A competitive road map for electric mobility

Mobility is the future and, in Europe, the priority source for decarbonizing light transport means is electricity. Stimulating competitiveness in the automotive industry as part of the transformation towards net zero emissions requires efforts by socio-economic actors, public-private consensus and alliances between companies and investors to make the electrification of the Spanish economy easier, more comfortable, sustainable, and intelligent, according to the first session of Cepsa's Energy Spaces, designed with the mission of accelerating the sustainable transition.

By Ignacio J. Domingo

E-mobility is one of the cornerstones of the European Green Deal. In this context, Spain needs to establish a road map for its transport industry that is in line with the mobility policy with renewable energy sources implemented by the EU. It should not only consolidate the global leadership of a capital sector for the European economy and, of course, Europe, but also boost its competitiveness against powers such as the US or China. This road map should redefine both the strengths and weaknesses of the Spanish energy transition and attest to the competitive efforts, state resources, credit facilities, tax advantages, and necessary technological and innovative instruments to align companies, investors, authorities of the three public administrations and social sectors with the challenge of accelerating this energy conversion towards sustainability.   

All of this with specific clean source solutions -hydrogen, biofuels or SAF- for each productive subsegment, whether it be maritime, air or land transportation and their variants of light, heavy or passenger locomotion vehicles.  

Energy Spaces, which is designed to find joint action strategies between state, regional and local institutions and experts, academics, entrepreneurs and civil society leaders, aimed at sharing ideas and reaching conclusions on various topics related to the advancement of the energy transition. In its first session, participants agreed that a simpler deployment of electric mobility is necessary. It should have fewer bureaucratic obstacles and simpler administrative processes. It should be more sustainable, capable of expanding current charging points, and smarter, based on a modern regulatory framework and technologically advanced infrastructure networks, and capable of shaping a national consensus with constant contributions from socio-economic actors.         

In line with European guidelines, the forum promoted by Cepsa provided an overview of the situation in Spain in the context of the internal market, where transport is the most polluting industry overall, accounting for 30% of total emissions, between light and heavy (and 15% if we look at it globally).

Specific features of the Spanish market

But electric mobility, one of the key pieces of the European decarbonization puzzle, “has not quite taken off in Spain,” agreed the experts in this inaugural session of the Cepsa Energy Space. In 2023, sales of electrified vehicles accounted for 12% of the 113,000 sold, far from the 21% of the European average, and amounted to only 1.2% (339,000) of the total Spanish car fleet. 

In addition, there are nearly 30,000 charging points, and 2,000 fast or high power charging points, although the idea that "the infrastructure is still inadequate" predominates in the collective imagination. It is one of the disadvantages that consumers cite when assessing whether to purchase an electric vehicle (EV) and an obstacle that would explain why annual sales of electric cars continue to be limited and similar to the figures in the years following the credit collapse of 2008. All of this, together with increasingly established social trends such as not owning a private car and opting for the growing range of shared vehicles (Maas, Mobility as a Service) that alleviate traffic and reduce emissions. Or certainties such as the fact that civil society, especially younger generations, are opting for e-mobility, supported by the boom in digitalization. 

Hence the convenience of seeking new opportunities for the automotive industry, one of the jewels of the European economy that has contributed for decades to both the prosperity of the Union, by representing 7% of the community's GDP and employing 14 million people directly or indirectly, and to technological innovation. 

 How the Spanish road map should be tackled 

Against this backdrop, the guidelines extracted from the Cepsa forum are clear and focus on the Spanish road map in three preferred lines of action: 

1. Management and deployment of an efficient charging infrastructure for a number of significant reasons:

- The deployment of this network becomes more complex in Spain, as 65% of vehicles do not park in private garages, which increases the weight of public charging points.  

- Creation of a map that defines at the state level the basic network of public charging stations that ensures battery replenishment in areas with high traffic density and fair electrification criteria that avoid geographical inequalities; for example, in rural areas.   

- Include charging infrastructure in general urban planning and consider them assets of public interest or utility.  

- Strengthen capacity of the electricity grid at points where the highest demand is found. 

2. Aid for the purchase of electric vehicles.

- Return to a subsidy system similar to the Renove Plan with direct discounts at points of sale (dealerships), because price remains the psychological and financial barrier to the purchase of a electric vehicles.

- Implementation of social incentives such as tax breaks or assistance to companies to foster their own electric mobility and that of their employees. Among others, social leasing sponsored in France or public initiative carsharing.

   - Raise awareness about the benefits and advantages of electric vehicles that counter false stereotypes that threaten this production segment. 

3. - Simplification of procedures.

- Streamlining of bureaucratic procedures and authorization for charging points and the granting of subsidies for the purchase of electric vehicles. 

- The creation of a single window to standardize and streamline administrative procedures and connection to networks throughout the territory. 

- Implementation of a single and accessible digital assistance center for all companies developing charging points to assist in making bureaucratic processes visible and clear.  

Smooth dealings between institutions, companies and consumers

Connecting economic actors and public-private cooperation that was raised at Cepsa's forum is also the key for the McKinsey consulting firm: “The execution of plans involves a multitude of economic, social and political actors in the mission of decarbonizing the automotive sector, which must also adapt to different national and regional ecosystems,” making it essential for institutions and companies to have "active participation" under clear and competitive rules of the game “capable of transferring the profit margins of electric mobility to adjacent productive segments.” 

The firm’s experts project that global demand for electric vehicles will increase sixfold from the 6.5 million vehicles sold in 2021 to 40 million in 2030. 

 “The mobility industry, especially its light vehicle segment, has embraced the consensus that the most effective decarbonization of its value chains comes through electrification,” notes Patrick Schaufuss, a partner at McKinsey in Munich.

Ignacio J. Domingo has spent most of his 30 years of professional practice analyzing geopolitical, international economic and capital market issues in Expansión and collaborating with media channels such as El Confidencial, Capital, Estrategias de Inversión and El Diario.es, among others. He received the award as a first runner-up for the Citigroup Award, which recognizes the best annual economic reporting.