On March 17th, Paris instituted a very brief ban on vehicles entering the city, based on license plate numbers, in a desperate attempt to limit pollution levels that were heightened by the mild weather.  This was not an isolated incident, as all European cities are facing a rise in traffic congestion and tightening emission mandates

• The European Union has mandated that auto makers must meet a fleet average carbon dioxide emission of 130 g/km by 2015 and of 95 g/km by 2020 (95 percent compliance by 2020 and 100 percent compliance by 2021). 
• Government incentives to lower CO2 emissions have resulted in European consumers preferring to purchase diesel vehicles.  This, in turn, has likely to have resulted in greater pollution from nitrogen oxides (NOx) and particulate matter (PM) now affecting its cities.  
• European cities are also legislated under European Union law regarding levels of harmful pollutants.  Failure to deal with pollutants and meet acceptable levels of air quality will lead to fines imposed on city authorities.  
• As a result, city authorities are using a number of measures to limit pollution, such as increased investment in public transportation.  
• Another measure is to ban the entry of certain polluting vehicles into Low Emission Zones – for example, all vehicles entering the zone in Greater London must meet Euro-4 emission standards.  However, such measures may not be enough.

Also included in the latest update of the Strategy Analytics Hybrid Technologies Legislation/Support database is the recent announcement by London mayor Boris Johnson of the “Ultra-Low Emission Zone” plan – an area in the city center that will ban any vehicle not meeting Euro-6 emission standards for diesel engines, for example, from 2020 onwards.  The plan also includes the control of emissions from construction equipment and new low emission specifications for future buses.

New Taxis for London

Johnson also announced a related “New Taxis for London” plan, which called on new taxi designs that are capable of zero (or low) emissions (although the final requirements have not yet been set).  

• With the measures described above and the Congestion Charge also limiting the entry of private cars into the city center (exempting vehicles emitting less than 75 g/km of CO2 (carbon dioxide)), then it is logical for the mayor to legislate on the 78,000 taxis in use in London.
• Under the new policy, taxi licenses from January 1st, 2018, will only be awarded to vehicles that can comply with the “Ultra-Low Emission Zone.”  
• Five taxi concepts were also announced at the same press conference.  One such concept shown was the Frazer-Nash REE (Range Extended Electric) Metrocab – a typical London black cab with a series hybrid powertrain featuring a 1.0-liter gasoline range extender feeding energy to a lithium-polymer battery pack mounted under the cabin.  It has an 80 km (50 mile) electric-only driving range and a 560 km (347 mile) total driving range.

Despite the intentions of the mayor, Strategy Analytics see a number of challenges facing the new taxi policy.  

• Zero-emission capability will be hampered by the use of large battery packs and range extenders, in order to achieve the driving range for taxi use.  
• The pure electric variant of the current generation Mercedes-Benz Vito van was recently discontinued due to high cost.
• Access to fast-chargers in the center of London are limited to just a few locations that can be regarded as being inappropriate for taxi use, with too few parking spaces.  
• Trials of pure electric cars being used as taxis in China have not been entirely successful, with cold weather lowering driving range and lengthy recharging times losing revenues for cab drivers.  
• The ZAP E380-S was recently given type-approval by the China National Grid Corporation for battery switching – which, given the demise of Better Place, Strategy Analytics has commented to be too costly a solution and a business model lacking in sustainability, in the report, The Electric Vehicle Conundrum: A Tale of Two Markets.  

Gasoline Resurgence – More Electrification

Given the challenges facing the “New Taxis for London” and “Ultra-Low Emission Zone” plans, the resulting drive to combat pollution in European cities may to lead to further changes in government policy.  These policy changes will, in turn, lead to the demand growth of certain automotive electronic systems:

• The next policy trend may lead to consumer incentives towards lower emissions of NOx and PM in new vehicle purchases, not just in CO2, and could lead to the resurgence in European gasoline powertrains.  Downsized, turbocharged gasoline powertrains could see growth when linked-up with cylinder displacement technologies, such as from the Volkswagen Group, giving them the fuel economy edge on a par with diesel.  Current developments in PPCI (Partially Pre-mixed Compression Ignition) and MPCI (Multiple Pre-mixed Compression Ignition) systems may accelerate. These developments are more affordable to consumers in the short-term and are more likely to provide the necessary reduction in NOx and PM pollution than from a few, costly plug-in hybrid taxis.
• Certain European governments could also end tax incentives towards diesel fuel sales and allow its price to rise to a point that consumers will reconsider their choice of powertrain.  
• Requirements for future diesel emissions may also go further, as Euro-6 comes into force this year that aims to lower NOx and PM, especially since Euro-5 did not sufficiently tackle harmful emissions at low loads when compared to earlier emission standards.  Euro-6 sees the growth of diesel emission control systems, such as Selective Catalytic Reduction (SCR).
• Deployment of hybrid powertrains will also increase that will meet future mandates that enhance fuel economy and controls harmful emissions.  Powertrain electrification has to be scalable, so that affordable 48 Volt mild and non-plug-in full hybrids can be used to drive volume deployment and make a meaningful impact on pollution, before a battery technology breakthrough and a usable charging infrastructure are in place in the long-term – Strategy Analytics has written a report, OEM Hybrid and Electric Vehicle Strategies: Emissions Mandates Will Grow Demand that reports on this growing electrification in powertrains.
• Electric car hire schemes will also increase in number and size in an effort to encourage consumer use over privately-owned combustion engine-powered vehicles. London has recently awarded the Bolloré Group the right to run a similar scheme to Autolib, which is already in place in Paris.  Government policies could enhance the desirability of such schemes, such as tax incentives for operators, who would pass on the cost savings to consumers and thus be able to displace more private cars off city streets.
• Recharging infrastructures may receive a boost in investment, since the Euro Zone crisis concerning government debt may recede.  European governments could also consider a new round of scrappage (“cash-for-clunkers”) incentives designed to remove old polluting vehicles from the road and thus increase production of new vehicles with the systems described above.
• City authorities are also looking at ITS (Intelligent Transportation Systems) and, possibly, V2X DSRC (Vehicle-to-X Dedicated Short Range Communication) and ETC (Electronic Toll Collection) systems, in an effort to lower traffic congestion that can cause pollution – Strategy Analytics has also written a report, V2X: A Safety Benefit For Automotive, But How Should It Be Deployed?, that has a forecast showing European deployment of DSRC as early as 2015.