The climate conference ended, it is difficult to stop the sale of gasoline trucks

  Whether to stop selling internal-combustion vehicles globally in 2040, the automotive industry has very different opinions.
  On November 13, the 26th Conference of the Parties (COP26) of the United Nations Framework Convention on Climate Change (COP26) closed in Glasgow, UK. More than 100 governments, cities, states and auto companies signed the Glasgow Declaration on Zero Emission Vehicles and Vans “, promised to stop sales of internal combustion engine vehicles in the global “major markets” by 2035, and to stop sales globally by 2040.
  However, such an important document was signed by only six companies including Volvo, Ford, GM, Mercedes-Benz, BYD and Jaguar Land Rover. Large automakers such as BMW, Volkswagen, Honda, Nissan, Toyota, Hyundai and Stellatis were absent. At the same time, the governments of China, the United States, and Germany have not signed relevant agreements.
  On the same day of the COP26 meeting, Toyota Motor held an event in Japan where the protagonist is the fuel cell version of Corolla, to speak to the United Nations and the automotive industry.
  ”We don’t want to be an electric car manufacturer, but a carbon neutral company.” Toyota Vice President Shigeru Hayakawa responded to the reasons for the refusal to sign the promise. Toyota has been committed to hybrid and hydrogen fuel cell technology, and this is within the scope of the ban on COP26 related agreements.
  ”What a failure… how embarrassing. I have almost nothing to say.” Thomas Ingenlath, CEO of Volvo’s electric brand Polestar, commented on the results of the meeting.
  Apart from reaching a consensus on reducing carbon emissions, the much-anticipated COP26 conference did not sign a truly binding document. The carbon trading platform, which was the most concerned in the industry before, has only established a framework without any detailed rules.
  “Unexpectedly, it has become a slogan conference.” An unnamed carbon emission management analyst told the Caijing reporter. “The climate conference involves the law of profit distribution in the coming decades. It is a long-term game process. It’s impossible to decide through a meeting.”
  All the data show that if you do not act, the loss will be greater; if you act, no one is willing to become the party who sacrifices more. After all, carbon neutrality has not always been a banquet for guests and hosts, but a strategic transformation that countries have to make in order to cope with climate issues. Global carbon neutrality has a long way to go, and the same is true for automotive carbon neutrality.
Figure 1: Comparison of sales of BYD’s new energy vehicles and fuel vehicles

Source: BYD Announcement, compiled by Caijing reporter based on public information. Drawing: Yan Bin
Dispute over the timetable for the suspension of fuel vehicles

  On the eve of the opening of the COP26 conference, United Nations Secretary-General António Guterres once again reminded: By 2050, sea level rise may put more than 800 million people in the world directly at risk, and combating climate change is truly a matter of human survival. test. The next ten years is the last time for mankind to avoid species reduction, reduce pollution emissions, and avoid abnormal climate disasters.
  At present, the consensus of the automotive industry is to achieve carbon peak and carbon neutrality in the automotive industry by encouraging car owners to travel green and develop new energy vehicles. In recent years, many countries and economies such as China, the European Union, Japan and South Korea have proposed plans to ban the sale of fuel vehicles. As major fossil fuel companies, BMW, Volkswagen, Volvo, Geely, BYD and other companies have also announced their electrification transformation strategies.
  Undoubtedly, new energy vehicles have an immediate effect on reducing car carbon emissions, but whether fuel vehicles should be banned, there are different opinions.
  As the world’s largest automaker, Toyota is known for its hybrid and hydrogen fuel technology routes. So far, Toyota’s hybrid models have sold more than 18 million vehicles worldwide. They have launched Corolla Double Engine, Ralink Double Engine, Camry Hybrid, and Lexus. Classic products such as ES. In recent years, Toyota has continued to exert efforts in the field of fuel cells, and Mirai models have gradually opened up sales worldwide.
  Although Toyota has launched a series of plans on climate and environmental protection issues, it is proposed that by 2050 the global average carbon dioxide emissions of new cars will be reduced by 90% compared with 2010, and by 2030, the global sales of electric vehicles will exceed 5.5 million, of which pure electric vehicles Hydrogen fuel cell vehicles will reach more than 1 million units. However, Toyota has never put forward a clear timetable for full electrification.
  The COP26 related agreement proposes a timetable for the ban on internal combustion engine vehicles, which actually excludes hybrid technology that belongs to internal combustion engine models. Therefore, Toyota Motor appealed to the outside world that there should not be a single choice to achieve carbon emissions, and the openness of the choice of technical routes should be ensured. “Our enemy is carbon, not internal combustion engines. We should not only focus on one technology, but use existing technologies.”
  The German government has similar concerns about the technical route. A spokesperson for the German Ministry of the Environment said that because synthetic fuels were not included, such as electronic fuels made from renewable energy sources, they refused to sign the pledge. “We hope to end the use of fossil fuel internal combustion engines by 2035, but combustion technology is still needed.”
  Volkswagen Group, the world’s second-largest car company, said in a statement that although Volkswagen is mass-producing electric vehicles, it has electricity in the United States and China. With production still heavily dependent on burning fossil fuels, the environmental benefits of signing the pledge are not clear.
  ”We are just very realistic.” A spokesperson said. Volkswagen believes that accelerating the transition to electric vehicles must be consistent with the energy transition to 100% renewable energy. Therefore, Volkswagen, which operates in all major markets around the world, has decided not to sign a statement at this time.
  Industry insiders also told the Caijing reporter that an important reason for the difficulty of banning the sale of fuel vehicles is that developing economies such as Africa and Latin America still need a lot of time to build infrastructure for electric vehicles and fuel cell vehicles.
  It should be understood that the carbon dioxide emissions of cars do not only exist in the process of use. From the perspective of the entire life cycle of a car, carbon dioxide emissions from car production and car recycling are also considerable. A truly clean green car should meet the needs of sustainable development from production, use to recycling. This puts forward higher requirements for the local electrification level.
  The uneven development of electrification worldwide has also made it difficult to implement the various agreements of the COP26 meeting. Only at the last moment, a non-binding document was reluctantly signed with the purpose of controlling the global average temperature rise within 1.5 degrees Celsius and preventing global disasters. The sexual climate further intensified.

  However, the commitments made after the COP26 meeting are also worthy of attention-the German government, which opposed the ban on the sale of fuel vehicles, signed a statement after several days of hesitation to terminate financing for overseas oil and gas projects.
  The aforementioned carbon emission management analyst told the Caijing reporter, “Compared with the government, companies will be more cautious in formulating carbon emission-related plans, especially multinational companies, which must take into account the local energy cleanliness and new energy-related supporting facilities in the market. The unilateral transformation of facilities, local residents’ living habits and other factors will not only fail to achieve the effect of reducing emissions, but also easily plunge oneself into a business crisis.”
Significant differences in the electrification process of various car companies

  As the only Chinese car company among the six signed car companies, BYD, which started with batteries, raised his hands to express his approval.
  Although this is the first time that BYD has signed a clear timetable for the suspension of fuel vehicles, its sales of new energy vehicles have already accounted for more than half. According to the company’s official data, as of the end of October this year, BYD’s total sales of vehicles were 5,426,79, of which sales of new energy vehicles were 418,619, an increase of 212.03% over the same period last year, and accounting for 77.14% of the group’s overall sales.
Table 1: Timetable for carbon neutralization of some car companies

Source: Carbon neutralization schedule of major auto companies, compiled by Caijing reporters based on publicly available data

  From January to October 2021, BYD’s new energy vehicle sales accounted for 47% of the total sales at the beginning of the year, rising all the way, and stabilized at more than 90% in September and October.
  90% is not the end. Li Yunfei, general manager of BYD’s brand and public relations, told the Caijing reporter that “BYD has accumulated more than 100,000 orders.” These 100,000 orders are mainly from the DM-i super hybrid system released in January this year.
  Volvo is another car company that is actively signing, and Volvo Cars CEO Hakan Samuelsson (Hakan Samuelsson) is the only car company executive to take the stage at the COP26 meeting. This Nordic company announced as early as 2019 that it will achieve full electrification in 2025. By then, 50% will be pure electric models, and the rest will be hybrid models. By 2040, it will strive to become a climate-zero load benchmark company.
  However, according to data from the China Automobile Association, from January to September 2021, Daqing Volvo sold 46,278 vehicles in China in the car sector, of which 3334 plug-in hybrid models, accounting for 7.2% of the total sales; in the SUV sector, Daqing Volvo sold 46,278 vehicles in China. Volvo sold a total of 75,036 vehicles in China, of which 13,531 were plug-in hybrid and pure electric vehicles, accounting for 18.03% of the total sales. Fuel vehicles still account for the absolute majority.
  Although many car companies have not signed the “Glasgow Declaration on Zero Emission Vehicles and Vans”, this does not mean that they are against electrification, but they have formulated their own electrification and emission reduction plans.
  For example, at the “Honda China Electrification Strategy Conference” on October 13th, Honda Motor stated that all new models launched in China after 2030 will be electric vehicles such as pure electric vehicles and hybrid vehicles, and no new models will be introduced. Fuel car.
  Honda’s global electrification strategy is that the sales of pure electric vehicles and fuel cell vehicles will account for 40% in 2030, 80% in 2035, and 100% in 2040-consistent with the plan of COP26, or even slightly ahead.
  As for BMW, which is the first to put forward the concept of “sustainable development in the entire life cycle of automobiles,” although it has not formulated a clear timetable for the ban on fuel vehicles, its contribution to reducing the entire life cycle of automobiles cannot be ignored. BMW’s goal is to reduce the average life cycle carbon emissions of a bicycle by at least one third by 2030 compared to 2019.
  BMW has required suppliers to assess their carbon footprint since 2009. In an interview with a reporter from Caijing, Pan Dingqiao, head of sustainable development and mobility strategy at BMW (China), said: “We will cooperate with suppliers with better sustainable development, such as suppliers that use solar energy to produce aluminum materials, Certified natural rubber tire suppliers.”
  Only by strictly controlling the supplier’s production energy can the final car product be absolutely green. “If a supplier proves to be high-risk in this regard and violates sustainability requirements, we will conduct independent audits to ensure that they take corresponding rectification measures and ultimately meet the requirements of the contract they signed with BMW.” Pan Dingqiao said. BMW has also invested in a company called Boston Metal (Boston Metal), which mainly develops and produces new steel without carbon emissions.
  BMW’s financial report shows that the sales of pure electric and plug-in hybrid vehicles in the first three quarters of this year reached 232,000, accounting for 12% of BMW’s total sales. In the Chinese market, this value is even lower. According to data from the China Automobile Association, from January to September 2021, the sales volume of BMW new energy sedans was 17,700, accounting for 5.99%, and the total sales volume of new energy SUV models was 13.83%. “Fuel vehicles” still have a distance.
  China’s car volume is huge, it is difficult to “one size fits all”
  In this COP26 meeting, countries such as India, Poland, New Zealand, as well as cities such as Sao Paulo in Brazil and Seoul in South Korea signed agreements to ban the sale of fuel vehicles. As the host country, the British government’s ban on the sale of fuel vehicles has been advanced. It plans to ban the sale of new gasoline and diesel vehicles from 2030, so that the UK will achieve the goal of “net zero emissions” of greenhouse gases by 2050.
  The EU plans to reduce the total emissions of all registered new cars by 2030 by 55% compared to 2021. Starting from 2035, the EU will ban the sale of fuel vehicles.
  However, as the world’s largest automobile production and consumer country, China is facing more difficult tasks and greater pressures in the transformation of automobile technology routes, and it is difficult to achieve a “one size fits all” approach.
  ”When new energy vehicles reach a certain percentage, the state will gradually tighten its policies. Policy preferences such as purchase tax and right of way will gradually withdraw, because the quantity of fuel vehicles must also be guaranteed, so that fuel vehicles and electric vehicles can be guaranteed. At a reasonable ratio.” Cui Dongshu, secretary general of the Federation of Travelling Industries, told the reporter of Caijing.
  In the opinion of some industry insiders, the automobile, as a pillar industry in China, has undertaken important tasks such as taxation and employment. Therefore, it is necessary to take into account the coordinated development of fuel vehicles and new energy vehicles.
  According to statistics from the Ministry of Public Security, as of September 2021, China’s car ownership is 297 million, of which the number of new energy vehicles is 6.78 million, accounting for 2.28% of the total number of cars. Among them, there are 5.52 million pure electric vehicles, accounting for 81.53% of the total number of new energy vehicles.
  In addition, the promotion of electric vehicles requires strong foundation construction of charging piles and power grid support. According to data from the China Automobile Association, in recent years, the annual sales of Chinese cars have been between 20 million and 3,000. If fully electrified, it will bring huge challenges to the power system.

  China has not proposed a timetable for the complete suspension of the sale of fuel vehicles, but most cities are currently encouraging the promotion of new energy vehicles. For example, cities with large car ownership such as Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, and Chongqing have launched support for charging Guiding policies such as pile construction, purchase tax concessions, and rights of way convenience.
  Among them, Hainan and Xi’an have relatively strong policies. On March 4, 2019, the Hainan Provincial People’s Government issued the “Hainan Province Clean Energy Vehicle Development Plan”, stipulating that the province will ban the sale of fuel vehicles by 2030. On November 3, 2021, the General Office of the Xi’an Municipal People’s Government issued the “Implementation Opinions on Accelerating the Promotion of the High-quality Development of the New Energy Vehicle Industry”, striving to achieve a total of 500,000 new energy vehicles in the city by 2025, and strive to be comprehensive by 2030 Realize electrification.
  According to Chen Shihua, deputy secretary-general of the China Automobile Association, it is not scientific to adopt a one-size-fits-all approach to fuel vehicles in some countries and regions, because from the perspective of the full life cycle of vehicle emissions, the carbon emissions of some advanced plug-in hybrid vehicles are even lower than that of pure electric vehicles. Model. However, from a market perspective, if new energy vehicles can overcome bottlenecks in mileage and charging, and can be comparable to fuel vehicles in terms of economy and practicability, the future market space will be large enough.
  On October 26, 2021, the State Council issued the “Carbon Peaking Action Plan by 2030″, stipulating that by 2030, the proportion of new and clean energy-powered vehicles will reach about 40%.
  ”It is reasonable for China’s new energy vehicle penetration rate to reach 40% by 2030. From a global perspective, in addition to the Chinese market, in more developed countries such as Europe, America, Japan and South Korea, the market share of new energy vehicles will reach 40% by 2030. The probability of %-50% is also relatively high.” Chen Shihua told a reporter from Caijing.
  Obviously, under the general trend of reducing carbon emissions on a global scale, very few car companies and governments stay aside and still insist on fuel vehicles as their main development strategy. However, due to the local energy cleanliness of the market, new energy-related supporting facilities, and the company’s own technical characteristics, the methods and pace of energy transformation vary from place to place.
  ”To achieve true carbon neutrality, first of all, there must be a top-level system to balance the interests of all parties, and secondly, there must be a mature technical route to support the energy transition, and finally a better business model to implement this major energy transition. Ideologically change everyone’s living habits.” The aforementioned analyst told a reporter from Caijing.
  However, as long as automakers move towards the common goal of “reducing carbon dioxide emissions”, does a unified timetable for banning the sale of fuel vehicles really make sense?