The EPN Consulting Newsletter - 083 - July 2017

Dear Colleague,

In the last couple of weeks we read a couple of interesting and revolutionary pieces of news:

- France plans to ban sales of all petrol and diesel cars by 2040

- Volvo decided to make only hybrid and electric car as of 2019

These two plans join others designed by cities that have each different objectives such as increase the use of public transport, introduce Bus Rapid Transit (BRT) services, encourage soft transport modes (i.e. walking and cycling), promote the use of car pooling and car sharing,  up to planning to become a car-free city such as Hamburg by 2025.

All these initiatives are certainly beneficial to the environment and consequently to ourselves as citizens, but let's think a bit about the two major announcements.

France ban - there will be 23 years available to get prepared for this ban. This means at least three important steps have to be carried out pretty in parallel:

1) an extended and diffused network of (fast) car charge points must be installed across the whole country (urban, inter-urban and extra-urban roads as well as motorways)

2) a resilient and reliable smart grids infrastructure must be set up to avoid frequent energy supply service black-outs

3) a heavy incentives plan to convince citizens to buy electric cars, currently more expensive than their corresponding endothermic-engine-powered models

I didn't read the plan in details but this move certainly is going to have an immediate and lasting extremely high cost for the French government and according to their current state of economy, I am not entirely sure they will be able to make it in this time frame.

Volvo's change of strategy - it is understandable as the brand is not as popular as it used to be some decades ago (do you remember that Volvo 240 station wagon model you could see anywhere across Europe?) and they need to revamp it.

I can see some difficulties in gaining shares in the EV market where other car manufacturers have put already their foot in it such as Tesla, Renault, Volkswagen for instance. Maybe with an effective marketing campaign (and high-quality products v acceptable prices) they could convince potential customers to buy their cars.

With regard to hybrid cars, well, the market is already very much crowded with them by nearly any car maker so, again, if they don't offer a robust USP, it will be not easy to acquire customers that have already owned/rented/leased other brands' hybrid vehicles for years.   

Stefano Mainero