This article is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.
Climate change requires our societies to quickly adapt to new solutions and embrace new paradigms. With the 260 million vehicles in Europe accounting for 16% of Greenhouse Gas (GHG) emissions, it will not be possible to achieve our carbon neutrality commitments for 2050 by simply replacing existing vehicles by new electric ones. Manufacturers are going to mass-produce new electric vehicles, which is essential. However, we should – and arguably must – seize the opportunity to add to this volume the conversion of existing combustion engine vehicles to electric engines. This process already exists and even has a name: electrical conversion, otherwise known as retrofitting.
In concrete terms, retrofitting consists of removing the internal combustion powertrain, the exhaust and the tank and replacing them with an electric powertrain and a battery pack. Depending on the complexity of the operation, this conversion takes between four hours and two days. It is technically possible on all vehicles (recent, old, buses, trucks, cars, two-wheelers, etc.) and its target use makes retrofitting coherent (power, range).
After one year of work, the French regulation was modified in April 2020 to authorize retrofitting by lifting strong constraints, such as the automotive maker's agreement. The manufacturer of the retrofit unit presents a prototype to the control authority, a technical file and the results of tests performed in an official laboratory. With these elements, if the implementation of the safety standards is validated, the homologation is pronounced for the presented model. There is then no limit to the amount of vehicles of the approved model that can be subsequently converted, as long as the elements remain the same.
The purpose of retrofitting is to deliver a significant ecological impact by converting not only the most polluting and least common vehicles, but also – and perhaps especially - the least polluting but most utilized ones. In either case, the industrialization of mass conversion will reduce costs.
The virtuous aspect of retrofitting is the fundamental rational behind it. Depending on the sources of supply, the autonomy of the vehicle and the conversion process, retrofitting can reduce GHG emissions by 40 to 60%, while ensuring that the vehicle stays in good condition and does not turn into a waste product prematurely.
Also on the Forum Network: Plotting the course for a circular economy transition, by Jocelyn Blériot, Executive Lead, International Institutions & Governments, Ellen MacArthur Foundation
The implementation of low emission zones (LEZ) is an incentive to change vehicles in order to improve air quality in dense areas. However, even if 75% of the new vehicles being sold in France today were electric cars, only 30% of the fleet would be electric by 2035. Retrofitting thus offers a promising complementary solution to new vehicles.
First, a virtuous retrofitting means converting vehicles to electric cars while considering both customers and those working in the automotive industry. Automotive experts are bound to lose business volume since the maintenance of an electric vehicle is 30 to 50% less expensive than for a thermal vehicle. In contrast, retrofitting provides them with a new complementary activity for the next 15 to 20 years. Most importantly, the conversion of thermal vehicles to electric ones is an activity which cannot be relocated.
The climate emergency calls for ambition. Solutions that are not only easy to understand but also affordable are essential in mobilizing as many people as possible in the fight against climate change. By targeting light vehicles and delivering a reasonable range (100-200 km), an "all-purpose vehicle" can be transformed into a virtuous light vehicle with adapted characteristics for an initial cost of 15,000 and various financial aids reaching 5,000€ for a range of 100 km. By scaling up volume through industrialisation, the cost will go down further and should amount to somewhere between 7,000 and 8,000 euros.
What, then, are the steps needed to ensure that retrofitting is taken up on a European scale?
The answer lies first in supporting the European retrofit industry. The starting point begins at the level of regulation, as European homogenization will be essential for this activity to reach an industrial scale. Indeed, approval in one country would then allow marketing in other countries, as is already the case for new vehicles.
Furthermore, "impact" investors are not yet prepared to support this activity. They tend to avoid industrial, hardware or CAPEX investments. However, retrofitting will require significant investments to achieve its objectives. In order to accelerate, financial risks must be taken rapidly.
The success of such an ambitious start also requires communication campaigns to ensure the greatest number of people possible are aware of retrofitting- whether they may be individuals, professionals, administrations or local authorities. A sector cannot reach industrial prices at its start. Subsidies will therefore also be needed to ensure affordable prices and make retrofitting inclusive.
Retrofitting presents us with an opportunity to address climate change in a frugal manner. The degree of ambition and effort we dedicate to this activity will ultimately determine the extent to which it will help reduce GHG emissions and improve air quality. However, in the face of a clear need to ensure a “Just Transition”, its industrialisation stands as a very promising pathway to enable a much wider set of vehicle owners to contribute to the collective effort needed in the fight against climate change.
Efficient use of resources and furthering the transition to a circular economy can help not only material security, but improve environmental and economic outcomes as well. Find out more about the project RE-CIRCLE of the OECD here.
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