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“We must be realistic about electric cars”

“We must be realistic about electric cars”

Wednesday, 14 de February de 2018

Read the first part of FCA’s CEO Sergio Marchionne’s speech during the ceremony at the Università di Trento which awarded him the title of Doctor in Mechatronics Engineering

It’s obvious today that we are on the verge of the biggest revolution, in terms of individual transportation, since the time when cars replaced carriages. Disruptive and technology-driven trends are transforming the automotive industry. But there is little consensus on what the future of the industry will look like in ten or twenty years as a result of these trends. Unfortunately, I don´t have a crystal ball and no absolute truth to share with you. What I can do, however, is share my thoughts on the factors that are likely to shape the next few years.

With these factors in mind, we can think about how we are approaching this journey.

Whenever I participate in a round of questions and answers, whether it’s with university students, analysts, investors or the press, there are two questions that always come up. The first is about my perspective on electric vehicles, and the second has to do with autonomous vehicles. These represent the most significant technological changes we are likely to see in the near future.

Reducing our dependence on oil is one of the biggest challenges that our society – and the planet as a whole – will face in the coming years. The proliferation of alternative forms of propulsion is largely the result of an emerging global awareness that carbon emissions are a major contributor to climate change.

As an economic sector, transportation accounts for 14% of all greenhouse gas emissions, mainly because of the predominant use of petroleum based fuels such as gasoline and diesel. The automotive sector accounts for approximately half of this sector’s CO2 emissions, with the remainder coming from rail, air and sea transport.

Marchionne receives the title of Doctor in Mechatronics Engineering. Next to him, the director of the Università di Trento, Dario Petri, and dean Paolo Collini. Top photo: executives during a meeting with the students (photos: Giovanni Cavulli / Unitrento)

Marchionne receives the title of Doctor in Mechatronics Engineering. Next to him, the director of the Università di Trento, Dario Petri, and dean Paolo Collini. Top photo: executives during a meeting with the students (photos: Giovanni Cavulli / Unitrento)

Even if “transportation” itself cannot provide the solution, we can certainly play an important role in reducing greenhouse gases in general. However, we must be clear: there is no single solution and no magic formula for this problem. Rapid solutions and magic recipes that advocate a permanent solution are pure fantasy. We saw this a decade ago when hydrogen was being promoted as a panacea for environmental problems.

It became clear that, beyond its duration factor and fuel cell costs, if hydrogen were not produced by a clean process, large-scale implementation would only displace the problem: although this gave us fairly clean cars, we would still have enormous amounts of energy and pollutant emissions linked to the use of fossil fuels from the production of hydrogen itself. So, hydrogen has gone out of style. Now it’s the electricity’s turn.

(I am not excluding hydrogen as a potential solution, but it would require a realistic and insightful approach).

At FCA, we work and continue to operate on all the different forms of vehicle electrification: from light hybrid systems with 48-volt technology with integrated Start-Stop system, to full hybrid systems using electric propulsion and gasoline; plug-in hybrid systems and fully electric propulsion. But we cannot ignore other important elements.

Consider the electric version of the Fiat 500, for example. Five years ago, we launched the 500 electric in markets like California, where state laws impose a minimum volume of “zero emission vehicles.” The truth is that, for every electric Fiat 500 that we sell in the United States, we lose about US $ 20,000. Producing it on a large scale would, of course, be extreme economic masochism.

But the current limitations for this technology are not just about costs, battery life, recharge time or an underdeveloped recharge network. There is a much more important aspect: a very obvious aspect, but almost never commented.

Before we can state that electric vehicles are the ultimate answer, we need to consider the environmental impact of the entire life cycle, from start to finish, particularly as to how electricity is generated. About two-thirds of the world’s electricity is produced from fossil fuels, with coal – about 40 percent – being the worst option in terms of pollution. Over the past 20-25 years, the percentage of electricity generated by fossil fuels has effectively increased by almost 10 percentage points.

The Fiat 500e, FCA's first 100% electric car, launched in 2013 in the state of California, USA. "We must first address the question of how to produce clean energy," says Marchionne. "Forcing the introduction of electric cars is a great threat to the planet"

The Fiat 500e, FCA’s first 100% electric car, launched in 2013 in the state of California, USA. “We must first address the question of how to produce clean energy,” says Marchionne. “Forcing the introduction of electric cars is a great threat to the planet”

The total amount of electricity produced globally has more than doubled in the last 15 years, elevating the use of fossil fuels, in terms of tonnage, to alarming levels. Even if electrification is widely promoted – often for political reasons – as the solution that will save the planet, the reality is somewhat different. Carbon emissions linked to electric cars based on emission of coal are, at best, equivalent to those of gasoline vehicles.

Four years ago, research conducted by the Norwegian University of Science and Technology concluded that electric vehicles pose a threat to the environment. In terms of global warming, it is almost twice that generated by traditional vehicles. We already have the highest concentrations of CO2 in the atmosphere of the last 66 million years. It is expected that by the year 2100 we will be close to 1,000 ppm. This level of CO2 would result in an ice-free planet, with a sea level rise of over 40 meters. A large-scale increase in electricity production would only aggravate the problem, bringing these concentrations beyond the critical point.
We need to be realistic.

Electric vehicles may seem like a technological marvel, especially when it comes to reducing emissions in urban centers. However, this technology is a double-edged sword. Forcing the introduction of electric vehicles on a global level, without first resolving the question of how to produce clean energy, poses a major threat to the very existence of the planet.

The introduction of electric vehicles must be done without the imposition of regulatory requirements, and in the meantime we must continue to take advantage of other available technologies. Of course, it would be better to focus on the improvement of traditional engines and the expansion of the use of alternative fuels, specifically natural gas which, in terms of extraction and physical properties, is currently the cleanest and most efficient.

* Sergio Marchionne is CEO of Fiat Chrysler Automobiles. On October 2, he was awarded a PhD in Mechatronics Engineering from the Università di Trento, Italy. The university asked him to give a speech about the future of the automotive industry and how technology is changing the industry. Trento has one of the group’s largest R & D centers in the world, the Centro Ricerche FCA. Read tomorrow the second part of Marchionne’s speech during the event on autonomous cars.

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