A variety of technologies for reducing new passenger car type-approval CO2 emission levels are available, including eﬃciency improvements of combustion engine vehicles and transitioning to electric vehicles. Three scenarios were modelled in order to assess the required investment cost per vehicle as well as associated savings from a consumer and society perspective for different type-approval CO2 reduction targets:
Manufacturers comply with the currently established reduction targets of 15% by 2025 and 37.5% by 2030 but make no eﬀorts to go beyond the necessary levels of CO2 reduction. The remaining potential of internal combustion engine (ICE) vehicles is untouched and electric vehicle market shares stagnate from 2030 onwards.
Current reduction targets are strengthened to 20% by 2025 and 50% by 2030. In addition, a 70% target for 2035 is introduced. Manufacturers tap some of the remaining ICE potential (reducing CO2 by about 1% annually) and further increase the market share of electric vehicles, so that battery electric vehicles (BEVs) account for about half of new car sales by 2035.
New car CO2 reduction targets are strengthened to 30% by2025,70% by 2030, and 100% by 2035. To comply, vehicle manufacturers have to greatly exploit the remaining potential of ICEs (at a rate of about 4% type-approval CO2 reduction annually between 2021 and 2025, including a reduction in vehicle mass and transitioning to mild hybrid vehicles).Plug-in hybrid electric vehicles (PHEVs) are phased out quicker than in the Lower Ambition scenario.
BEVs reach a market penetration of about 50% by 2030 and 100% by 2035.
All new cars achieve zero tailpipe CO2 emissions by 2030. This means a rapid transition towards BEVs with the remaining ICE potential being fully exploited in the transition years.For all scenarios, direct manufacturing costs increase compared to 2021, between about €400 in the adopted policies scenario in 2025 to about €1,700 in the higher ambition scenario in 2030 (Table 1). For 2035, incremental manufacturing costs decline compared to 2030, mainly due to improved learning for electric vehicle technologies.
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