Welcome to Zero. I'm Akshadrati. A couple of weeks ago, we put out an episode talking all about electric cars and how they went from fringetech to mainstream cars. Though are only half the electric vehicle story. There are also billions of two and three wheelers that need to be electrified,
alongside vans, trucks, and buses. In this bonus episode of Zero, we're joined again by Colin mccaracker bloomaganif's head of Advanced Transport to look beyond electric cars and hear how electrification is going for other forms of road transport and whether batteries are still the best tech to power them. About half the vehicles in the world are passenger cars. There are all these other types of vehicles that also need to become electric. So let's start with the second largest,
which is two wheelers. Go to anywhere in Asia. Two wheelers are at the mode of transport of choice. Two hundred million two wheelers today in the world are electric. Ninety nine percent are in China.
Yeah, and this is a really remarkable policy success story, if you will, And it's worth bearing in mind, as you said that if you're sad in Europe and North America, it's difficult to picture just how different the mobility mix is in different countries. And so the China success story there is another urban policy one largely which said you can't drive combustion two wheeled vehicles in the city for noise reasons and urban air quality reasons were just straight
out banning them. And interestingly, lithium ion batteries weren't really ready at the time when that happens, so a lot of those are originally when that came out, we're lead acid batteries, so we're starting to see more and more lithium ion coming into that as well.
This is early mid two thousands, right.
Yeah, and so that's why you have these huge numbers in China. But then what you're starting to see without such a heavy handed policy is the emergence of electric two and three wheelers, primarily the lithium ion base in South Asia and Southeast Asia. So markets like India starting to go quite quickly, now, Vietnam starting to go quite quickly. Now Thailand as well, some activity there. So those are
markets that we're watching quite closely. And it's funny because the global numbers and our outlook look like they don't go up that much, they sort of stay flat. That's just because the Chinese market is not saturated but very close to saturated, and it's really just taking time before
the other ones start to come up the curve. So when you look at those charts in our outlook, it looks like, well, you guys are saying it's pretty slow in percentage growth outside China, it's actually growing really quickly. And then that starts to affect the global market as you get later five, six, seven years from now, and it starts to all go up quite quickly. But I'm
very optimistic on two and three wheelers. One of the things we try and do is say which segments are closest to being on track for the net zero scenario. Three wheelers are largely there, so electric took tooks and rickshaws were on track pretty much for net zero, which is remarkable. There's not many things you can look around the world and say this segment is on track for net zero. That one is two wheelers is very very close as well.
Well, then everything else is not on track. One of those is trucks. What exactly is needed to get trucks to become zero emissions will batteries alone, do it? Do we still need hydrogen? How are we thinking about where trucks are on the transition to net zero?
Yeah, So trucks are the furthest behind, and they're the ones where the most policy intervention and progress is needed. And if you think about a lot of the things that got the passenger ev market started, things like zero missions, vehicle mandates, fuel economy targets, those are just starting to be put in place for trucks. You're starting to see things like California as Advanced Clean Truck Rule, tighter CO two regulations for trucks, and that's starting to get the
market going. So China, in the heavy and medium commercial vehicle market, around three percent of vehicles are zero missions. Most of those are battery electric. There's a very small number of fuel cell vehicles in there as well. Three percent isn't a lot, but it's kind of where the passenger vehicle market was in twenty fifteen, sixteen seventeen kind
of things, so there's some reason for optimism there. Also, I think what's interesting about the truck market is that total cost of ownership matters much more than upfront cost, and there it's a bit of a lesser hurdle to overcome in the sense that those fleet buyers they think about total cost to ownership. Electricity is significantly cheaper than diesel or gasoline as a fuel in terms of per klometer driven, so that helps.
The cost of a vehicle can be split into two main buckets, the upfront cost, which is what you pay for the vehicle from the showroom, and the running costs, which includes keeping it fueled or charged and every day repair. For smaller vehicles like cars that use less fuel, the upfront costs typically matter more to consumers than running costs. That's why, even if it is cheaper to run an electric car in the long run, its upfront cost needs to be a similar price to fossil fuel equivalance before
people buy electric cars in big numbers. For bigger vehicles like heavy duty trucks, which use a lot of fuel and travel a lot further over their lifetimes, the running costs matter a lot more. Even if an electric truck is more expensive upfront than a diesel one, the total cost of buying and operating the electric version over its lifetime can be significantly lower. Companies that buy trucks also
tend to have more money available. That means they can afford to absorb higher upfront costs more easily than someone buying a car. So the transition to electric trucks is likely to be quite different from what we are seeing with electric cars, so.
In terms of which technologies win interestingly, and again if we say China is kind of leading on this right now, there's not just traditional battery electric vehicles. There's also swappable battery electric vehicles emerging in a heavy truck segment, which I think is quite interesting. So those are generally vehicles that are being used in more of an urban or regional duty cycle, not long haul heavy duty trucks. But you're seeing a bit more in that going on, and
then you are seeing some fuel cell vehicles. So our view is it primarily based on economics, it will still be electric that wins the day overall, even in the heavy trucking market, but there are some segments of that, the longest haul trucking, heavy weight constrained trucking in the long haul segment, in places where the temperatures are extreme where hydrogen could play a role, and that's sort of in our net zero scenario, you do have a role
for hydrogen and heavy duty trucking in some of those hard to electrify segments. But it probably doesn't get there on economics alone. So that's where you'd probably need some pretty strong policy support if you're going to see that happen.
It's very early days on trucking, but I think that total cost of ownership and the potential for a big shift all of a sudden makes me optimistic that if we can get some of these things going in the twenty twenties, we might see a more dramatic shift than we're projecting right now in the base case scenario anyway, in the twenty thirties, and more commitment from the truckmakers as well is starting to ramp up.
Now. Another type of vehicle about the same size but very different use case is a bus, and buses seem like also a very good thing to electrify because they tend to be in places where people live, and so you want to cut down an air pollution. Also, total cost of ownership matters, and so when you have cheaper electricity cheaper fuel, you should be able to convert entire fleets of buses to electric.
Is that happening, Yeah, that's starting to happen now, so, and buses I think are kind of the ideal use case for electrification, right, A lot of the routes are not that long, and there's this urban air quality CO benefit. So even if there were no CO two benefits to going electric, which to be clear, there are, the life cycle emissions of an EV are dramatically lower than a combustion vehicle, even when you factor in the electricity and making the battery. But even if we weren't talking about
CO two, we weren't worried about CO two. For urban air quality reasons, you should electrify buses. It's a major, major health benefit and it just makes urban living a lot nicer. So that is happening, and you are seeing a growing share of the total bus sales globally are electric. Again, China leads that story. A lot of cities there have completely converted their bus fleets to electric. A growing number are kind of finishing, but you are seeing growing activity
in North America and in Europe as well. A number of European cities committing over the next few years to electrified their fleets. The biggest challenge there is getting the right amount of power down to an urban center to a depot where you park the buses, and that's what a lot of them are struggling with. So in London they've added quite a few ebuses to the fleet and
you can see those on the street. The biggest thing holding them back from doing more isn't actually the money, it's the charging infrastructure and being able to build charging infrastructure in the places where the buses go Today.
Your latest round of forecasts at bloomergen EF brought forward several dates for EV adoption, and yet you're still forecasting a gap between business as usual and the net zero pathway. Are you optimistic that EV adoption will happen at the rate we need for net zero targets?
When people ask me what I think happens, I think we land somewhere between our what we call our economic transition scenario and the net zero scenario. So what we have seen is that policy ratchets up and that's sort of pushing us closer to the net zero scenario, which is great. So I think we'll land somewhere between the two. I'm not confident yet that we are on the net zero scenario, but I'm I'm happy to keep revisiting it. Every year, and I really hope we see more and
more of these different segments. Like we said, three wheelers already on track, two wheelers nearly there. If I look back in five years and we've moved more and more of them into the column where they're on track or nearly on track, I'll be very happy. Man.
Now there's a political push happening around net zero, which is kind of expected. You'll see it in more countries because it is a big change to society, and politicians are opportunistic, so they'll use whatever they can to try and win votes. One place where it's becoming contentious is around banning the sales of fossil fuel cars. From your perspective, to reach net zero, our ban's necessary if market forces are winning and if electrification is happening at a pace that you would like it to.
This is a bit tricky. If I'm really honest, I think the net zero by twenty fifty has been a great rally and cry and focal point to get everyone
on board. I think in practice the last five percent of that might be really hard, and cars might be the type of thing where look, if you can get to know ninety five percent and the market gets you most of the way there, and a few people want to keep buying combustion cars, but you tax them heavily, or the economies of scale effectively tax them heavily because there's not many people making them and they're just not mass produced in the same way, but those people still
want to buy them. It may be more of a political fight than it's worth to say you absolutely cannot buy that, no matter how much you want to pay. But I also understand that you do need to provide these focal points, these points of action, where you say this is the goal, and we're going to push as hard as we can towards that. Norway is a good example. Norway has this goal of twenty twenty five. Again, this
is a small country. Maybe it's global relevance you could debate, but as this goal of twenty twenty five phasing out combustion vehicle sales, it's going to get pretty damn close. And that's enough. And I think having the goal and having the target in place for a long time has been a big part of it getting close. So you sort of need those there to kind of push to
get to ninety ninety five percent. The last five percent might be difficult, and from my sort of economist hat on it say, well, if someone wants to pay enough for the last five percent and we can use that to subsidize other things, then maybe I'm okay with that. You leave some efficiency on the table if you say you absolutely can't at any price. But there are these sort of equity and justice things that start to come in there. So it's a complicated topic, but I think that's where.
Aligns with me as a journalist. I follow other journalists, I follow other writers. And this is a pure, genuine compliment, which is the heat rate on your column, which is to say, a column that genuinely tells you something interesting and you walk away learning something new, is so high. I am always amazed.
Thank you, accha. That's quite a compliment. I also learned quite a lot from the different media formats you're publishing things in, whether that's podcast or columns or books, so I'm flattered to be in that company.
Thank you for listening to Zero. If you enjoyed this episode, please take a moment to rate or review the show on Apple Podcasts and Spotify. Share this episode with a friend or with someone who writes a two wheeler you can get in touch at zero Pod at Bloomberg dot Net. Zero's producer is Oscar Boyd and senior producer is Christine Riskell. Our theme music is composed by wonderly Special thanks as always to Kira bindrum I. Am Akshatrati back next week