. This research showed some

interesting conclusions. About 30% less car ownership amongst car sharers was found. Also did these

care sharers drive 15% to 20% less in distance compared to their driving behaviour before being a car

sharer. The shared cars replace in most cases a second or a third car. Car ownership and car use can thus

be reduced by car sharing initiatives. Consequently, less air pollutants would be emitted. Furthermore,

the research showed that car sharers emit between 240 and 390 fewer kg CO2 per person, per year.

2.2 Barriers and opportunities for electric vehicles

This section gives an overview of the different barriers and opportunities for BEVs (McKinsey&Company,

2017) (ING, 2017). A short analysis of the different factors that play a role in the transition towards a

BEV fleet is made. First, the supply side of BEVs is considered. Next, the range problem is analyzed.

Third, the battery cost is being discussed as this is the main cost driver of a BEV. Fourth, the charging

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infrastructure which is needed to support BEVs is mentioned. The last factor touches upon the charging

time.

The figure below shows the factors that play a role in the uptake of EVs. It shows that low infrastruc-

ture availability is the main reason for not purchasing an EV. The figure is based on research of the UK

Department of Transport where 649 license holders were questioned.

Figure 14: Lack of charger availability is the main barrier to EV adoption

Source: (Tricoire and Francesco, 2018)

2.2.1 Battery electric vehicles in supply

In order for consumers to massively engage in the electrification of mobility, the supply side needs to be

prepared. Currently, consumers expect to have a wide variety of different BEV models as they have for

ICE vehicles. They want to be able to replace their ICE vehicle with a similar EV. To make this possible,

there needs to be a certain variety in models that are available on the market.

The interview with Jochen De Smet, counselor of Bart Tommelein the Minister of Energy of Belgium,

told us that for accelerating the transition towards a zero-emission fleet, the availability of different BEV

models is very important. The government can put incentives in place to make electric driving attractive,

but without enough BEV models on the market, many people will not be convinced (Interview 17).

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Figure 15: Battery electric models on the market are expected to increase five-fold by 2021

Source: (Transport & Environment, 2018)

The figure above shows the number of BEV models which are available on the market in Europe.

What can be seen is that by 2021, the number of BEV models on the market is expected to be five times

as high as it is today. This would lead to over 100 different BEV models in 2021. By then, the driving

range will be increased along with the choice for consumers. More and more car manufacturers are

engaging in the transition which also increases the competition (Transport & Environment, 2018).

Subsection 2.3.1 ’Car manufacturers’ elaborates more on the intentions of car manufacturers.

2.2.2 Range problem

It is a fact that currently BEVs cannot offer the same range as ICE vehicles can. According to the

European Road Transport Research Advisory Council (2017), BEVs will probably never replace all

conventional vehicles. BEVs will never keep the same universality with driving ranges up to 1.000 km

and refilling times less than 5 minutes. Successful EVs are not made by just replacing the ICE with an

electric motor. One can attain freedom of individual mobility with a BEV, but there are limitations when

it comes to range and charging time. The only way users are willing to accept the limitations is when

these are overcompensated with other advantages. Examples of advantages can be the access to zero-

emission zones, driving comfort because BEVs are more silent or preferential parking for BEVs. The

speed at which the takeoff of BEVs will happen, can be boosted or slowed down by common European-

wide legislation (European Road Transport Research Advisory Council, 2017).

BEVs in combination with fast charging capabilities can answer the longer range needs. If rapid

30

charging points are available on roads during longer journeys, BEVs can be already a better substitute

for an ICE vehicle. Extending the range of a BEV remains thus a high priority. This would increase the

user acceptance and help the BEV in gaining market share (European Road Transport Research Advisory

Council, 2017).

In this discussion, it is important to bear in mind what it would mean for the BEV if the range is

enlarged. Increasing the range that is delivered by the electro-chemical energy stored in the battery can

only be obtained directly by increasing the size of the battery. This would mean that the installed energy

storage capacity is increased. However, this happens in parallel with an increase in cost, size and weight.

This lowers the efficiency of the vehicle itself. If the range is doubled, the battery size and weight

undergoes the same (European Road Transport Research Advisory Council, 2017). Next to this, also the

energy density of the battery can be improved which also results in an increased range.

One can say that people need to be aware of the differences in charging and fuelling a BEV and an

ICE vehicle respectively. With an ICE vehicle, you refill your car about once a week. On the other hand,

with a BEV there will be the possibility to daily charge the battery. This means that people will never

have to stop at gas stations in the future. The charging will take place at home, at work or at public places

such as commercial parking areas (European Road Transport Research Advisory Council, 2017). If you

combine this with the average distance which a person drives every day, one can conclude that the BEV

is a perfect match with the behaviour of consumers. In 2016, a Belgian car drove on average 14.999 km

which is 41,1 km/day (Kwanten, 2017).

To have an idea what the average range of the different models on the market today is, an overview

was made. Figure 16 shows the recent BEV models and their ranges. The ranges in this figure are

based on a practical model instead of the NEDC that most OEMs use to compare BEV ranges. The

practical model is based on a temperature of 9 degrees Celsius, an air pressure of 1.013 hPa, a normal

driving behavior and an average speed of 88 kms/hour. Additionally, an average use of air conditioning

is incorporated (Elektrische Voertuigen Database, 2018).

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Figure 16: EV range as of 2017

Source: Data based on (Elektrische Voertuigen Database, 2018)

Alternative battery technologies can even enlarge the current range capacities. However, it is difficult

to predict when these technologies can have a breakthrough. The figure below shows what can happen

in the future. Solid-state batteries are the long term goal of many OEMs (European Commission, 2018).

Figure 17: Roadmap for high energy batteries

Source: Reproduced from (European Commission, 2018)

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2.2.3 Cost of batteries

The battery that is generally used in a BEV is the LIB. Production ramp-ups show that the cost of these

batteries can be decreased significantly. The cost of the LIB is significant because it is the most important

cost element of a BEV. An important study regarding this subject is the one of Björn Nykvist and Mans

Nilsson. They conducted a paper in 2015 in which they analyzed over 80 different estimates which were

reported between 2007 and 2014. By doin this, they could systematically trace the costs of LIB packs for

BEV manufacturers. According to the paper, costs need to fall below US$150 per kWh before BEVs can

become cost-competitive with ICE vehicles. The figure below shows that the point of commercialization

is expected to be around 2025 (Nykvist and Nilsson, 2015).

Figure 18: Costs of LIB packs in BEV

Source: (Nykvist and Nilsson, 2015)

On the contrary, Bloomberg New Energy Finance expects a battery pack to cost $100 per kWh in

2025 (ING, 2017). Björn Nykvist was interviewed through a skype conversation. During this conver-

sation there was asked what the reason could be for this different expectation. The conclusion was that

during the work of Nykvist and Nilsson, predictions were too conservative. The trends of then have

continued and the point of commercialization is coming closer than expected (Interview 11).

As also mentioned in Nykvist and Nilsson (2015) and in line with the conclusions of the interviews,

the further decline of the battery pack prices because of economies of scale are pending on the growth of

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BEV sales.

Here, the general trend in the cost of LIBs was briefly discussed. Section 3.5 ’Cost evolution of the

Lithium-ion battery’, a more detailed analysis has been done on the LIB cost evolution.

2.2.4 Infrastructure

As mentioned in the introduction of this section, the non-availability of chargers is one of the most im-

portant reason why people are not yet purchasing an EV. Also the European Road Transport Research

Advisory Council (2017) notes that convenient and reliable re-charging is identified as one of the most

important aspects to increase user acceptance of EVs. To facilitate an accelerated uptake of EVs, suffi-

cient available charging infrastructure is needed (Platform For Electromobility, 2018).

There is a lot going on regarding the charging infrastructure for EVs. Almost all interviewees had

the same opinion that it can be compared with the chicken and egg situation. Back when gas stations

needed to be placed, the government did not put subsidies in place. On the other hand, there need to be

incentives to help the EVs in having a market uptake. According to Yoann Le Petit, governments should

keep subsidizing charging points until 2% of the vehicle fleet are BEVs. As from that point, new business

opportunities will appear and subsidies will not be needed anymore (Interview 14).

The development of EV charging infrastructure is critical fo