Green driving's dirty secret: how clean is your car?

The humble Mitsubishi Mirage has none of the hallmarks of a futuristic, environmentally friendly car. It is fuelled by petrol, runs on an internal combustion engine and spews exhaust emissions through a tailpipe.

But when the Mirage is assessed for carbon emissions throughout its entire lifecycle - from procuring the components and fuel, to recycling its parts - it can actually be a greener car than a model by Tesla, the US electric vehicle pioneer.

According to data from the Trancik Lab at the Massachusetts Institute of Technology, a Tesla Model S P100D saloon driven in the US midwest produces 226 grammes of carbon dioxide (or equivalent) per kilometre over its lifecycle - a significant reduction to the 385g for a luxury 7-series BMW. But the Mirage emits even less, at just 192g.

The MIT data substantiate a study from the Norwegian University of Science and Technology last year: "Larger electric vehicles can have higher lifecycle greenhouse gas emissions than smaller conventional vehicles."

The point of such comparisons is not to make the argument for one technology over another, or to undermine the case for "zero-emission" cars. But they do raise a central issue about the industry: are governments and carmakers asking the right questions about the next generation of vehicles?

Policymakers are pushing the car industry toward a new era, but neither Europe, America nor China have actually set up the appropriate regulatory apparatus to differentiate among electric vehicles and judge their environmental merits. The idea that some combustion engine cars can be greener than some "zero-emission" electric vehicles simply does not make sense in the current regulatory environment.

From a government standpoint, all electric vehicles are equally green - regardless of whether they are big or small, produced efficiently or with great waste, or powered by electricity generated by solar energy or coal.

"Electric vehicles are zero-emission by definition," says Roland Doll, innovation officer at InnoEnergy, a group supporting sustainable energy. "[Regulators] only measure what comes out of the exhaust pipe. Well, there is no exhaust pipe."

To capture electric cars' full environmental impact, regulators need to embrace lifecycle analysis that takes into account car production, including the sourcing of rare earth metals that are part of the battery, plus the electricity that powers it and the recycling of its components. Such studies have become popular among researchers who favour direct comparisons with petrol and diesel cars. If these studies were to inform regulatory policy, analysts say it would have a big impact on what cars will be on the road in the coming decades.

As things stand, a small car like the Mirage could be illegal to drive in cities across Europe, the UK and China by 2030, as incoming bans on combustion engine cars will pay no attention to fuel economy or efficiency of production.

"Politicians are setting policy in a vacuum," says Harald Hendrikse, auto analyst at Morgan Stanley.

On Wednesday the EU is expected to introduce proposals to promote electric vehicles. The goal is to cut greenhouse gas emissions by 40 per cent by 2030, versus 1990 levels. But at present there are no plans for lifecycle analyses to inform the merits of electric vehicles, nor are they expected soon.

Instead, the industry is being incentivised to introduce electric vehicles, generating a backlash from executives who worry there is not yet adequate knowledge of the implications.

"We are moving from a technology-neutral era into an instruction to go electric," Carlos Tavares, chief executive of French carmaker PSA, said at the Frankfurt Motor Show in September. "So if, in 20 or 30 years, there are health or safety issues, they will be in the hands of governments. If there's any problem, the responsibility is in their hands."

Lifecycle studies show that the idea of "zero emissions" is misleading, at least for now. Too much energy is consumed in the manufacturing process of lithium-ion batteries, and to generate electricity for the batteries to be recharged, for the environmental impact to be nil.

But multiple studies do show that electric vehicles are far greener than comparable combustion engine cars, and the gap is widening every year.

According to the Union of Concerned Scientists, the average electric car in the US already produces less than half the carbon emissions of a conventional car over its lifetime. As more renewable energy from the likes of wind and solar displace coal in the electricity grid, the reductions will become greater.

"They are good today, and they could be even better tomorrow," says UCS researcher Don Anair.

Studies by carmakers support this. A Volkswagen lifecycle report found that its e-Golf hatchback would reduce emissions by 26 per cent, versus a standard Golf, when powered by EU electricity. If it uses renewable energy, it would emit just 9.7 tonnes of carbon over its lifecycle, a reduction of 61 per cent. Daimler found that its Mercedes B-Class electric vehicle, a bigger car, cuts emissions by 24 per cent versus a B-Class petrol-engine car, on EU electricity. With renewable energy it cuts emissions by 64 per cent to a total of 11 tonnes.

Jessika Trancik, a professor of energy studies at MIT, has compiled data on dozens of cars. They show that all electric vehicles produce fewer emissions over the lifecycle than conventional cars of the same weight class, and this holds true even when the electricity grid that powers them is mostly generated by fossil fuels, such as in Poland.

"In a few places with very high reliance on electricity from carbon-intensive sources such as coal, electric vehicles don't provide added benefit over hybrids," she says. "But both hybrids and electric vehicles are better than conventional cars in these emissions-intensive locations."

But, the lack of regulation differentiating between electric vehicles effectively encourages carmakers to sell cars with bigger batteries and longer ranges - features that sound great but are at odds with electric vehicles' green image, given the amount of lithium and cobalt used in the batteries.

Peter Mock, managing director for Europe at the International Council on Clean Transportation, says many electric vehicles produced today feature a range that is too high, and the trend is towards even bigger batteries.

The average electric vehicle sold today offers a range of less than 250km, according to EV Volumes, a data provider. But the Renault-Nissan-Mitsubishi alliance announced plans in September to create 12 electric vehicles with at least 600km of range by 2022.

"For 90 per cent of the vehicles it just doesn't make sense to have such a big battery," Mr Mock says. "Maybe it's useful now in the transition phase . . . But rationally it doesn't make sense. Most of us drive less than 100km a day."

By calling all battery cars "zero emission", Mr Mock says the current regulatory regime is creating a trade-off: it is helping to get EVs on the road, but at the expense of implicitly incentivising a bigger-battery-is-better mentality.

Eventually, he says, regulators will need to treat electric vehicles like refrigerators. "There is a labelling scheme where you look at how much electricity the fridge consumes," he says. "For cars we don't have that, we just look at CO2 emissions."

Politically such a shift would be difficult. In the EU, the regulatory body governing carbon emissions has different priorities to the group overseeing electricity. Any attempt to change which body oversees the car industry is bound to lead to infighting.

Even without a push from regulators, some carmakers are trying to find ways to mitigate emissions across the value-chain and live up to their green image.

Tesla's Gigafactory in Nevada, for instance, plans to rely solely on wind and solar electricity for all manufacturing. Chief executive Elon Musk has said all "supercharger" locations will eventually "disconnect from the electricity grid" and rely on solar, just as customers who charge at home will be able to produce their own electricity from Tesla solar panels. Both measures counter the claim from critics that electric vehicles are actually "coal-powered cars".

The body of BMW's i3 electric car is made from carbon fibre using hydroelectric power in Washington state. It is assembled at a wind-powered plant in Leipzig, where it is fitted with seats made from recycled bottles and coloured by dye from olive leaves. The door panels and dashboard are made from kenaf plants and eucalyptus wood. Even the key is made of castor beans.

According to Trancik Lab, the i3 is the greenest car available by lifecycle emissions. BMW claims the production of the model uses 70 per cent less water and 50 per cent less energy than a conventional BMW. However, the problem for makers of electric vehicles is that their efforts to limit emissions in the supply chain can only go so far. The uncomfortable reality is that battery manufacturing plays a bigger role in lifecycle emissions than anything else the carmaker does.

A decade ago, this was not such a problem. Researchers could assume electric vehicles were small cars such as the Smart Fortwo, which weighs less than a tonne. But Tesla upended these assumptions with the Model S, its roomy saloon which can weigh up to 2,250kg because of a massive battery that powers its impressive range.

Tesla has been credited with accelerating a broader shift into battery-powered cars, but one result of its appeal is that average electric vehicle batteries will double from 20 kilowatt hours today to 40 kWh by 2025, according to UK investment bank Liberum.

These bigger batteries could damage the green credentials of electric vehicles, even if power grids are fuelled by less coal and more renewables, given the poor environmental and ethical standards involved in procuring metals such as cobalt, 60 per cent of which comes from the Democratic Republic of Congo.

Electric vehicle advocates point out that whereas internal combustion engines have had 100 years to be perfected, deeper research into improving the efficiencies of batteries - and reducing the use of commodities such as cobalt - is just getting started.

"Economy and ecology are working hand in hand," says Udo Hartmann, head of environmental protection at Daimler. "We will see a 30 per cent reduction of the CO2 footprint [of batteries by] the beginning of the next decade. And this reduction will continue."

Morgan Stanley even argues that a "cobalt-free battery future" is possible with advances in cathode materials. But for now, in China, the world's biggest car market, "the trend is towards increased cobalt usage per vehicle, as new regulations drive a shift towards higher energy density batteries".

Nico Meilhan, a Paris-based car analyst and energy expert at Frost & Sullivan, says regulators should not encourage this race to sell electric vehicles with bigger batteries. "It's a race, but it's a very stupid race. It's not towards a good solution," he says. "If you switch from oil to cobalt and lithium, you have not addressed any problem, you have just switched your problem."

Instead, he says regulators should take weight into account by taxing heavier vehicles and creating incentives for smaller models in both electric and traditional vehicles.

Mr Meilhan points out that petrol-engine cars weighing just 500kg - such as the French Ligier microcar or some popular "kei cars" in Japan - emit less lifecycle emissions than a mid-sized electric vehicle even when driven in France, where carbon-free nuclear power generates three-quarters of electricity.

"If we really cared about CO2," he adds, "we'd reduce car size and weight."

Copyright The Financial Times Limited 2017