UK joins France, says goodbye to fossil-fuel cars by 2040

LONDON • The UK became the latest European country to mark the end of the line for diesel-and petrol-fuelled cars as automakers such as Volvo Car Group race to build electric vehicles (EVs) or face the consequences of getting left behind.

In London, the government said it will ban sales of the vehicles by 2040, two weeks after France announced a similar plan to reduce air pollution and become a carbon-neutral nation. For the auto industry, the end of an era for fossil-fuel powered cars poses a challenge not everyone is welcoming.

“We could undermine the UK’s successful automotive sector if we don’t allow enough time for the industry to adjust,” said Mike Hawes, CEO of the Society of Motor Manufacturers and Traders. “Outright bans risk undermining the current market for new cars and our sector, which supports over 800,000 jobs across the UK,” he said. “The industry instead wants a positive approach which gives consumers incentives to purchase these cars.”

Daimler AG, the maker of MercedesBenz cars, is keen to shore up diesel, since it powers many of its lucrative SUVs and big sedans, but others are embracing the new reality. Sweden’s Volvo said that by 2019 all of its cars will have an electric motor, while BMW AG will build an electric version of its iconic Mini compact car in Britain.

The global shift toward EVs will create upheaval across a number of sectors, from oil majors harmed by reduced petrol demand to spark plug and fuel injection makers whose products aren’t needed by plug-in cars. In the UK, the decision is partly brought on by stringent European Union (EU) emission rules that the country must follow even as it is set to leave the bloc.

“We can’t carry on with diesel and petrol cars,” Environment Secretary Michael Gove said on BBC Radio 4’s “Today” show. “It’s important we all gear up for a significant change which deals not just with the problems to health caused by emissions but the broader problems caused in terms of accelerating climate change.”

The environmental push comes as the UK plans to invest more than £800 million (RM4.28 billion) in driverless and zero-emission technology and outlined plans to invest £246 million in battery technology research. For activists, the new targets are not ambitious enough.

Electric Surge

EVs will likely grow in popularity in the second-half of the next decade due to plunging battery prices, according to a report from Bloomberg New Energy Finance (BNEF). The analysts see the proportion of fully electric cars sold in the UK rising to one in 12 by 2030, from one in 200 today.

“Our modelling shows that 79% of new cars could be electric by 2040 in the UK even under existing policies, thanks to rapidly falling battery costs,” said Albert Cheung, analyst at BNEF. “To close the gap to 100%, we’ll need to see much greater investments in charging infrastructure, to make sure people have somewhere to plug in.”

Not all countries are on the same page. With tens of thousands of jobs at stake, Germany is looking for ways to reduce automotive emissions without moving toward an outright ban on vehicles with combustion engines. State and federal officials are set to meet next week in Berlin with auto

industry executives to discuss possibly retrofitting cars currently on the street with new technology to reduce pollution from exhaust.

Critics are also concerned that it will be up to local authorities to impose tough levies on the most polluting diesel vehicles as soon as 2020. The plan is to urge local jurisdictions to reduce emissions first, by fitting diesel vehicles with filters, changing road layouts and removing speed humps.

“What we’re saying to local authorities is: Come up with an imaginative solution to these proposals,”’ Gove told the BBC.

The UK has the largest fleet of diesel vehicles in Europe after drivers were encouraged to switch from petrol because diesel has more range and emits less carbon dioxide. But emissions from the fuel are between eight and 10 times more toxic, according to Stephen Holgate, medical research professor at the University of Southampton and special advisor on air quality at the Royal College of Physicians.

Britain has now switched emphasis and is seeking to position itself as a leader in electric and driverless car technology, hoping to create jobs and export opportunities as it quits the EU. Yesterday’s decision represents a more ambitious update to last month’s Queen’s Speech, which said the government would set a target for almost every car and van to be zero emission by 2050.

Plug-in cars are still only about 1% of all UK vehicle sales, yet the country is one of only a handful worldwide to have more than 100,000 plug-in automobiles on the road. — Bloomberg