Retrofitting internal combustion vehicles to electric vehicles: is it a serious matter?

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The retrofit lobby has the wind in its sails and has won its main battles in 2020. It still has to win the battle of markets and volumes and thus get out of the crafts. This will require drastic price cuts, which will also require strong public support. This may seem like a risky gamble today, but the political stakes are fundamental: if electrification has, for the moment, a very elitist character which in fact excludes whole sections of society, retrofitting can allow an "inclusive" decarbonation and therefore deserves to be supported.

 

Anecdotal to date, the retrofitting of vehicles equipped with combustion engines into battery electric vehicles is much talked about and enjoys fairly strong public support.
Led by the association of players in the electric retrofit industry (AIRe), the lobbying of the dozen or so companies that intend to explore this avenue is proving very effective. In April, it obtained that the decree concerning the reception of electrified vehicles be published and finally makes the real start of the sector possible. The said decree published in the OJ on April 4 was essentially in conformity with the AIRe's wishes since it retained the system called "prototype approval" which allows the company proposing the kit to be installed to obtain the said approval from Utac without the manufacturer of the vehicle concerned having a say.
 
 Then, once approval has been obtained for all vehicles with the same chassis - and not for each variant of the same model - it is possible for the kit to be fitted by repairers approved by the kit supplier and, "at the end of the conversion, the installer provides the manufacturer with a conversion certificate and the manufacturer then issues and signs a certificate of conformity. This document is sent to the owner of the transformed vehicle in order to update its registration certificate". His Crit'Air sticker can thus change and he can stop switching to the pump.
 
The organisations representing the downstream sector (FNA, CNPA, FEDA) had welcomed this progress. The CNPA stressed that "Retrofitting is now officially recognised as a sustainable mobility solution, favouring the circular economy and an activity that creates jobs in France. It is a virtuous recycling solution that allows motorists to give a second life to their thermal vehicle".
 
Damien Pichereau, LREM deputy for Sarthe, explains: "The transformation of combustion vehicles into electric vehicles via a complete replacement of the engine could enable us to take advantage of the existing fleet of vehicles to develop electric mobility more rapidly, saving on the construction of new vehicles and therefore on energy consumption and the associated CO2 emissions".
 
He also stresses the lack of competition with new or second-hand electric vehicles offered by brand networks and the importance that this market could have in complementing the activity of garages, which could be reduced by electrification.
 
Relaying this quasi-unanimous support, the Grenoble metropolis had the first announced its will to make individuals and companies benefit from a bonus ranging from 4,000 euros for a utility vehicle below 2.5 tons to 6,000 euros above 2.5 tons and being able to reach up to 7,200 euros for a private vehicle under condition of resource.
The decree of 30 May 2020 relating to aid for the acquisition or rental of low-polluting vehicles included retrofitted vehicles and the clean vehicle conversion premium of between 2,500 and 5,000 euros (depending on the reference tax income) could thus be used by private individuals for this purpose.
 
At the beginning of October, Valérie Pécresse announced that the Ile de France Region that she presides over would in turn offer 2,500 euros in aid for retrofitting her vehicle. Enthusiasm therefore seems general and one must wonder if the matter is serious.
In fact, when one looks at the dossier and listens to the actors, one can only notice that, if the idea is politically and economically attractive, the window of fire is for the moment very narrow. Indeed, according to the synthesis proposed by Emmanuel Taillardat in the Feda White Paper presented this Thursday and to be published in November, "the cost of an electric retrofit is estimated today, by the members of the AIRe association, at about 15-20.000 euros HT for a city car or compact sedan".

 

The bulk (55 to 60%) of the envelope would correspond to the cost of purchasing the batteries: even if we were content with autonomy limited to 150 km, they would cost at least 6,000 euros. E. Taillardat specifies on this subject: "The purchase cost of the current lithium-ion cell technologies used by retrofit kit manufacturers (Li-ion Iron Phosphate / Li-ion Nickel Manganese Cobalt) is around 400€ to 700€/KW for a retrofit battery manufacturer (this cost is much lower for car manufacturers, around 120€/KW *). That's about 6,000 to 10,500 euros for a 15KW battery, 8,000 to 14,000 euros for 20KW and 16,000-28,000 euros for 40KW". As Numerama wrote in June: "The potential is strong, some associations talk about promising technology. But in order to develop, retrofitting will have to work on one crucial point: its price".

 

 Today, since volumes are very limited, the players' ability to obtain acceptable prices from battery manufacturers is very low and they have to accept to pay five times more than the manufacturers.
As the demands relate to a heterogeneous fleet, the very expensive homologations must be multiple and the installation processes remain very little "industrialisable". Faced with a fleet of passenger cars that is - according to our estimates - almost 11 years old on average and even more if we confine ourselves to the fleet of second cars for "commuters" who would be the natural target for retrofitting, it is difficult to see how volumes could come when the prices of new electric vehicles are falling and a market for passenger cars is emerging.
 
As for LCVs, the picture is a little less gloomy if it is a question in particular of highly equipped LCVs only making short journeys like "food trucks", butcher's vans at markets or hearses, but this corresponds to very narrow markets which tend to make us doubt the realism of the ambitions of the Sarthean deputy for whom: "The objective is to create an industrial sector of retrofit in France, and tomorrow in Europe". 
 
In view of the dossier in October 2020, it indeed seems quite perilous to follow the co-president of the AIRe when he declares: "We expect that there will be 60,000 vehicles to be transformed in the five years to come. And in the next ten years, between 700,000 and 800,000 vehicles, from buses to scooters. A figure that may seem enormous, but it represents only 2% of the French car fleet!"
 
In fact, even if politicians and professionals managed to bring the price of these retrofits down below 5,000 euros, the market would remain limited to the rather small fraction of the second vehicle fleet (about 14 million VPs) at the same time not too young (so as not to compete with new or second-hand electric vehicles - which will remain rare) and not too old (so that their residual value would be more in the 5 to 10,000 euro zone than in the under 5,000 zone).
 
The "target" can thus be estimated at two to three million VPs to which would probably be added a large million LCVs. This is by no means ridiculous and, provided that the operators know how to Europeanise and find the necessary partners and public support in other EU countries and, in particular, in the countries of Central and Eastern Europe whose fleets are old and whose renewal is very slow, D. Pichereau's objective can make sense. To put it another way, the wager, which is still a risky one, deserves to be tried.
 
Economically, it is not aberrant. Ecologically, the fact of not scrapping vehicles which, even if they are emitters, are no less capable of running for at least another ten years is also justified. But above all, politically, the retrofit proposes a vision of electrification and decarbonation that is doubly inclusive: instead of excluding from this transformation the modest households and garages that every day enable them to ensure their mobility by very slowly diffusing new, expensive and mostly imported electric vehicles to a minority of households, an alternative path is opening up.
 
No one knows if and how far it will be practicable but, as with the new electric vehicle, we know that it will depend as much on the inventiveness of the companies involved as on the fate that public policies will reserve for them.
For the moment, the dossier seems to be well under way and the support is solid. It remains however to go up this price slope and, in the French context where the State has finally committed itself and has managed to force the hand of the manufacturers so that they all climb up in the famous Airbus of batteries, to make a place for the retrofit companies in this Airbus so that they can stop paying five times more for their batteries than PSA or Renault when Douvrin will deliver them in this direction.
 
(*) Emphasis added by us.
 
 
 

 

The weekly column by Bernard Jullien is also on www.autoactu.com.

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