Is Asean ready to switch to electric vehicles? RHB Group Research analysts highlight a few key considerations, including rise in personal vehicle ownership, reducing emissions from vehicles and government policies towards a low-carbon future
“In this report, we focus on the motor vehicles segment of travel and the transition to zero-emission vehicles (battery electric vehicles and fuel cell vehicles),” note RHB Group Research analysts Eddy Do, Chatree Srisamaicharoen, Shehkar Jaiswal and Andrey Wijaya in an Aug 20 report.
Carbon dioxide (CO2) reduction targets should increase the demand for low-carbon electric power, write the analysts.
The transportation sector accounts for 14% of total global greenhouse gas (GHG) emissions. The world emits around 50 billion tonnes of GHG each year, as measured in carbon dioxide equivalents (CO2 equivalent). Of the 50 billion tonnes, the transportation sector emits 7 billion tonnes of GHG.
Within the sector itself, cars emit 47% of the total, or 3.3 billion tonnes of GHG, and trucks emit 25% or 1.75 billion tonnes of GHG. These altogether come up to 5 billion tonnes of GHG.
The Paris Agreement, adopted in December 2015 under the United Nations Framework Convention on Climate Change came into force in November 2016 (the Paris Agreement). In the Paris Agreement, countries agreed to keep the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels, and to pursue efforts to limit the temperature rise further to 1.5 degrees Celsius. With the push to reduce GHG, currently over 100 countries have set net-zero emissions or neutrality targets.
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Personal vehicle ownership has emerged as more lasting winner, say the analysts, even after the pandemic. Personal vehicles account for 61-82% of all kilometres travelled, they add.
“While motor vehicles will remain the means of transport most used, industry experts expect the distance per capita travelled by train to equal or even surpass that travelled by air… The main polluters where travel is concerned remain airplanes and motor vehicles,” write the analysts.
A shift to CO2 emissions measurement criteria is based on the entire vehicle lifecycle, from manufacturing, to driving, batteries replacement, and to disassembly. The lifecycle assessment (LCA) has concluded that the environmental impact of battery electric vehicles is significantly lower than that of a vehicle with an internal combustion engine (ICE), say the analysts.
Government policies are also driving electric vehicles (EVs) adoption, note the analysts. “The policy is shifting towards a low-carbon future through measures such as a ban on the sale of ICE cars and the adoption of EV.”
Aside from battery-operated vehicles, RHB Group Research analysts also highlight the use of hydrogen for larger vehicles on long-distance driving.
“As trucks undergo greater electrification, we expect to see more fuel cell vehicles (FCV) technology in mid-sized and larger trucks, and more EV technology in small trucks and passenger cars,” they add.
CO2 reduction targets should increase demand for low-carbon electric power, note the analysts. “Renewable energy (RE) is likely to have an advantage in the electrification effort. Environmentalists are focused on electrification as the fastest way to decarbonise the energy system. The electrification of everything — and its accompanying grid enhancements — seems to be the trend.”
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