China, Europe drive shift to electric cars as U.S. lags

Sun Jan 15, 2017 9:23am EST
 
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By Laurence Frost

DETROIT (Reuters) - Electric cars will pick up critical momentum in 2017, many in the auto industry believe - just not in North America.

Tighter emissions rules in China and Europe leave global carmakers and some consumers with little choice but to embrace plug-in vehicles, fuelling an investment surge, said industry executives gathered in Detroit this past week for the city's annual auto show.

"Car electrification is an irreversible trend," said Jacques Aschenbroich, chief executive of auto supplier Valeo (VLOF.PA: Quote), which has expanded sales by 50 percent in five years with a focus on electric, hybrid, connected and self-driving cars.

In Europe, green cars benefit increasingly from subsidies, tax breaks and other perks, while combustion engines face mounting penalties including driving and parking restrictions.

China, struggling with catastrophic pollution levels in major cities, is aggressively pushing plug-in vehicles. Its carrot-and-stick approach combines tens of billions in investment and research funding with subsidies, and regulations designed to discourage driving fossil-fueled cars in big cities.

The road ahead for electric vehicles (EVs) in the United States, however, could have more hairpin curves.

Regulators in California and a group of other U.S. states are pushing ahead with state-level rules mandating rising quotas for electric, or "zero emission" vehicles.

But plug-in registrations in the United States fell in 2015, and the market share of electric-only vehicles declined further to 0.37 percent in 2016, as cheap fuel drove demand for gas-guzzling sport utility vehicles and pickup trucks.   Continued...

 
FILE PHOTO --  A 2018 Chevrolet Bolt EV is displayed during  the North American International Auto Show in Detroit, Michigan, U.S., January 9, 2017.  REUTERS/Rebecca Cook/File Photo