While the global plug-in electric vehicle (PEV) market has been growing for several years, its continued expansion faces threats, caught up in potential trade wars and a roll back of favorable policies. Not only is the current U.S. administration threatening on-again-off-again tariffs on EU imports, source of many PEVs— it’s also proposing to stop planned increases in federal fuel efficiency standards and to thwart the ability of California and other states to enact regulations and incentives that have supported PEVs.

Until recent uncertainties, worldwide electric drive vehicle sales continued to accelerate. In 2017, the global PEV market [including battery and plug-in hybrid electric vehicles (EVs)] grew by 65%, hitting 1.2 million PEV sales.  During the first half of 2018, sales grew at an even faster pace. Total number of PEVs on the road in the world is over 3.5 million.

Most PEVs are being bought in several concentrated areas: Scandinavia, Southern Germany, Austria, western cities in the U.S., and eastern cities in China. The fastest growth is in China and Europe – the U.S. seems to be waiting for adoption of the Tesla Model 3 to ramp up.

Norway is the leader by a wide margin in market share, with 46% of all new car sales being PEVs. They’re followed by Iceland with 26%, and more distantly by Sweden with 7%. (Sweden aims to close the gap with Norway, so they’re adding a new tax scheme this July which should accelerate PEV sales).

Fastest growth? That would be Finland, with 144% market growth from last year. South Korea (+138%), Australia (+132%), Netherlands (+122%), Spain (+118%), and Canada (+114%) are following closely. China’s already-established market grew 113% from 2017, reinforcing its global leadership in total sales.

One especially exciting development is that the electric car market might be edging just a little bit closer to profitability. There were 100 models of PEVs on the market this year, most of which accounted for 2,000 to 11,000 vehicle sales per model in Quarter 1 – fairly standard production levels when automakers aren’t turning a profit. But the latest Leaf model had over 40,000 sales in first half of 2018 – if the Leaf reaches 100,000 by the end of 2018 (mass production), it probably means that Nissan is moving closer to clearing a profit with Leaf production.

The expectation is that by the end of 2018, the global PEV market will make up 3% of auto sales, and continue on its upward trajectory, with several vehicles dedicated for EV powertrains.

The PH&EV Research Center of ITS-Davis continues to watch the PEV market worldwide – collaborating with partners to try to understand what is moving the market in each region.  A May visit to Norway and Sweden led to more insights on their markets, and a meeting with our International EV Policy Council that focused on the role of incentives, infrastructure, and consumer awareness in EV adoption. We’ll be watching the impacts of changing regulations and tariffs through PEV sales, globally and here in California.

The rest of the world is on track for continued growth of the EV market. By keeping in place forward-facing policies, the U.S. also will remain plugged-in to the electric mobility future.

 

Tom Turrentine, Ph.D., is the Founding Director of the Plug-in Hybrid & Electric Vehicle Research Center of ITS-Davis

Kathryn Canepa has been an undergraduate research assistant with the Plug-In Hybrid & Electric Vehicle Research Center for two years.  She recently graduated with her Bachelor’s degree in Sustainable Environmental Design.

Why, you ask, would I conduct 42 interviews with planners, state agency staff, and non-profits working on transportation and city planning? I am a researcher at the Institute of Transportation Studies at UC Davis. I study the societal impacts of ridehailing services, like Uber and Lyft. Ridehailing is a hot topic, and the subject of much commentary from prominent transportation experts. It is the focus of the recent book that I co-authored with Dan Sperling, Three Revolutions: Steering Automated, Shared, and Electric Vehicles to a Better Future.

My main goal in conducting dozens of interviews was to get perspective on how to help communities maximize the benefits from all the ridehailing cars rolling around on their streets. The people I chose to interview are on the front lines during a revolutionary time in transportation, and understanding their diverse perspectives is key to developing research-based policies with real potential to win widespread support and generate positive impacts. At the end of the study I will step back and integrate the themes of these interviews, and report on trends and insights. Much like this blog, I will also share anecdotes along the way.

Interview Questions

I asked interviewees about their expectations of the impacts of ridehailing services. I asked about possible actions they could take, or are already taking to align ridehailing with their sustainable transportation goals. I also asked about who should be involved in policy development and implementation, and what they see as the biggest challenges to getting policies, programs or other actions in place.

Local Governments Want to Balance Statewide Guidance with Local Control

I am hearing that local governments want to retain control over the details of addressing the impacts of ridehailing in their jurisdictions. Many of those I spoke with value a coordinated statewide effort to set targets and provide a bird’s eye view to find best practices. But across the board, local government stakeholders want to be sure they can address ridehailing in a way that fits the needs of their unique areas. This is not surprising, and not the first time California would need to strike such a balance between local control and state coordination. For example, AB 32 and SB 375 set goals for greenhouse gas emissions reductions, but decisions about how to reach these goals are largely left to local jurisdictions. This approach makes sense; there is a huge variety among California communities.

As one interviewee pointed out, we must start thinking about dense urban areas of San Francisco as a unique case for Uber and Lyft, rather than representative of the experiences of communities across California. The challenges arising in San Francisco are relevant to other densely populated areas, but not all. Allocating right of way and curb space is a different ball game in less dense or rural parts of the state.

Impacts, and integration, with public transit will also look different in each region and city. Some California counties—Trinity County and Alpine County, for example—have barely more than 1,000 residents. Counties like these would embrace the increased presence of ridehailing services, as a means to expand public transportation, which often has limited coverage and hours of operation, as well as long wait times in these rural areas. Other parts of California are visited by huge numbers of tourists, with traffic patterns resulting not from commuters but from visitors to places like Lake Tahoe. Interviewees from these areas are looking for ways to alleviate challenges arising from increases in vacation home rentals like Airbnb. Ridehailing could encourage visitors to leave their cars at their vacation rentals, and serve as a collector through neighborhoods.

Policies and programs addressing ridehailing must be flexible enough to address the impacts occurring across the diversity of California communities, but specific enough to offer real guidance and targets.

Fees and Preferential Curb Access May be Effective, If Implemented Correctly

When I asked about specific policy approaches to align ridehailing with sustainable transportation goals, most interviewees were not in favor of a ridehailing tax, something recently introduced in Chicago. Additionally, a number of interviewees pointed out that policies involving pricing should target all single passenger vehicles, not just those involving ridehailing. Discussions also highlighted political and equity challenges associated with pricing strategies.

Attitudes towards policies related to the use of public curb space or right of way were more open. A number of creative approaches arose, including identifying strategic partners such as bars, night-clubs, and tourist attractions. The idea is for preferential multi-passenger – as opposed to single passenger – loading areas to prevent driving under the influence, or to allow multi-passenger travelers to avoid the trek from far away and congested parking areas in tourist destinations. Enforcement of preferential pickup/drop-off access for multi-passenger trips is the primary challenge noted by a number of interviewees.

On the surface, I heard disagreement about the potential ways ridehailing may integrate with, complement, or impact public transit. Some smaller and more rural areas embrace the potential for ridehailing services as a cost effective means to improve public transportation, though many are waiting to see the outcomes of existing pilot programs. Others cautioned that transit agencies must be flexible and willing to learn about future mobility. And a number of interviewees expressed concern about the loss of union transit jobs if ridehailing supplants public transit. Ridehailing is already blurring the lines with public transportation and policy addressing the relationship between new and existing services must enable transit agencies to modernize and take advantage of these services, while at the same time maintaining equity in service and employment practices.

Interviewees would also like to see policy development address the links between automated vehicles and ridehailing as well as information sharing and transparency about future technologies in order to be forward thinking. Again many interviews covered the need for state and federal leadership to address these issues, convene lessons learned and disseminate best practices.

Is Your City Testing the Waters or Jumping Right In?

Interviewees were split into three main groups in terms of their activities related to policy for sustainable transportation and ridehailing. A few spend very little time thinking about this topic, reporting that Uber and Lyft have not been in their area for long, do not provide a substantial level of mobility, or do not pose any challenges.

In the middle ground were stakeholders that are thinking and talking a lot about ridehailing, but taking a wait-and-see approach. Last, there were some interviewees who are already doing a lot to address these topics within their local jurisdiction— typically in larger metropolitan areas, or rural areas with a strong desire to improve public transportation.

What’s Next?

Policy making related to sustainable transportation and ridehailing is still in early stages. Pilots are testing some approaches and the policy dialogue continues. Local governments should advocate for local control but be willing to work within state level frameworks. State regulators should provide meaningful guidance and address the needs of California’s diverse stakeholders and communities.

This blog is based on current research being conducted by Susan Pike, a postdoctoral researcher at ITS-Davis. More information on the study can be found here.

This blog is co-written by Amy Myers Jaffe, the David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Program on Energy Security and Climate Change; and Joan Ogden, professor of environmental science and policy at UC Davis and director of the Sustainable Transportation Energy Pathways (STEPS) program at ITS-Davis.

It was originally published by the Council on Foreign Relations.

The United Kingdom is moving forward with a novel plan to lower carbon emissions in home heating by injecting low carbon hydrogen into the country’s natural gas grid. National Grid’s Cadent Gas and Northern Gas Networks, together with Keele University, have been studying how to safely add hydrogen (H2) to natural gas residential networks to clean up the country’s heating sector which constitutes a fifth of the U.K.’s total carbon emissions. The pilot, if successful, would put more teeth behind the idea of natural gas as a bridge to lower carbon substitutes.

However, there are many technical barriers to the practice that could be more than meets the eye. Hydrogen embrittles many of the steels used for natural gas pipelines, creating the potential for dangerous leaks. Some sections of the U.K. system already have advanced materials more suitable for hydrogen transport but adjusting end-use appliances to be hydrogen blend ready still needs to be done. The current hydrogen blending pilot will begin with safety work in 130 homes and businesses in a limited geography to convert appliances and avoid any dangerous leaks. Recent U.S. studies suggest that transporting a hydrogen-natural gas blend over an existing natural gas pipeline network safely is technically possible at levels between 5 to 15 percent hydrogen by volume, assuming the system in question is in top notch maintenance with no potentially dangerous cracks or leaks. Current European regulations allow between 0.1–12 percent hydrogen in natural gas lines. All analyses stress the critical importance of a case by case assessment before introducing hydrogen into a natural gas system. Officials are saying the U.K. system can specifically accommodate 20 percent given its history and materials. For residential use, U.K. officials believe some six million tons of carbon could be saved if the program could extend across the country.

But blending does not necessarily enable major reductions in greenhouse gas (GHG) emissions in transport applications, unless the “green” hydrogen—that is hydrogen produced from renewable sources as opposed to chemically “reformed” from methane—can be separated from the blend and then delivered to a highly efficient fuel cell vehicle. At this juncture, our newly published survey article of the latest science shows that costs to do so are currently prohibitive. Blending into existing networks ultimately limits the scale of possible H2 fuel adoption, because of the technical constraints on the allowed hydrogen fraction. For these reasons, locations such as Germany or California that intend to make a large H2 fueling push for automobiles are likely to build out separate networks, rather than relying on upgrading existing natural gas distribution systems.

Natural gas is already in wide use as a fuel for fleet vehicles, medium-duty work trucks, and short haul drayage trucks. Liquefied natural gas (LNG) is increasingly being used in long haul freight applications. By contrast, hydrogen fuel cell vehicles are just beginning to be adopted in some early adopter regional settings, mainly for light-duty passenger applications. About 5,500 hydrogen cars are on the road today. Interest in using hydrogen fuel cells for zero emission medium- and heavy-duty transport is also growing. A few dozen hydrogen fuel cell buses and work trucks are being demonstrated.

California policy makers were hoping synergies between natural gas fueling infrastructure and hydrogen could ease transition costs of shifting to hydrogen to get deep cuts in transport related GHG emissions. But our work suggests that biogas could be a better fit in the coming years. We find that it is not going to be commercially rewarding to re-purpose or overbuild natural gas fueling station equipment and storage for future hydrogen use. Ultimately, a dedicated renewable hydrogen system would be needed for hydrogen to play a major role in reducing transport-related GHG emissions. In the meantime, California is investigating the benefits of greening its current truck fleets by blending cleaned up bio-methane, so called renewable natural gas, into the natural gas fueling system in the state. Injection of landfill gas would be one of the more commercial and productive alternatives, for example. However, the bio-methane resource is smaller than the future potential of hydrogen manufacturing, which has led California to continue to promote a pilot for hydrogen fuel cell vehicles and infrastructure in select markets such as Los Angeles, as one of the central pillars in its strategy toward a zero-emissions, low carbon future.

For a related paper by the authors, published in Energy Policy, click here.

 

In 2017, several automakers and policymakers announced commitments to a transition to electric vehicles:

• Toyota set a goal to sell more than 1 million electric vehicles by 2030; Volvo aims to beat Toyota by doing the same by 2025;
• VW’s goal is 25% of its vehicle sales will be electric by 2025; BMW’s goal for that year is 15% to 25%;
• Mercedes-Benz has allocated $11 billion and Volkswagen group around $40 billion dollars to the development of electric vehicles;
• Norway has called for all new cars sold there to be electric by 2025; France, the United Kingdom, and the State of California aim to achieve the same by 2040; and
• China has set a goal for 20% of new car sales to be electric by 2025.

Meanwhile actual sales are tiny. A total of 780,000 on-road PEVs have been sold in the U.S., representing just 0.3% of the 243 million passenger cars and light-duty trucks on the road. [PEVs include both plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs)]. In California, less than one percent are PEVs. PEVs accounted for only 1.1% of U.S. vehicle sales in 2017 and were on track to be less than 5% of sales even in California. Many of these are repeat sales to the same households, so an even smaller percent of households are adopting and experiencing these vehicles. And all this with years of purchase incentives, building of charging stations, and outspoken championing of PEVs by California government leaders.

There are no paths to meet the PEV commitments and promises being made by automakers and politicians unless consumers are engaged in the transition to electric drive. Evidence from California says consumers are not. The excitement among policymakers, automakers, and advocates as more PEV models enter the market place, more charging is installed, and more PEVs are sold each successive year is utterly lost on the vast majority of the car-buying public—even in California, touted as being among the global PEV market leaders. The problem is the number of car owning households that are paying attention to PEVs is not growing.

Research at the Plug-in Hybrid & Electric Vehicle Research Center of the UC Davis Institute of Transportation Studies indicates few car-owning households are aware of a transition to PEVs and far fewer are actively engaged. Five surveys conducted from June 2014 to June 2017 assessed Californian car-owning households’ awareness of and engagement with PEVs.

The percent of car-owning households who had already considered a PEV at the time they completed their questionnaire is no higher in 2017 than it was in 2014. The figure below shows the degree to which consumers in California had considered a BEV (2014) or a BEV or PHEV (2017) for their household. In 2014, barely 5% already owned a BEV or had actively shopped for one. About another 13% said they had gathered some information about BEVs but were not seriously considering one. If one believes a transition to electric drive is well underway, then the percentages of households at these higher degrees of consideration should be larger in 2017—especially as the 2017 data includes both BEVs and PHEVs. They are not higher to any significant degree.

According to the California Energy Commission, there were approximately 5,700 non-residential PEV chargers installed in California in August 2014; this more than doubled to over 11,500 by August 2017.

By and large, Californians didn’t notice the increase in PEV charging infrastructure. The figure below shows the distributions of how many people report seeing PEV chargers in the parking facilities they use. The doubling of away-from-home PEV charging infrastructure barely registers in the percent of California drivers sighting that infrastructure. In fact, the increases from 2014 to 2017 are so small that the statistically defensible conclusion is they are not different. That’s the good news.

Further, we ask households to rate their agreement with the statement “There are enough places to charge electric vehicles” on a scale of strongly disagree (-3) to strongly agree (+3). The mean scores for 2014 (-0.68) and 2017 (-0.61) are not statistically different; both indicate on average slight disagreement there is enough PEV charging. Again, that’s the good news.

The bad news? Despite more than doubling the number of away from home PEV chargers from 2014 to 2017, the percentage of California households who registered the strongest disagreement with the statement, “There are enough places to charge electric vehicles”—that is, the percentage of people who scored the statement as -3—nearly doubled from 13% in 2014 to 23% in 2017.

What about the increasing number of makes and models of PEVs offered for sale between 2014 and 2017? According the California Air Resources Board’s Drive Clean website, this nearly doubled, too between 2014 and 2017. In 2017, fewer Californian’s were able to name a PEV for sale than had been able to in 2014. Awareness of incentives? Not higher in 2017 than in 2014. Percentage of car-owners that understand how hybrid, PHEV, and BEVs vehicles are fuelled? Not higher.

Californians are not deciding they don’t want PEVs. Rather, they remain to a great extent unaware of PEVs and anything about them. California households by the millions are simply not engaged in any transition to PEVs. Anyone serious about instigating a sustained transition of road transport to electric drive should undertake several science-based actions:

• Market the electric-drive transition: Social marketing to promote the need for and value of a transition to electric drive automobiles
• Market electric-drive vehicles and supporting services: Traditional marketing by automakers, electricity providers, and charging infrastructure suppliers of their products and services
• Create connections: Social media activities connecting people of similar motivations to own and drive PEVs
• Create real PEV experience: Ride and drive events and the use of PEVs in shared mobility and vehicle rental applications
• Create virtual PEV experience: Enhanced and customized information and virtual PEV experiences through websites and mobile apps
• Engage the whole sales chain: Automobile dealer education and motivation programs
• Measure to manage: Ongoing tracking of the impact of these activities on consumers and PEV sales

Dr. Ken Kurani is an associate researcher and Dr. Scott Hardman is a postdoctoral researcher at the Plug-in Hybrid & Electric Vehicle Research Center at ITS-Davis.

The transportation world is moving towards an electric future. More EVs are available than ever before. Leading global automakers are pledging to transition to cleaner electric fleets. Entire countries are planning to phase out fossil-fuel vehicles, thereby lowering harmful emissions that are detrimental to human health.

The United States is currently a leader in EV technology and innovation, thanks in part to the federal tax credit that has helped bridge the gap in cost between plug-in vehicles and their conventional gas-powered counterparts. Our research shows that these incentives play a key role in building the EV market—by creating policy certainty for automakers as well as encouraging the purchase of EVs.

Overview of the tax credit

The Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 created a federal tax credit for EVs to serve as a purchase incentive. The credit applies to all plug-in vehicles (PEVs), including plug-in hybrid vehicles (PHEVs) and “pure” battery electric vehicles (BEVs) with a minimum battery size of 4kWh (which is met by all personal vehicles available to consumers. The amount of the credit depends on the vehicle size and battery capacity. Long-range PHEVs and all available BEVs receive the maximum credit of $7,500, while shorter range PHEVs receive $2,500 or an intermediate amount. More than twenty states also provide some form of purchase incentive, generally at significantly less value than the federal credit.

The credits are designed to support the EV market until it becomes self-sustaining. This is a strategy that has worked in the past: telecommunications, aerospace, computers, and pharmaceuticals are examples of new market sectors that launched and flourished thanks to early government support. As companies bring EVs to market, manufacturing costs will drop. Indeed, manufacturing costs of batteries and EVs have fallen dramatically already. Because EV fuel and maintenance costs are very low, providing government assistance to help offset initially high upfront costs is key to ensuring consumer access to EVs.

The federal EV tax credit is strategically designed to avoid wasting taxpayer money on mature businesses that do not need extra support. The total number of rebates provided to a given EV manufacturer phases out after that manufacturer reaches 200,000 qualifying sales. The credit remains available for other manufacturers to encourage latecomers to enter the market. The first wave of EV manufacturers—such as General Motors and Tesla —will hit the 200,000 sales mark in 2018 leading to a phase-out of federal assistance for their vehicles. However, many other automakers are just entering the EV market in a serious way now. If the tax credit vanishes, this momentum may too.

The impact on the EV market

Research shows that the federal EV tax credit is having a real and positive impact on the EV market. Surveys conducted by the Institute of Transportation Studies at University of California, Davis (ITS-Davis) show that nearly 30% of consumers who bought EVs in early markets cited the EV credit as a factor that influenced their purchasing decisions. The availability of the credit had much less influence on (presumably less price-sensitive) buyers of the more expensive Tesla Model S. Almost half of Nissan Leaf buyers and 40% of Chevrolet Volt buyers said that they would not have purchased their cars without the credit incentive. This finding was validated by a systematic literature review released by ITS-Davis in 2017. 32 out of the 35 studies examined in the review identified clear relationships between financial purchase incentives and the sales of PEVs in the U.S. and around the world. The review also found that removing incentives too early could negatively impact EV markets. In 2015, for instance, the Netherlands decided to focus their incentive on only all-electric vehicles, removing support for plug-in hybrids. Plug-in hybrid sales dropped precipitously the following year.

Closer to home, we can look at what happened to electric vehicle sales in the state of Georgia. When the state purchase rebate was removed at the end of 2015, the federal tax credit remained as the only EV purchasing incentive. This was not enough to sustain the budding EV market, and sales plummeted as a result.

The Netherlands effectively forced a switch to all-electric vehicles for buyers who were influenced by the incentive. In Georgia, unfortunately, EV sales dropped and shifted back to conventional vehicles.

Need for stable, research-informed policy

Automakers rely on predictability in the regulations that govern their sales, whether those are fuel-economy standards, zero-emission vehicle targets, or purchase incentives to help launch new promising technologies. Automaker plans for upcoming plug-in vehicle models were based on an expectation that the federal tax credit would remain in place for the first 200,000 PEV sales from each manufacturer. With this in mind, they have plans to introduce dozens of new and updated models to the market in the next 3–5 years, including nearly 10 new and second-generation releases in 2017 alone. Canceling the credit will have disproportional effect on companies who sell most of their electric cars in the U.S. market. In 2012, half of EV sales were in the U.S. But the rapid development of other markets has reduced the U.S. share today to less than 20% and next year it probably will be half of that.

Removing the federal credit will reduce the ability of domestic car companies to compete in this global market.

There are certainly ways that EV incentives could be improved. Because incentives are less important to wealthy buyers of expensive vehicles, and to improve access to EVs across income groups, some states are considering capping rebates based on purchaser income or vehicle manufacturer’s suggested retail price (MSRP). Research also shows that full electric vehicles have higher benefits to the environment and should receive higher incentives. Some studies show that point of sale rebates are more effective at incentivizing sales than tax credits. There have also been proposals to provide some incentives to car dealers, who are generally less familiar with EVs and may be less inclined to sell EVs than conventional vehicles, which bring in more recurring revenue from maintenance.

We should debate the best and most cost-effective incentives to support the domestic automotive industry and the development of the EV market. What is certain, is that incentives are hugely important. The federal EV tax credit could certainly be improved, but incentives are clearly needed. Our nation’s health and highways will benefit from a growing number of cleaner vehicles that are within reach of all American consumers.

Gil Tal is a researcher at the Plug-in Hybrid & Electric Vehicle Research Center of ITS-Davis and graduate advisor for the UC Davis Transportation and Technology Graduate Group.

Austin Brown is executive director of the UC Davis Policy Institute for Energy, Environment, and the Economy.

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Download a PDF of this blog.

Three transportation revolutions are in sight, and together, they could help reduce traffic, improve safety, improve livability, and eventually save trillions of dollars each year and reduce urban transportation carbon dioxide emissions by 80 percent or more worldwide by 2050. Our new report from the Sustainable Transportation Energy Pathways (STEPS) program of ITS-Davis, done in cooperation with the Institute for Transportation & Development Policy and released May 3rd, tells us how.

The revolutions in question are electric vehicles, automated (driverless) cars, and shared mobility (multiple people sharing a trip, in the form of ride hailing or transit). All three of these revolutions are coming but it is not clear how fast, or which if any will dominate. But one thing is certain: to receive the most benefit from these revolutions, the most critical component is something most preschoolers know: Sharing is caring.

The report looks at how the revolutions may unfold out to 2030 and on to 2050 around the world, and delves into three urban travel scenarios surrounding the three transportation revolutions:
• Business as usual (BAU): a future without widespread electrification or automation
• “2 Revolutions:” electrification and automation are embraced but shared mobility is not
• “3 Revolutions:” electrification, automation and shared mobility are all widespread

Each revolution can provide important benefits. Electric vehicles have the potential to be near-zero CO2 emission, since they do not emit any emissions directly, and it is possible (and necessary) to decarbonize electric grids around the world over the coming decades. Automation may provide important safety benefits, particularly in the developing world where accident and injury/mortality rates today are often very high.

But the analysis and scenarios in this study find that it is shared mobility that provides the largest potential benefits, in the form of vastly reduced traffic, for starters. In fact widespread ride sharing could help move global transportation into a future that not only saves energy and emissions but also decongests highways, frees up parking spaces for other urban uses, cuts transportation costs, and improves walkability and livability.

It is important to emphasize that the use of “shared mobility” here does not include single-occupant ride-hailed Uber or Lyft vehicles, but only cases where multiple people share the ride. It also includes new forms of on-demand public transportation, such as small commuter buses with flexible routes. Active transportation, such as cycling, complements this scenario.

Benefits worldwide

The report spans eight global regions, including five major markets: United States, Europe, China, India and Brazil.

The different global regions vary considerably in their starting points. For example, the United States is highly car-dependent, whereas India’s challenge will be to preserve and enhance shared mobility options they already have. Yet, across the globe, the 3 Revolutions, or 3R, scenario holds the most environmental and societal benefit.

As shown in the figures below, the greater range of modes (on a passenger kilometers basis) in India is clearly evident compared to the U.S., but in both cases the overall travel levels are lowest in the 3R scenario, with a far higher share of shared mobility (saving even more vehicle kilometers) than in the other scenarios.

Potential pitfalls of not sharing

Without a concurrent shift away from private vehicle ownership and toward ride sharing, the potential for electric, autonomous vehicles to reduce traffic and sprawl are severely limited, and CO2 reductions will be significantly less than with sharing.

Driverless vehicles alone could actually increase traffic congestion. Imagine people spending even more time in their cars or the possibility of zero-occupant, driverless vehicles continuously circling the streets rather than parking.

Electrification is also very important. We estimate that an autonomous vehicle world without electrification or trip sharing would not cut carbon dioxide emissions at all, and might actually increase them.

The road to achieving emissions targets

The report, “Three Revolutions in Urban Transportation,” comes the week before an international climate change meeting begins in Bonn, Germany. The climate talks will focus on implementing the 2015 Paris Agreement, which targets a 2 degree Celsius or lower cap to an overall temperature change from global warming. This target requires all nations to cut their carbon dioxide emissions dramatically by 2050. We note that the “3R” scenario would meet that benchmark for cities, and possibly go further. As shown in the figure below, the global urban passenger transportation CO2 emissions about 3 gigatonnes in 2015 rises to over 4.5 gigatonnes by 2050 in our BAU scenario, whereas it drops to below 2 in our 2R scenario (mainly due to electrification) and to below 1 gigatonne in 3R (due to much greater use of transit, non-motorized modes, and ridesharing in that scenario. It is also less dependent on decarbonized electricity to reach its 2050 level.

The effects of 3R on travel, and the numbers of light-duty vehicles, are shown in the figure below. Due to the much more intensive use of each commercial, shared vehicle, along with greater use of transit and non-motorized modes and a general reduction in trip lengths due to more compact cities, results in more than a 2/3 reduction in the stock of LDVs worldwide (and, as shown here, in the U.S.) in 2050 compared to the peak level in 2025 (and 75% below the peak reached in 2R). This opens up tremendous possibilities for re-tasking land use, such as for more bike lanes, more dense development (given fewer parking lots) and other changes to cityscapes.

3R would cut transportation costs by $ trillions

Perhaps the most surprising result is that the 3R scenario costs far less to society by 2050 than the 2R scenario, with savings beginning around 2030 and increasing per year to reach over $5 trillion per year worldwide in 2050. This includes savings in fuel costs, the costs of new vehicle purchases (given dramatically lower sales and stocks of vehicles), and the costs of building and maintaining road and parking infrastructure. Even higher expenditures on better and more extensive transit systems do not offset the other savings very much.

We recognize that bringing about these revolutions won’t be easy. The report outlines needed policies, and says unprecedented levels of policy support and coordination are needed at the local, state and national levels.

The report assesses policies including those that incentivize widespread adoption of electric and driverless cars, as well as support for ride sharing, public and active transport, and land-use planning that helps shorten most vehicle trips. Such policies could consider fees tied to vehicle CO2 emissions, vehicle occupancy, and possible restrictions or heavy charges on private ownership of autonomous vehicles, along with strong disincentives for zero-occupant trips. Bicycle and e-bike sharing systems also need to be encouraged along with transit system innovations.

The report was funded by ClimateWorks Foundation, William and Flora Hewlett Foundation, and Barr Foundation.