France to Ban Gasoline- and Diesel-Vehicle Sales

With more countries planning a shift to EVs, could the United States follow?

PARIS -- France plans to ban the sale of gasoline- and diesel-powered vehicles.

Ecology Minister Nicolas Hulot announced the goal to end sales of these vehicles by 2040, as one of many efforts aimed at helping France meet its commitments to battling climate change, Reuters reported. The announcement happened the same week that Volvo became the first automaker to vow a complete shift from internal-combustion engines to electric motors, and that Tesla began factory production of its mass-market Model 3 electric vehicle (EV).

Hulot noted that France was stepping up its commitment after President Trump announced the United States was withdrawing from the Paris climate agreement.

"One of the symbolic acts of the plan is that France, which previously had made the promise to divide its greenhouse-gas emissions by four by 2050, has decided to become carbon-neutral by 2050 following the U.S. decision," Hulot said. "The carbon-neutral objective will force us to make the necessary investments."

A wholesale ban on gasoline- and diesel-powered vehicles by 2040 would be a heavy lift for France. They represented more than 95% of France’s new-car fleet in the first half of 2017, while hybrids had 3.5% share and EVs had 1.2% share, according to Reuters. The French government has not yet announced how it plans to support the shift in vehicle technology, whether it be financial incentives, regulations or a combination of the two.

France joins other countries making aggressive plans to ban fossil-fuel-powered vehicles. Norway has set a goal to sell only EVs by 2025, and India plans to transition to an all-EV fleet by 2030. 

Could the United States make a similar commitment? Several experts told Fortune the potential was limited. For one, they pointed to President Trump’s skeptical stance toward climate change, and a lack of broad public support. 

“When I was serving on a committee studying the obstacles to adoption of electric vehicles at the National Academy of Sciences, we concluded that there was no possibility of even getting a carbon tax passed, and that was under the Obama administration, which had a much more pro-environment stance than our current administration," Melissa Schilling, professor of management and organizations at New York University, told Fortune.

In addition, the United States is so much larger and geographically diverse than these first-mover countries, introducing more variation to the performance and payback of an EV.

"It's better to target an end goal like emissions reduction rather than the outright banning of a technology because there are certain gas and diesel vehicles that can do a lot towards limiting emissions, whereas electric cars can actually be more damaging," said Jeremy Michalek, professor of engineering and public policy at Carnegie Mellon, and director of its Vehicle Electrification Group.

A key factor that would speed—or slow—a transition in the United States is price. Mark Wakefield, managing director for AlixPartners, told Fortune that EVs are still too expensive relative to fossil-fuel-powered vehicles for most consumers. That could soon change as battery costs continue to decline. In fact, in a new report, Bloomberg New Energy Finance has predicted that EVs would become cost-competitive with conventional vehicles by 2025. 

And partial electrification—hybrids—could help countries like France transition in the meantime.

"As far as France pushed their policy, they have also showed a pragmatism that while they are pushing for this, they are also changing their methods to what's most cost-effective," Wakefield told Fortune. "It's certainly helping move their industry towards that, they were practical because they saw that hybrids are a much more economic answer."

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