The one-in-five achievement

From every fifth car sold this year expected to be electric to the rise of robotrucks, the landscape of sustainable technologies is evolving rapidly

The rising number of electric vehicles (EV) delivered by Tesla — 1.8 million last year versus 1.3 million in 2022 — is a good indication of the traction these vehicles have achieved globally. Although the annual growth rate is expected to slow down, the market continues to expand. BloombergNEF forecasts passenger EV sales of 16.7 million in 2024, up from almost 14 million last year. One in five passenger cars sold in the world will be electric this year. The two biggest manufacturers are Tesla and China’s BYD.

India’s electric car sales were close to the 100,000-vehicle mark last year. New models, cheaper batteries and cars, rising demand from cab operators and the possible entry of Tesla are all tailwinds for the country’s EV market.

The electric two-wheeler market in India is seeing a lot more activity, though the industry faces headwinds from the phasing out of the government subsidy in March. “The end of subsidy could hit sales to private users, but it is a different story for commercial users. Lower operating costs will continue to drive demand in that segment,” said Komal Kareer, BNEF’s lead EV analyst for India.

Over 240,000 electric two-wheelers were sold in the country in the last three months of 2023, compared with 219,000 in the same period a year earlier. Ola Electric remains the market leader.

The nascent battery-swapping model is also being tried in pockets of the country. Taiwan’s Gogoro launched its electric scooters and battery-swapping option in India last month, which is initially aimed at business customers only.

Policy support for electric buses is still going strong, and more tenders and sales can be expected as a result, Ms Kareer said.

The rising electrification of transport globally, combined with other factors like rising fuel efficiency, is leading to a perceptible dent in oil demand. “Oil displacement from electric vehicles of all types will cross 2 million barrels per day in 2024,” BNEF said in its latest report on the 10 things to watch this year in EVs and clean transport. The overall transport oil demand peak is about four years away.

In the state of Texas, robotrucks may soon become common, with a few startups expecting to remove safety drivers. “At the end of the year, we anticipate getting to the point where we begin operating those trucks without drivers on board,” Chris Urmson, co-founder and chief executive officer of Pittsburgh-based Aurora, told Bloomberg News in an interview in January.

Making solar local

There are environmental benefits of manufacturing locally — the demand for shipping products is much less — but there is a cost to be paid in terms of forgone economies of scale. The generous incentives for manufacturing locally in the US saw Mumbai-based Waaree Energies announcing plans to invest $1 billion for a facility to produce 5 gigawatts of cells and panels in Texas last month. The first unit, with a module-making capacity of 3 gigawatts, will be ready by the end of 2024, with full capacity expected by 2027. The company has filed for an initial public offer in India to mobilise funds for a 6-gigawatt cell and module plant in Odisha, among other things.

Interestingly, US-based First Solar had secured support under India’s production linked incentive scheme for fully integrated manufacturers. The company has multiple manufacturing units in Asia and the US. It announced the sale of production tax credits last month in the US — a new route of monetising tax credits offered by the Inflation Reduction Act. The buyer, Fiserv, will pay a price of $0.96 per $1 of tax credits under two separate tax credit transfer agreements to sell $500 million and up to $200 million of credits. This is on the higher end of the prices seen so far.

COP30

The recently concluded COP28 may lead the global collective of countries to triple renewables and double energy efficiency improvements by 2030, phase down unabated coal power and transition away from fossil fuels in a just and orderly fashion. It all depends on how countries choose to interpret the text, and the desire of the 8 billion people in the world for action.

COP30, scheduled in Brazil in November 2025, will be a critical one, as countries must be ready with new promises. “They must come prepared with new nationally determined contributions that are economy-wide, cover all greenhouse gases and are fully aligned with the 1.5 degrees Celsius temperature limit,” the UN statement after the conclusion of COP28 said. This year’s climate conference — COP29 in Azerbaijan — will focus on climate finance goals “reflecting the scale and urgency of the climate challenge”. The country’s Ecology Minister Mukhtar Babayev, who worked at the state oil and gas company for over two-decades, is the COP29 president-designate.

The writer is New York-based senior editor – global policy for  BloombergNEF, vgombar@bloomberg.net