Life Cycle Emissions of Combustion Engine Vehicles vs. Electric Vehicles | Episode 38

  December 21, 2021

In 2022, the Fuels Institute will release a report comparing the life cycle carbon emissions of electric, combustion and hybrid vehicles that looks at every stage of a vehicle’s life to help identify opportunities for effective carbon reductions. Listen in as the authors of the report discuss the different sets of assumptions that go into modeling, the hotly debated topics in this space such as exactly when in the EV's lifecycle it becomes less carbon intense than a typical ICE vehicle and the sensitivity factors that affect this time period. It is a fascinating discussion that will leave you eager to read the full report.

Guest:

Aravind Ramakrishnan, Ricardo Strategic Consulting
Ruth Latham, Ricardo Strategic Consulting

Transcript

Speaker 1:  Welcome to Carpool Chats, a podcast brought to you by the Fuels Institute.

John Eichberger: Hey everybody. Welcome back to Carpool Chats. John Eichberger with the Fuels Institute here, and we've got a great program for you today. Earlier in 2021, Fuels Institute commissioned a report to hopefully put to rest this debate, are electric vehicles cleaner than combustion [00:00:30] engine vehicles, and take a look at the lifecycle emissions of both vehicles from the time we start harvesting the resources until we put those cars to bed at the end of the useful life. And so we reached out to our friends over Ricardo Strategic Consulting to do the work for us, they've done some great work for us in the past, and this paper's going to be coming up beginning of 2022. And it's going to be a fantastic piece of work that's going to really help move the debate forward. So today I am thrilled to welcome Ruth Latham and [Aravindh Ramakrishnan 00:00:58] with Ricardo Strategic Consulting. Guys, thank you so [00:01:00] much for joining us today.

Ruth Latham: Thank you, John.

Araven: Thank you, John.

John Eichberger: So when we started this project six, seven months ago, everything seemed to take a lot longer than I wanted to. You guys got your part done really quick, but our peer review process takes forever, which really just throwing it to you, say, "Hey, we really want to understand what's going on. We want to know what has been researched in the past, where the skeletons are, what are the pros, what are the cons of combustion engine liquid fuel vehicles, electric vehicles, and the energy that it powers," and we wanted you to look [00:01:30] at the vehicles and the energy powers that started. So real quick, Ruth, can you give us a quick overview of how you tackled this mammoth project?

Ruth Latham: Lifecycle analysis as a basic science can go as deep as you want it to. It's one of those expanding complexity types of issues. So what we tried to do with this project was to build on work that was done already with Ricardo for the European Commission, as well as literature that's out in the [00:02:00] public domain on others who have looked at life cycle analysis for automotive, looking both at the full vehicle and at individual components to pull that together into a consistent set of assumptions for a model so that we could compare A to B what different factors have on the total lifecycle emissions of a vehicle.

John Eichberger: Now, Aravindh, you guys looked at a lot of research, and clearly [00:02:30] when you take on a project of this size there's so many options to review and you guys, I think you looked at 150 different research projects out there and narrowed it down to the ones much relevant, but there was some consistency in the LCAs that you review. Can you walk us through your high level of review of what you found and the research that's already been done today?

Araven: Yeah. Like Ruth mentioned, there were plenty of research papers on this topic. So one key challenge we faced was defining what needs to be analyzed, setting [00:03:00] our bound conditions right, and once we have that, there are a lot of consistencies between multiple researchers that we found. Overall, the direction of what we find is that BUB's in the long run are less carbon intense than typical IC engine vehicles, but there was a lot of debate on when this parity happens. So we wanted to [00:03:30] look into that further, and that was one of our key research topics. And also there were plenty of debate on the sensitivity factors, what factors affect this parity time period. So we wanted to look into that further as well. And what we found was little consistent with the overall direction of the other projects, [00:04:00] but we were able to put our opinions on what we thought was the right or for what, in our opinion, was the reasonable time when this parity happens.

John Eichberger: So after you guys did a literature review, you came up with a here's where it seems to be harmonizing EVs on average, cleaner than combustion engine vehicles except in certain use case scenarios and then you wanted to validate that. So, Ruth, can you talk a little bit about your choice of modeling [00:04:30] and where you guys went to run the numbers that gave us really the results that I think, we're going to get into in just second, are so relevant to what we're talking about?

Ruth Latham: There are a lot of models available to do lifecycle analysis on vehicles. We decided to use GREET in order to model for the study specifically because many of the analyzes done in the US in particular but globally are using [00:05:00] the GREET platform and it is also available publicly for free, which allows for peer review and replication of our results so that it's very open and clear what our assumptions were and how they translate into the model outputs. It's very easy in lifecycle assessment to hide a lot of assumptions in the model inputs and so we wanted to be [00:05:30] as clear as possible about what we were using for assumptions and to have it be transparent to anyone who read the study.

John Eichberger: And that was critical to us as well, in the Fuels Institute we don't have a stake, we don't have a preferred outcome, we want to make sure that the research that you did for us was objective, was transparent. My colleague, Jeff Hove, talks about the number of black box LCA models that are out there. And the last thing you want to do is try to put forth a paper that's trying to resolve some concerns from different [00:06:00] sides of the equation that is clouded in secrecy. So I really appreciate you guys use the GREET model because it is transparent, it is the Argonne National Laboratory, it is considered in the top of the line out there. But one of the reasons we went into this, Aravindh, I think you can weigh in on this, is this year I've given 55 speeches.

50 of them are electric vehicles. And depending on the audience, I get the questions, well, John, EVs aren't clean, they may have no tailpipe but they come from power and power [00:06:30] can be dirty, or I'll get, well, John, the EVs have this terrible chemistry and batteries, and all of these red herrings thrown in. And that's one of the reason of this paper, is try to settle the score. When you look at the life cycle of an EV versus an internal combustion engine, you mentioned there's a point of parody between them and carbon emissions. Let's just talk about the manufacturer of the vehicles and manufacturer of energy. Where do they stack up? Before we start putting any miles on the vehicle, where do [00:07:00] they stack up compared to one another?

Araven: There is obviously a lot of talk about EVs being perceived different than what they are. One thing that you mentioned I felt interesting was that there is different set of assumptions that goes into modeling EVs, especially when you look at states that are less carbon intense than the ones that are more carbon [00:07:30] in terms of their [inaudible 00:07:32]. We see that is an inherent advantage in running EVs in states that are less carbon intense. And that said, looking at the manufacturing aspects of it, the EVs consist of batteries which are inherently more carbon intense to produce than corresponding IC engine vehicles or the engines and transmissions together. [00:08:00] The difference happens considering the overall lifetime green house emissions. When you look at the overall lifetime greenhouse emissions, the EVs, we believe, is less carbon intense than IC engine vehicles, but if you look at just the manufacturing aspects of it, EVs are more carbon intense. So it is really important to put these things into perspective, look at this from a holistic perspective than just the manufacturing [00:08:30] aspects.

John Eichberger: And I think that the study points out there are points in the manufacturing process, maybe there's opportunities to reduce the carbon intensity of the production of the electric vehicle and bring a little more parity, because right now I think it's two to one, two and a half to one, in terms of carbon intense before they start running down the line down the road, but the problem comes into when you start putting energy into them and quite quickly the petroleum based fuel for the combustion engine starts to narrow [00:09:00] that gap and the EVs over a period of miles gets to catch up and they actually balance out and become a little greener in terms of carbon emissions profile, except in certain sectors where you may have a high carbon intense grid.

And I think that was an important finding, Ruth, because I think we've run into this problem where a lot of leaders think there's a solution to reducing carbon transportation, to electrify everything, electrify everything everywhere. But right now we look at the grid composition [00:09:30] in the United States, there are certain markets where it does not make sense to electrify if you have a high efficiency internal combustion engine. Can you talk a little bit more about that from the paper's perspective?

Ruth Latham: Yeah, I think the electrify everything everywhere has an underlying assumption of clean power everywhere. That just isn't the case right now. And so that assumption makes sense, yes, if everything is solar and wind and we're not [00:10:00] using coal fire to charge our vehicles, but I think that it's important to consider what that mix is and how that mix changes going forward because it's quite critical to the lifecycle emission of the vehicle. On the battery production side as well, where the power is coming from, where those batteries are being made globally is important on the carbon life cycle or the carbon footprint that that battery has as part of its production. [00:10:30] So I think that there are activities that are ongoing right now to improve the efficiency, to improve the location of battery production to reduce the carbon footprint. But as the supply chain sits right now, it's not the best solution in every place, and other changes need to happen before it is.

John Eichberger: And I think that's the beauty, the way you guys did this paper is you took each section in the supply chain from harvesting [00:11:00] the materials to assembling the vehicle, to running the vehicle, to retiring the vehicle and you broke it down to it's component parts. So now we can look at things like the supply chain efficiencies for battery production. Can we improve that and reduce the carbon intensity there to make the EV cleaner coming off the line? At the same time we look at these summary, it was about, I think, I calculated the difference in carbon emissions over 200,000 mile life, it's about 40% fewer tons of carbon for the EV versus the IC vehicle. But you also model, [00:11:30] Aravindh, you modeled hybrid electric vehicles, and the delta between the battle to become hybrid was only about 19% or less, I believe, which leads me to think that, you know what, if we can improve the carbon intensity of the fuel going into a hybrid vehicle, we can narrow that gap tremendously and accelerate our path of decarbonization. Am I reading that correctly?

Araven: Yeah. The way we see it is that the hybrid vehicle, we see it as a bridging [00:12:00] technology until the technology for BB's fully matures and getting the fuel carbon emissions optimized for hybrid electric vehicles is definitely a solution that we see.

John Eichberger: For the people back home, what they did is they analyzed the LCA through the GREET model and then they took a whole bunch of sensitivity assessments [00:12:30] and they ran the model based upon different grid intensities for the electricity, different fuel formulations, different driving behaviors, different temperature sensitivities. Ruth, when you look at those sensitivities, were there any of those alternative models you guys ran that really struck you as I didn't expect that to be the result or that really we need to pay more attention to because it has a much greater impact on our overall approach to decarbonization?

Ruth Latham: I think the importance in [00:13:00] vehicle lifetime, how repairable is your vehicle, how long will your vehicle survive, how recyclable are the components of your vehicle. These are important elements. We have a pretty established supply chain for the recycling of traditional internal combustion engine vehicles. There is the ability in most hybrid vehicles, the battery chemistry they use can also be recycled, but we're still working to understand how best to recycle [00:13:30] the lithium ion batteries that are used in electric vehicles. And so the further we go in our ability to both make the batteries have a longer lifecycle and reduce the impact of recycling the batteries or the impact of the inability to recycle the batteries, these elements have a large impact on whether or not a hybrid vehicle or a electric vehicle at the end of its life [00:14:00] has a larger carbon impact. And so I think that's one of the reasons that you see hybrids as a transition into electrification on a mass scale.

John Eichberger: One of the things that struck me when I read it, and I've read it four or five times now, given a few presentations on it already, was the impact on battery life. And so in the paper you guys quote the most OEMs, the vehicle manufacturers, say that once a battery gets to 70% of its original capacity, it's [00:14:30] expired, the warranty's out, it needs to be replaced. And that can happen at stages of ownership, depending on how you drive. If you're a more aggressive driver, then you're going to wear that battery out faster. If you're a more timid driver, then you're going to extend that battery out. But I think you guys came out and said, "Over a 200,000 mile lifetime, depending on driving behavior, the EV owner may have to replace that battery from 1.2 to two and a half times."

Now, when I think about that from a carbon intensity perspective, okay, that [00:15:00] changes some things when you factored that in. For me, it's more of an impact on the total cost of ownership, another component of the study. And Aravindh, you guys found that the EV over a 10 year lifecycle is a lower cost to own, even with some battery replacement. But my question now comes more into some of the literature review where you looked at cost of first owners, cost of second owners, how impactful is that battery durability [00:15:30] on total cost of ownership when we look at it as a whole? Is it something that we need to be really concerned about and is there a way we can address it in a way that makes a lot of sense for the consumer?

Araven: Yeah. Looking at it, we don't really see the driving factor to have an immediate impact on the total cost of ownership. But if you look at it from a very logical perspective, yeah, it does. And more so for the second owner than the first owner, because the first owner [00:16:00] typically has batteries that are covered by warranties. And also, the first owner tends to take up a lot of the vehicle depreciation cost than the actual battery replacement cost. But for the second owner, it's the vehicle component replacements that includes batteries that play a major role.

Battery replacements are quite expensive, and that's where we look at a portion of battery replacements done using refurbished batteries [00:16:30] as well. And battery replacements could anywhere run from a few thousand dollars to even 16 to $20,000 depending on type of the vehicle. And at that point, it becomes important to look into the vehicle residual value, comparing that against the actual cost of the service and making addition at that point. So it becomes really interesting for the second and subsequent owners, [00:17:00] things really not so apparent as the driving style becomes a big factor at that point.

John Eichberger: I think that's [crosstalk 00:17:11]. Go ahead.

Ruth Latham: So the other factor for me that's interesting there is that the way a traditional ICE vehicle fails is not that the distance you can drive in it gets shorter, usually it's either an abrupt failure or your fuel economy gets worse over time, those are [00:17:30] the two. And you notice the abrupt failure but you don't necessarily notice your fuel economy unless you're a real geek who's tracking that constantly. I think the way an electric vehicle fails is that you can go less far with it over time and your range continues to shrink, and becoming accustomed to that and thinking about how much range you really need in a vehicle when you're buying an electric vehicle on secondary market is going [00:18:00] to have to be a change in consumer perception to avoid buying new batteries or buying replacement batteries.

I think the other piece of that is that you expect a major repair on your vehicle to be in the 1800 to $3,000 range if you needed a new engine. For most vehicles, that's about where it would be. A battery replacement, even though it's going to be more rare than an engine replacement, is usually more costly than that. So [00:18:30] there's this profile where a relatively few people will have a nasty surprise in the secondary market looking for a replacement battery.

John Eichberger: And I think that's not the point of this study, it wasn't the driving, but it's something that struck me and it lines up with some of the stuff we've been doing with some government agencies looking at equity, transportation, equity, access to affordable, reliable transportation. And I think in our push to decarbonize, we're focused on first [00:19:00] generation vehicles, first owner, get the new vehicles out there, but we sell about 40 to 45 million used vehicles every year in the United States and if you're in a lower income market then you are gravitating towards the used car market. You can't afford a new car if you're in a lower income bracket. And if we're going to be bringing the electric vehicles to the used car market and there's this potential compromised durability, compromised range, we need to figure out a way to quantify that, qualify [00:19:30] that and protect the consumers and help them get into the market. I like your point that it's not that the vehicle won't run, it's just that your range is compromised.

That changes my perspective a lot, because I was getting really concerned saying, "We're going to be dumping these EVs on the market and saddling these lower income consumers with a $10,000 battery replacement," but they don't have to do that. They just don't get to drive as far, which is a unique perspective that I hadn't thought about. So I really appreciate you bringing that up because I was seriously thinking we're running into a train wreck here and we can compromise [00:20:00] on the, range and we get the 70, 60% battery capacity. So that helps. The other thing that I want to just bring up before we close here is that the other argument I get about EVs are not good, John, terrible for the environment is what are we going to do with all those batteries when they're no longer useful in a car? And I think you guys showed the studies about battery redeployment and reuse. Aravindh, can you talk a little bit about what you guys found? What the potential is to repurpose batteries after their useful life and transportation [00:20:30] has expired?

Araven:  Yeah, batteries when they reach their capacity limits to about 70%, that is usually defined by the auto makers, there are a few typical pathways that one can follow. Refurbishing a battery for putting it back in use for vehicles, that's a valid option, and that is applicable to certain state of health of batteries. For example, if the battery has [00:21:00] a certain state of health from 70% to 50%, it is a viable option to follow. If the battery falls out of this range, certainly there are other potential uses. One such use is putting it to use in energy storage applications, stationary and energy storage applications, and that is being looked at by many auto OEMs. And one interesting thing is there's another third potential [00:21:30] pathway here, recycling the batteries at that point and using the material recovered from those to substitute the [inaudible 00:21:37] material used in battery production.

That's also a valid pathway. Now it becomes all interesting because the recycling technology is not fully evolved at this point and the refurbishment technology is viable and it is a really interesting point to look at the future, as the recycling costs go down [00:22:00] and the refurbishment costs stay at the current point, how will this industry evolve? That's a very interesting perspective to take, looks like many automotive manufacturers use the refurbishment pathway as something to hold onto the batteries for longer, put the batteries to use for longer until the recycling technology matures. So that to me is quite interesting.

John Eichberger: [00:22:30] As always, whenever we work with Ricardo Consulting, I learn things I didn't expect to learn through the project. We always go to you with the RFB, here's the questions we want to answer and then we meet once a week and every week I'm going, "Hey, I didn't know that." And it takes me down squirrels. I've commissioned three other white papers based upon this research project, my colleagues are going, "John, we don't have the capacity to do all these work," but it is a great paper.

And I think I'm hopeful that the powers that be that are developing our policies and our strategies [00:23:00] to decarbonize take a look at this very closely because there's so many factors and so many elements that are covered in the paper that can help us accelerate decarbonization, whether it be improving efficiency of combustion engines and lowering the carbon intensity liquid fuels, hybridizing vehicles, deploying EVs in the right markets to capitalize on the greener grid. There's just so many things we can do, consumer education, economic analyzes, to make sure that we are protecting the access to affordable allowable transportation. All [00:23:30] these elements are factored into this paper and I'm really excited to get it out to the public. So guys, thank you so much. If people want to learn more about the work that Ricardo Consulting is doing, where can they look, ruth?

Ruth Latham: So they can go to our website, which is www.ricardo, R-I-C-A-R-D-O, .com. We also are on LinkedIn and Twitter.

John Eichberger: So thank you guys. Ruth, Aravindh, thank you very much for joining us today. I can't wait to get the paper out there. [00:24:00] Once it's out, I'm going to have you back to talk about the reaction you get from the paper. I thank you very much for all the work you guys have done for us. And for you guys back home, thank you for tuning into Carpool Chats, and we'll see you next time. See you.