Executive summary and methodology

1. ZEC “zero emission city”
A new system of public and private electric mobility
Preliminary guidelines
Carlo Iacovini and Alessandro Marchetti Tricamo
Rome, July 2010
1- INTRODUCTION
This document presents preliminary research undertaken to describe the characteristics of a
mobility service system whose aim is that of facilitating a transition towards massive use of
electric vehicles. By analysing the urban and market, our brief has been that of working out a
proposition for helping authorities and companies to use electric vehicles in a context that is as
close as possible to the scenarios predicted by the most authoritative market estimates. At a later
date, this study will need to be adapted to the different contexts of experimentation, identifying
figures, costs, quantities and benefits relative to the environment of application. The proposed
model marks out a path, a guide to starting off in a concrete way the implementation of electric
mobility.
2- ELECTRIC MOBILITY: A CONTROVERSIAL HISTORY
This is a revolution that has to answer to its past. The dream of the electric motor has
accompanied the car from its birth, but as early as the end of the nineteenth century its limits
were quite obvious: the ability to accumulate energy with batteries. Performance was never a
problem: in 1899 an electric vehicle broke the barrier of 100 km/h, reaching 105.88 km/h. From
1920, however, with the development of combustion engines, it was clear: the structural
simplicity of an electric car and its ease of driving could not compete with the three-figure
autonomy of the combustion engine. Lead batteries, the only ones at the time that could
guarantee a car’s necessary reliability, could accumulate (at the peak of their development) about
40 watt-hours per kilogram: in practice, one needed 25 kg of batteries to obtain the same energy
content given by 2 glasses of petrol. Periodically, most often under pressure from petrol crises, the
car industry has tried to get the electric project going, but always without success. BMW tried in
1992 with the E1, perhaps the one closest to today’s concept and to the coming mass-produced
electric cars: the E1 was built completely in aluminium, with panels in aluminium and plastic, to
reduce the weight as much as possible and thus increase the autonomy of the batteries. BMW
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2. decided to equip the E1 with what were considered innovative batteries, sodium-sulfur ones,
which had a specific energy 4 times higher than lead ones but had the drawback of working at
temperatures around 300°. This is the reason why the only two E1 prototypes were destroyed by a
fire at night in a BMW factory. Another example of the many “flops” was the GM EV1 (1996):
captivating lines fit for a car museum, 2 seats, first lead batteries and then nickel-metal hydride
ones (like those in hybrid cars), front electric motor, it was born to meet the demands of the
Californian administration and 1,117 models were produced. The EV1 was sold with a lease
formula (as with tomorrow’s electric cars), at a monthly rate starting from $300. The story of the
EV1 ended in 2003: the first lead batteries did not ensure the declared 90 km autonomy; the nickel
ones were still at the first stages of development, had a tendency to overheat and did not last
longer than a year. It was also a question of price: American newspapers at the time related
production costs of $80,000 per car. Too high. Fiat also did its electric duty: among its prototypes
were the X1/23, designed in 1972 by Dante Giacosa, and the little-known Downtown, a prototype
presented, in a familiar pattern, at the Geneva Salon in 1993, with 3 seats and the innovative
solution of electric motors (9.5cv) with the drivetrain in the back tyres. It used a sodium-sulfur
battery (like the E1) and, according to what was claimed at the time, could guarantee an
autonomy of over 190 km. It was a classic case of Auto Salon optimism and the Downtown never
entered production. On the other hand, the Panda Elettra did, in 1990: 2 seats, lead batteries,
maximum speed of 70 km/h, 65-km autonomy (in theory, because in city driving they did not go
over 50) and a listed price of 25,600,000 liras. In 1998 it was followed by the 600 Elettra: lead
batteries weighing 400 kg, autonomy of just 90 km (in the homologation cycle), official useful life
of 600 recharge cycles (about 50,000 km, without taking into consideration the lazy-battery
effect). What happened to them? They disappeared. Or rather, they lie unused in some town hall
parking lot, since only public administrations bought them (in Palermo, Turin, Brescia, etc). An
electric bubble, destined once again to burst because of the same problem: reduced autonomy of
electric vehicles.
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3. 3- MARKET ESTIMATES AND OBJECTIVES
Nowadays, however, the electric car is making a comeback as the protagonist of the zero emission
dream (at least with the exhaust). What has rekindled enthusiasm for electric traction are the new
lithium batteries, using the same technology as those used in cell phones or portable computers.
Today a lithium battery has an energy content of about 140 watt-hours per kg, nothing in
comparison to the 13,000 watt-hours per kg that petrol delivers, but enough to give an autonomy,
at least in theory, of more than 100 km: a sufficient distance, according to research, to cover the
average daily needs of the European driver, which in 80% of cases is less than 50 km. The motor
industry is beginning to believe in the electric solution in compact form, pushed first of all by the
great research incentives in the United States and China (with Europe slightly behind). Also, the
different projection estimates about the electric market seem to confirm this belief:
• IHS - Global Insight: a market share of 1-2% in 2020, which could go up to 11-30%
in 2030. As far as plug-in hybrids are concerned, they foresee a market share of 2%
in 2020 and of 5-20% by 2030.
• Deloitte: by 2020 electric and hybrid cars will represent up to a third of total sales
in developed markets and up to 20% in urban areas of emerging markets.
• ACEA (European Automobile Manufacturers’ Association): by 2020 electric cars will
account for between 3% and 10% of the market.
• Roland Berger: 3 million electric and plug-in hybrids in 2020, the equivalent of 20%
of the total market.
• Istituto Swg. over 70% of Italian drivers would be ready to buy an electric car. One
out of 10 would be sure to buy it, if it was available for sale. 54% ask for good
autonomy and more recharge stations, 45% would like government incentives and
40% would like electric cars to cost the same as cars that are available today.
• Accenture: survey of over 1,800 consumers in Italy, Germany, France, United States
and Canada. 60% of interviewees would choose a hybrid or electric car, over a
petrol-fuelled one, as long as the new vehicle could compare or even be superior in
terms of driving comfort, performance, style and maintenance. It also emerges that
43% of the interviewees – but in our country this percentage jumps to 62% -
intends to buy a hybrid or electric car in the next two years.
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4. 4- CHARACTERISTICS OF THE PROJECT
All the different options above have in common medium/long-term objectives and estimates that
predict a considerable share of both the private and public market. A market share that, at least in
the short term, considering the increased but still limited autonomy of the vehicles, will involve
essentially a city use: the electric car is a car destined to substitute the city car or the second
family car used in the city. This is the starting point for the input that launches the ZEC project.
How can we reach the – at times optimistic – figures indicated by the above estimates? Which
strategies are needed to turn into a reality the policies and actions to be undertaken? It must be
kept in mind that it is not enough to have available a choice of vehicles without integrating them
into present and future mobility systems (PUT – Urban Traffic Plan - and PUM –Urban Mobility
Plan) and without adopting an appropriate plan of recharging infrastructure. We also need to
build a culture that can bring us within reasonable times to virtuous behaviours and at the same
time work as a system, that is, involve all public and private potential users of electric mobility,
and stimulate them with a fiscal and economic incentivisation system. The challenge is far from
simple, all the more so as often we concentrate on defining the final objectives, losing sight of the
road for reaching them.
The ZEC project provides a method for implementing an electric mobility system, with the
possibility of experimenting, in a short-time first phase, all the factors that will characterise the
future. It is a question of recreating on a minor scale the global scenario of electric mobility:
matching the different vehicle uses (private citizens, companies, public fleets, car sharing, business
services) with cars (already listed o to be listed in the future) possessing characteristics compatible
with the different needs. Following the fundamental rule of the free market, we must bring
together supply and demand. We need, for example, someone charged with coordinating the
preliminary phase of the new mobility, who will incentivise the demand for electric vehicles, help
the spread of recharging infrastructure, facilitate the mobility of electric vehicles in urban areas,
supply (public and private) companies in the area with vehicles and communicate with the auto
industry, at the same time promoting innovative and virtuous lifestyles.
The ZEC project envisages the Town Hall as the authority charged with building up an electric
business model that will provide answers to such objectives. Through mobility agencies, or other
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5. organizations they participate in, and a partnership with local multi-utility companies, the Local
Authority can:
• plan and build the recharging network, privileging electric energy from renewable sources,
so as to build a real zero-emissions closed cycle;
• involve mobility operators and traffic generating centres in order in identifying the private
and public market demand for electric vehicles (through the network of mobility managers,
public transport users and citizen services);
• incentivise the private use of electric vehicles (both at the purchasing and leasing level);
• purchase (or rent) a fleet of electric vehicles from different producers in order to then
lease them (or offer them for purchase or hire purchase) to the first users (representing
different target users). All this should take place though a local fleet manager;
• facilitate mobility for electric vehicles (for examples, with free parking and free access to
limited traffic zones);
• promote social awareness and stimulate new individual behaviours.
On the basis of these considerations, made operative by the ZEC project, the study that has been
undertaken considers a medium-sized Italian town (200 thousand inhabitants) which, according to
the average parameters of market potentialities, in the next 5 years could come to have 1,250
electric vehicles in circulation. In order to reach this objective, a service is to be activated for the
lease/hire-purchase use of a fleet of vehicles (with two and four wheels) taken from those
available on the market even in small quantities (starting from the end of 2010 every automobile
company will launch its own electric vehicle, Citroen C-Zero, Peugeot iOn, Mitsubishi iMiEV,
Renault Fluence, Kangoo, Zoe e Twizzy, Smart Ed, Nissan Leaf, etc. ). The manager, through a
framework agreement with the vehicle producers, will centralize management and build a product
line to offer to different urban users (private users, citizens, public companies, public service). The
Local Authority, through appropriate regulations, will supply the necessary facilities and
incentives.
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6. OPERATING DIAGRAM OF THE ZERO EMISSION CITY SERVICE
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7. 5- INVESTMENTS AND MANAGEMENT COSTS
The objective of over one thousand electric vehicles is commensurate with the average market
forecasts but it is interesting to look at the economic dynamics regarding the necessary
investments. Since it is an experimental application, the economic analysis must concentrate on
both the costs/benefits relationship and the sustainability of the service once in place. Also, it
must be stressed that the Zec model is a service that will evolve and finally concentrate on the
public mobility component, and that the mobility private sector will take over in numerical and
market terms.
The total investment envisaged in the space of 6 years is a little over 14 million euros. In the first
start-up phase (lasting 24 months) an investment of 3,296,000 euros is estimated. In the second-
phase (up to completion), the investment will be a little over 11 million euros. It is important to
see these figures as a whole, but the different cost items need to be evaluated.
Firstly the budget foresees, on the basis of European experiences, forms of incentivisation for the
purchase or lease of vehicles for a total of 7.5 million euros. This sum will be distributed between
the main operators in the sector who will be the first to have vehicles ready and marketable. This
item is an obvious industrial “support” aiming, as in different European experiences, to support
the transformation of the automotive sector. This form of incentivisation is optional. It can be
granted at a local level, but much more rationally it will exist only if financed at the central
government level (or at most the regional one), since it is a question of industrial financing. It is
not to be excluded that even single car producers will be interested in promoting further forms of
incentivisation for the spread of their product. It is to be assumed that especially in the first phase
there will be an attempt to supply products at very reasonable prices, bearing in mind that, as in
some experiments already underway, single customers will need to underwrite the contract and
incur costs in the purchase or use of the vehicles. These costs are not calculated here because they
concern directly the private market sphere of the automotive sector and cannot therefore be
attributed to an experimental model of electric mobility services. The second investment item is
linked to the recharging infrastructure (4 million euros). This figure, however, cannot be attributed
exclusively to the project. First of all, the costs of the infrastructure will be absorbed over several
years and, secondly, it will serve not only the vehicles linked to the experiment but more and more
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8. the vehicles and motorcycles that will grow spontaneously from the private market of the electric
sector. As it is principally a public work project, in the total numbers is it right to record it as
equivalent to the amortization amounts in the relevant periods.
Once the project has taken off, the running service will have moderate costs of between 500/700
thousand euros for annual management, including maintenance and promotion activities.
6- EXTERNAL EFFECTS OF THE PROJECT
The mobility sector, just like industrial production, produces external effects, that is, collateral and
not deliberate effects linked to activities that have a negative effect on third parties, usually the
environment and people. According to data in our possession, in Italy cars contribute to over 60%
of the creation of external effects; commercial vehicles (light and heavy ones) to about 20%; public
transport on rubber tyres to about 12%, motorcycles to about 5%. The identification and
assessment of the external effects of pollution is often a very difficult task: for example, there are
many estimates of the total net economic costs of damage produced by climate changes all over
the world (for example, the social cost of carbon (SCC, expressed in terms of net future benefits
and costs that are currently discounted). The SCC estimates for 2005, which have been subjected
to peer review, have an average value of 43 USD per ton of carbon (tC), that is, 12 USD per ton of
carbon dioxide (CO2), but the interval around the average is great. For example, on a study based
on 100 estimates, the values range from 10 USD per ton of carbon (3 USD per ton of CO2) up to
350 UD/tC (95 USD per ton of carbon dioxide). The great discrepancies in SCC estimates are due in
great part to the differences in assumptions regarding climate sensitivity, to delayed answers, to
the treatment of risk and equity, to economic and non-economic impacts, to the inclusion of
potential catastrophic losses and to discount rates. It is very likely that globally the figures
underestimate the damage costs, because they cannot include many non-quantifiable impacts. As
a whole, the publications indicate that the net costs due to climate change damage are probably
significant and will increase with time. In our research we have decided to assume as the SCC
index the value estimated in the Stern Report (Stern Review, 2006) of 75 euros per ton.
As for air pollutants, we took into consideration sulphur dioxide (SO2), nitric oxides (NOX),
particulate matter (PM2.5 and PM10 particles with a diameter smaller than 2.5 or 10 microns),
carbon monoxide (CO) and volatile organic compounds (VOCs). For the monetary costs associated
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9. with air pollution (particulate matter, nitric oxides, carbon monoxide, etc.) we have adopted those
of the INFRAS – IWW study, Externals costs of transport (2004), a source accredited by the
European Community.
In summary, the average cost values we have used for the estimate are:
- pollutants: 1.27 cents of euro/passenger per km;
- climate-altering emissions (CO2): 0.94 cents of euro/passenger per km,
- noise: 0.52 cents of euro/passenger per km.
Considering the following hypotheses of calculation:
1) 1,250 electric vehicles substituting as many internal combustion vehicles;
2) the energy used to recharge batteries from a renewable source;
3) an average vehicle occupation of 1 passenger;
4) average travelling distance of 12,500 kilometres/year,
one gets, once the system is in place, a value of 426,563 euros a year saved with the adoption of a
fleet of 1,250 electric vehicles recharged with energy from renewable sources. An amount that is
equal to the annual management costs estimated by the plan.
In particular, attention must be given to the environmental aspect that, once the system is in
place, every year will cause the reduction of CO2 emissions from car traffic by 2,344 tons, as well as
the emissions of the other pollutants and those, harder to quantify, of particulate matter, nitric
oxides, carbon monoxides and volatile organic compounds.
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10. ABOUT THE AUTHORS
Carlo Iacovini was the founder and President of the Euromobility Association, and he has
collaborated with several Local Authorities in introducing new mobility policies and services. He
has undertaken international research for European projects, for the Australian government and
he has coordinated the international forum Move, promoted among others by the Fia Foundation.
As Director of Infomobility S.p.A (joint stock company), a mobility agency for the Municipality of
Parma, he has collaborated in the construction of the “Parma model”, an example of good
practices in the sector. After heading the mayor’s staff, he now has the role of Director of the
Attractiveness and Marketing sector of the Municipality of Parma. Since 2009 he has been
founding partner and president of the group Green Value.
Alessandro Marchetti Tricamo, transport engineer, participated in the first international
conference of young researchers on hydrogen with the project paper “The use of hydrogen for city
services by a fleet of vehicles” published by the Begell House Inc magazine of New York. He has
worked for ATAC S.p.A. (joint stock company), where he collaborated in the development of Rome
Car Sharing, the planning of a recharging stations network for electric vehicles, and satellite
monitoring activities of Roman public transport. He is the head of E-Mobility, which provides
active consultancy services in mobility management and evaluation of environmental impact. He
works as a journalist for the Corriere della Sera.
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