Beginning of the End for Internal Combustion

September 26, 2017 by Denis Pombriant

Debate about the internal combustion engine’s future in the automobile is heating up in the world’s biggest car market, China. For several years, the Chinese have been seeking ways to accelerate development of low cost and reliable electric transportation and threatening to ban the internal combustion engine. China has some of the most noxious and polluted air in the world and the internal combustion engine, in a nation rapidly adapting to the auto, is neck and neck in its pollution generation with coal fired power plants.

But there’s plenty of good news. In 2016 world-wide installed clean electricity capacity reached 150 GW including 64 GW in China and another 16 GW in the US according to a report from Clean Energy Canada a part of the Centre for Dialogue at Simon Fraser University. Admittedly those are small numbers when compared just with the US electricity demand of 1.1 terawatts, but it’s the direction that counts and the planet has been adding more renewable generation capacity than fossil fuel capacity since 2012. So the Chinese and most of the world are striving to produce the power that will run the personal transportation fleet or at least charge its batteries.

All this serves as background for an article in The Economist that said,

“On September 9th, Xin Guobin, vice minister of industry and information technology, told an automotive conference in Tianjin, a grimy industrial city near Beijing, that the government is developing a long-term plan to phase out vehicles powered by fossil fuels.”

Since no dates have been floated, this may be more of an aspirational statement, however, manufacturers have long lead times and such discussion is designed to sway them well in advance of an official announcement.

Carmakers from across the world who see China as an important emerging market were taken aback by the thought of having to move more aggressively into electric vehicles (EVs). A story in the New York Times, headlined, “G.M. Chief, in China, Challenges Planned Bans of Gasoline Cars” noted that Mary Barra, CEO of General motors, said that government should let the market decide such things. “I think it works best when, instead of mandating, customers are choosing the technology that meets their needs.”

There are certainly times when the free market operates best but this may not be one of them. Also appeals to the free market are almost reflexive pronouncements by carmakers whenever something new is mandated like, um, seatbelts. But with petroleum supplies declining, air quality degrading, and climate change becoming more apparent, it may be necessary for governments to give the market a boost.

Much the same thing happened throughout the oil age up to the present day with numerous incentives like the oil depreciation allowance for producers and policies that favor highway construction and maintenance over railroads and light rail. The shoe is now on the other foot.

But the real thumb on the scale dictating the drive to electric driving might be declining petroleum reserves in the face of growing demand. In that light, calling on the free market is fine since it will decide when it needs to go electric regardless of what the manufacturers say. In a way the Chinese might be doing carmakers a favor pointing out the obvious.

In a related note it appears right now that the Chinese mean fully electric when they discuss EV’s so hybrids may not count. This would disrupt the plans of many carmakers that have set a course on hybrids both plug-ins (with ICE’s as a back up, think Chevy Volt) and electric assist vehicles (that use both forms of power, think Toyota Prius), as a bridge to fully electric driving.

Completely electric driving (a la Tesla) will need some enhanced and lower cost technologies to reach the mass market. For instance, battery range is still an issue and charging is relatively slow, often over night for EVs on the market today. Advances in battery technologies are on the drawing board and in prototype and they are the bottleneck. So far, the best solution to long range is a big battery, which keeps the cost of vehicles higher than the mass market can deal with.

For now, the incentive appears to be the hardening Chinese position on EVs, which will undoubtedly drive the manufacturers to innovate. If they’re successful it will be good news for every country participating in the Paris Climate Agreement.


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