Is an electric car a cleaner car?

The recent study on carbon intensity of electric vehicles (EVs) by Christoph Buchal, Hans-Dieter Karl and Hans-Werner Sinn gained much attention in the German press and beyond.

Buchal and co-authors make four points. First, they model the carbon emissions per kilometre for an electric car (the Tesla Model 3) and a diesel car (Mercedes C220 Diesel). To reflect all relevant CO2 emissions, the authors include the carbon emissions generated by the production of the EV’s battery and the production of the electricity needed to charge the EV. To calculate the carbon intensity of the electricity with which the EV is charged, the authors take the case of the German electricity mix in 2018, where 52% of electric power was produced from fossil fuels (mostly coal and natural gas) resulting in 550 grams of CO2 emissions per kilowatt-hour (kWh) of electricity. In total, the authors’ calculations yield higher carbon emissions per kilometre travelled in the Tesla compared to the Mercedes. Therefore, the authors argue that a replacement of diesel cars with EVs in Germany is not going to help in reducing carbon dioxide emissions.

Second, the authors take this result as a case in point to criticise the EU legislators’ approach of assigning zero-emissions to electric vehicles when calculating fleet-wide average emissions. Under EU legislation, car manufacturers have to keep the average carbon emissions of all new cars sold below a certain target. After 2020, this target will be more ambitious. When calculating average emissions, the EU rules assign zero carbon emissions to electric cars, since they do not emit carbon locally. The Ifo article argues that the EU rules are a targeted industrial-policy deception (“zielgerichtete industriepolitische Täuschung”) that aim at drastically altering the competitive situation between European carmakers. The authors assert that France, whose car industry they claim is specialised in the production of EVs, coalesced with the European Greens to press for enormously demanding standards. And these standards lead to a severe deterioration of German carmakers’ market position.

Thirdly, having shown that battery electric cars are problematic, the authors propose fuel cell cars as an alternative technology to battery electric cars. They argue that hydrogen fuel is a superior technology because it can be produced carbon-neutral, can be stored over a long time-span and allows for a rapid charging process.

Finally, Buchal and his co-authors voice general concerns about the German “Energiewende”. They argue that the very short time-horizon for the decommissioning of nuclear power plants will lead to a situation where newly built renewable-energy plants only substitute nuclear energy, and the carbon-intensity of the German electricity mix might even increase. Furthermore, the authors argue that an increasing share of volatile renewable-energy sources, such as wind and solar power plants, in the energy mix will lead to an increasing amount of conventional excess capacity, which will need to be maintained to ensure the availability of electricity on cloudy and windless days. According to the authors, these parallel structures will increase fixed costs substantially, which will result in Germany running a very expensive electricity production.

Reactions to the Ifo article were manifold and mostly very sceptical. Many authors criticised the method with which the authors compare electric and diesel cars and reject the authors’ conclusion that electric cars have a larger carbon footprint than petrol-fuelled cars.

Stefan Hajek writes in the WirtschaftsWoche that the study’s conclusion runs very much in contradiction to a large series of recently published, serious international studies on that topic (such as the one by Frauenhofer ISI or the one by IFEU). Hajek argues that the discrepancy is due to the fact that the Ifo article assumes best-case scenarios for the diesel car and worst-case scenarios for the electric car.

Hajek highlights several cases where, he argues, the study’s assumptions are particularly favouring the emission estimates of the diesel car: the use of an outdated and much-criticised testing standard as a proxy for fuel consumption, an underestimation of the lifetime of a Tesla battery, the omission of carbon emissions that arise only for the production of a combustion engine, and the assumption of a carbon-intensity of German electricity that is higher than what the German Federal Environmental Agency reports.

Moritz Diethelm agrees with much of the criticism stated by Hajek: a battery lifetime of 150,000 kilometres is much lower than what is observed in reality, and the assumptions about fuel consumption (the above-criticised testing standard) that are too low for both cars, and therefore inflate the weight of carbon emissions that are due to the battery-production in the overall emission-per-kilometre calculations.

Diethelm also points out that the selected two cars belong to different categories which are not comparable, if only because the Tesla has more than double the amount of horsepower of the Mercedes. Furthermore, Diethelm disagrees with the article’s approach of using the average German electricity mix, he argues that many EV drivers are recharging on exclusively green electricity or even electricity from their own solar panels.

Nevertheless, Diethelm agrees with some points that are made in the Ifo piece. He points out that because of the energy-intensive production process of EV batteries, it is crucial to take into account the electricity mix of electric-car manufacturing plants. Furthermore, Diethelm agrees with the Ifo article that green gas as a potential future technology should not be excluded ex-ante. He argues that technology neutrality is interesting and important as it keeps different competing technologies in the market – including battery electric vehicles.

Further criticism of the calculations used in the Ifo article were voiced by Auke Hoekstra on Twitter. He points out that, since an electric car consumes electricity over its entire lifetime (the Ifo study assumes 15 years), assumptions about carbon emissions per kWh should reflect the fact that the German energy mix is expected to decarbonise substantially over the lifetime of the car.

Forschungsstelle für Energiewirtschaft, a German research institution, published a statement saying “the [Ifo] article draws unrealistic and inaccurate conclusions on the basis of greatly simplified guidelines [own translation]”. The statement insists that the Ifo article overstates the batteries’ carbon impact, that it makes flawed generalisations based on the example of two cars and that it ignores the expected decline of the German electricity mix’s carbon intensity over the lifetime of the car. The note furthermore disagrees with the Ifo article’s projections of exorbitant electricity costs arising because renewable energy sources are more volatile than conventional power plants. Referring to a recent study by the German Institute for Economic Research, which argues that an 80% emission reduction in the German electricity sector by 2050 can be accomplished with a cost increase of only 15% relative to 2015.

In a comment published on Mr Sinn’s website and in some newspapers, the authors of the Ifo article comment on the criticism they have received for their calculations. They affirm that the assumptions used for the calculations are correct and not biased against the electric car, and that some assumptions are even lenient towards the electric car, for example when they abstain from compensating for the fact that the Tesla car has a range of only 60% of the Mercedes. Furthermore, the authors refer to calculations provided by Volkswagen, which find that the carbon emissions of an electric Golf car, assuming the car is charged with the current German electricity mix, are at pair with the emissions from a diesel Golf. Mr Sinn and co-authors argue that if one compensates for the lower driving range of the electric car, the Volkswagen calculations agree with the Ifo article’s finding that an electric car emits more carbon dioxide per kilometre than a diesel car.

The authors highlight that while they received many reactions to their direct comparison of the two cars, they have not received many replies to the other statements that they made in their piece. For example, reactions to their complaint about EU regulations that assign zero carbon emissions to electric vehicles. The authors reiterate their conjecture that European car manufacturers and states that see electric cars and nuclear energy as a competitive advantage have formed a coalition with environmentally conscious forces in Europe in order to introduce a hidden industrial policy through EU legislation which disadvantages the German car manufacturers.