US to Lead Global Electric Vehicle Push

A recent McKinsey study has identified the US as the future leader of the global electric vehicle movement, with an index showing France second and Germany and China sharing third.

The index was based on nine variables that would largely affect investments in the green sector, according to research analyst
Priyanka Shekhawat. Considering the multi-billion dollar aid the US government has promised and to some extent delivered to the electric vehicle industry, analysts admit that the US does stand a chance of emerging as home to the early EV market.

Shekhawat said that while European nations have focused more on fixing stringent emission regulations, the US has been relatively lenient in terms of such policies. Plans are underway in the country to introduce stricter emission regulations, which are seen as potential measures to promote low-carbon vehicle technologies. In a new ruling released in April 2010, the Barack Obama administration has directed the US Environmental Protection Agency (EPA) as well as the Department of Transportation to enact higher CAFÉ standards (35mpg by 2011) for vehicles up from the current 27mpg. In contrast, Europe already requires a 40mpg average fuel economy for vehicles. The European parliament’s Environment Committee targets implementation of the 130 g/km CO2 limit by 2012 and a long-term target of 95 g/km by 2020, subject to review in 2014.

The US government has ploughed in nearly $2.4 billion towards auto companies seeking to develop electric and plug-in cars under the economic stimulus plan. The US Department of Energy has granted up to $1.5 billion to battery manufacturers to develop highly efficient storage devices and an additional $500 million for related components.

While the McKinsey study suggests that US is at the forefront of global electric mobility, China is not far behind in joint third slot. The country is already being seen as an emerging hub for electric cars by many experts, with estimates that a large chunk of early adopters of EVs could be from China., in a recent analysis, suggested that China could become a leader in the electric car revolution. The Chinese government is pumping large sums of money into EV projects and smart grid development.

For the US, China provides daunting competition not only in the automotive market; it is also marching ahead in the development of green technologies. Many venture capital firms feel China is offering huge potential for growth in the renewable energy sector. The country has considerably raised its market share of both solar and wind energy markets. In the solar market, China expanded its market share to nearly 50% in the fourth quarter of 2009 from only 2% in 2006. The US share on the contrary went down from 43% to 16% in the same period. In the wind energy market, China surpassed US in terms of new installations and wind turbines in 2009, nearly doubling its wind generation capacity from 12,100mGW in 2008 to 25,100mGW at the end of 2009.

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