Why businesses must embrace the microcar
It may have taken some time to get motoring, but over the past few years much of the auto industry has publicly embraced the transition to a greener transport system.
Big car makers such as Ford, Nissan and Volkswagen are increasingly stating their backing for an electric car future, while innovative players from high-end electric car maker Tesla to British fuel cell car developer Riversimple are looking to shake up the market.
Sales are reflecting the trend: Figures from trade body the Society for Motor Manufacturers Traders (SMMT) show EV sales reached an average of around 3,100 a month in the first half of 2016 in the U.K., up from 2,400 in the first half of 2015 and just 500 in the first half of 2014.
Recent figures from Nissan revealed its flagship electric Leaf is the third best-selling of any car in Norway, while a recent report from Renew Economy estimated that 3.8 percent of cars in China will be electric in 2020, up from 0.4 percent in 2014.
Meanwhile, cities such as Paris and London are announcing increasingly demanding clean air standards for vehicles as they move to tackle air pollution and congestion. Moreover, there also remains the prospect of radical new ways of using cars, such as the onset of driverless cars potentially leading to shared-ownership models, or Riversimple's business plan to offer its car only via an all-inclusive contract similar to a mobile phone bundle whereby customers would pay a monthly fee to keep the car in their possession but never actually own it.
But one low-carbon automobile solution has struggled to benefit from this green motoring trend. While electric vehicles have begun to appear more frequently on Britain's streets, their tiny cousin, electric microcars, have remained something of a niche market.
While the exact definition of these smaller cars is a little vague — they are typically grouped alongside mopeds through their EU L-category classification — electric "microcars" generally include models such as the Renault Twizy quadricycle and the Aixam.
The cars have compelling environmental credentials, running on a fraction of the energy use of ordinary-size electric cars. At the lightest end of the scale, the Twike — a human power-assisted three-wheeler manufactured in Germany — boasts energy consumption of only 5kWh per 100km, less than 25 percent of the 21 kWh per 100km of the Tesla Model S.
Emissions-wise, there is a clear case for using such vehicles.
"Even if you accept a shift to electric vehicles, which we are quite certain of, incidentally ... it is still the case that large electric vehicles will always use more energy than small electric vehicles," Paul Nieuwenhuis, co-director of the center for automotive industry research at the Cardiff Business School, told auto industry leaders at the annual LowCVP conference last month. "So if you talk in terms of general energy efficiency, there is something to be said for downsizing and weight reduction."
Researchers at Oxford Brookes University comparing the whole life energy of four types of vehicle showed that IEV Postmaster's electric cargo bike uses less than 50 gigajoules over its lifespan, the Twizy just over double that, while a small internal combustion or battery electric vehicle uses closer to 250 gigajoules.
However, the idea of downsizing to smaller, more bike-like cars (or indeed car-like bikes) has struggled to reach the mainstream, at least in the U.K.
"I think in some senses it's a cultural thing," Nieuwenhuis told BusinessGreen. The lack of interest is understandable: adopting such a vehicle requires a significant change in how the car is used, while "microcars" are often priced similarly to a small car, providing little financial incentive.
However, Nieuwenhuis said that there have been several missed opportunities which would have helped make microcars more acceptable, such as the failure to better promote the technology when the congestion charge was first introduced to London.
Whitehall generally has been silent on the topic as well. "Government appears to be largely unaware of this thing, or if they are aware, unsupportive," said Nieuwenhuis in his presentation. There was no support included for L-category EVs in the additional $523 million for EVs announced by the government in December, for example.
On top of limited funding, or perhaps because of it, confusing regulatory regimes relating to parking, driver testing and licencing have further hampered the market. For example, drivers in some cases have to pass a motorcycle test on a two-wheeler before being allowed to drive a four-wheel electric microcar. "Of course, that's a problem because it's a completely different experience," said Nieuwenhuis.
The small number of microcars being sold by mainly specialist manufacturers, meanwhile, means the cost of the vehicles has remained relatively high. Makers of L-category microcars typically subcontract the high capital intensive parts of the car such as the engine and transmission, with the vast majority of engines for all French and Italian quadricycles coming from Italian-based industrial engine maker Lombardini, while nearly all transmissions come from Canada-based CVT.
"By not making engines and transmissions, these companies can operate at lower volumes," said Nieuwenhuis. "Aixam's capacity is around 15,000 a year, which is an annual volume which would just not be viable for a larger car manufacturer, but it becomes viable because they don't make engines and transmissions."
However, the high labour costs of such small operations often takes its toll on the smaller companies that manufacture them.
"It's catch-22," said Ebrahimi. "The small companies make them, they design them, they put their life into it, but they cannot sell them because the price is high, then they go into receivership, they lose their livelihood — many cases are like that."
In response to the challenges faced by the market, the LowCVP and a consortium of British universities recently launched a project to take stock of the potential environmental, economic and societal benefits of L-category vehicles in the U.K.
The conclusion of their assessment, set to be published later this year, was that while there are benefits to the U.K. of developing a market for these vehicles, a number of issues remain where further research, development and demonstration (RD&D) is needed. The project also plans to develop a network which will support funding bids from the likes of Innovate UK and Horizon 2020 for L-category vehicles and attempt to inform future policy debates relating to the nascent market.
Such a push may help the U.K. begin to compete with countries such as Germany, where government-funded initiatives are helping to ensure car makers such as VW, BMW and a range of startups are leading the way in the development of new microcars.
Advocates hope the U.K. could adopt legislation or special incentives to push the uptake of these smaller EVs, as has occurred to some extent in France and Italy — such as removing the requirement for any driving licence.
"In the U.K., we really need some sort of incentive which could be something like zero road tax or you don't need a driving licence or something else like that to attract people," said Nieuwenhuis. "There is really no attraction."
However, even if the U.K. market remains resistant to the appeal of the microcar, the segment could still present opportunities to U.K. manufacturers. Markets such as India and China already experience an expanding small-car culture, providing export opportunities for microvehicle developers.
"We've got an industry here that is particularly good at lightweight engineering for racing cars, high-technology solutions, lightweight materials and that sort of thing," said Nieuwenhuis. "Why are we not making more of this sort of stuff?"
While some may argue that investing in the sector anticipates a market which simply does not exist yet at scale, others predict moves to tackle air pollution and congestion in cities bode well for the future of microcars.
"In the future, it is going to be the standard vehicle that everybody's going to use," Kambiz Ebrahimi of the ULV Research Group at Loughborough University told BusinessGreen.
"The main reason is that in the next 20 or 30 years they are going to pedestrianize the cities, and then it is the only type of vehicle that the people who cannot walk long distances can use inside the city to take them in and out from their home to the city center. We're always going to have problems with traffic — these are not going to be solved, and this is the only solution for that."
Ebrahimi also points out that the move towards self-driving cars could help boost the prospects of small vehicles. "It's much easier first to convert this type of vehicle to autonomous vehicles than a large car, because they are safer, they go at lower speeds, they are simpler vehicles," he said.
While the lack of government incentives mean it remains unlikely that microcars will see much of an uptick in demand over the next few years, rapidly turning tides in the transport sector as well as measures to tackle the environmental problems caused by cars mean smaller cars could yet emerge as a major new market segment. Perhaps small one day will be regarded as beautiful when it comes to green cars.