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Despite EVs, the ICE Age will last longer than expected

Transition to electric transport will be slow and evolutionary

Visitors at the New York International Auto Show look at a Polestar 4 electric SUV. But will it survive the ICE age? Michael Nigro/Pacific Press/alamy via Reuters
Visitors at the New York International Auto Show look at a Polestar 4 electric SUV. But will it survive the ICE age?

A London pal of mine has just taken possession of a Polestar 2 electric vehicle, and he is loving it.

A quick spin round town last weekend showed off all the virtues of the car, a collaboration between Volvo of Sweden and Geely of China: a silent, gliding ride, plenty of power when needed, and all the hi-tech gadgetry you could want – as well as some you don’t, maybe.

One eye opener was the fact that the car does not have a key. It reads your proximity to the vehicle from your mobile phone, opens the doors and turns on the engine and AC (if needed in a London summer). Ingenious.



The long-running drawback with EVs has been range and accessibility of charging stations, but the Polestar has thought of all that. The dashboard display tells you exactly how many kilometres there are left in the battery, when you need to stop for a recharge, and where to find a fast charger.

It’s a beautiful vehicle and I wish him all the best with it, but cannot help but think the headfirst dive into 100 percent EV is a little foolhardy. There is plenty of evidence out there that the future is not full-blown EV, but some kind of mix of electric and internal combustion engine (ICE).

In this context, Saudi Aramco’s recent decision to buy 10 percent of Horse Powertrain, a joint venture by Geely and Renault of France, for €740m ($7.9 billion) is an intriguing development.

Aramco is betting that there will be a market for ICE-driven transport for many years to come, and is putting its money into a project that will design and build a new generation of highly efficient engines that are as environmentally friendly as anything that uses hydrocarbons as its basic fuel can be.

Although the investment is new the concept is a familiar one for Aramco, which has for years been investing in R&D in advanced engine technology to produce cleaner and more efficient petrol-fuelled technology.

EVs have become a geopolitical football in the fractured state of global trade relations

This is energy transition in practice, a million miles away from the “just stop oil” simplicities of the eco-warriors.

Aramco thinks that even beyond 2040 ICE engines will still comprise more than half of the transport market in some form of pure ICE, hybrid or plug-in hybrid. Who would bet against the energy experts at the Saudi oil giant?

Certainly the signs are that pure EV sales are slowing almost everywhere in the world.

A recent paper from Goldman Sachs researcher Kota Yuzawa said that the “bear case” for EV sales – involving a decline in the current year and a slower trajectory for the rest of this decade – is becoming more likely with each quarter, for three main reasons.

First, they are expensive, both to manufacture and to buy. Capital costs in EVs are far higher than in traditional ICE vehicles, and this cost is passed on to the consumer.

My friend’s car is being purchased on a long leasing deal but will end up costing him something north of £50,000 after a few years, much more than a comparable ICE vehicle.

Even with the subsidies that some eco-friendly governments hand out to EV buyers, the cost of buying one is daunting.

Second, EVs have become a geopolitical football in the fractured state of global trade relations. China – by far the biggest and most efficient producer of EVs including the market leader BYD – is facing tariffs in Europe and the USA over alleged unfair subsidies.

It is not inconceivable that my friend may have problems sourcing replacement parts for his Polestar if the UK government was to follow the EU’s example of slapping high tariffs on the vehicles and a tit-for-tat trade war breaks out.

Third, it is back to the vexed question of range and charging infrastructure. Goldman Sachs found that concerns among automakers and consumers about these issues are increasing and deterring new purchases of EVs.

Increasingly, the back-up of an ICE-based hybrid is seen as the comfortable alternative.

EVs – once some of these fundamental problems are ironed out – are undoubtedly the wave of the future. But energy transition must be viewed as exactly that – transitionary and evolutionary.

ICE transport is an essential part of that evolution.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He acts as a consultant to the Ministry of Energy of Saudi Arabia and is a media adviser to First Abu Dhabi Bank of the UAE

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