Vehicle Retrofits: What Is the Potential for Decarbonizing the Transportation Sector?

As we mentioned in other articles^[1][2][3], electrification vehicles is a a key issue for the transition. To successfully carry out this electrification, there are two possible options. The first is to replace the fleet with electric vehicles. The second, on the other hand, consists of convert from internal-combustion vehicles to electric vehicles: this is what is known as the Electrical retrofit.

Carbone 4 analyzed the feasibility and potential of electric retrofits for three types of vehicles (passenger cars, light commercial vehicles, and buses).

To what extent can it serve as a means of accelerating the electrification of the vehicle fleet? In what circumstances is it appropriate from a climate or financial perspective?

1 – What is retrofitting?

To accelerate our transition to cleaner powertrains while avoiding the manufacture of new vehicles (and the associated greenhouse gas emissions), it is possible to convert existing internal-combustion vehicles into electric vehicles. This is known as a “retrofit.”

Retrofitting can be performed on all types of vehicles: motorcycles, cars, light commercial vehicles, buses, tour buses, and trucks. The requirements for retrofitting are as follows: the vehicle must have more than 5 years, a passed the vehicle inspection, a Original configuration in good condition and to be registered in France^[4].

The changes resulting from the retrofit project consist of remove the entire internal combustion powertrain of the vehicle: engine, axle, transmission, and clutch, as well as the fuel tank and exhaust system, and to install an electric motor and a battery pack. The battery is often placed in the space left by the fuel tank or in the engine compartment. Finally, certain auxiliary components specific to electric vehicles are installed, such as an electronic control unit, a charging port, a dashboard, etc.

2 – Overview of the Scenarios and Scope

For this study, the analysis is structured around 3 scenarios decisions following the operation of a combustion-engine vehicle (considered to be a diesel vehicle) for 5 years :

• Scenario A : extending the service life of the same diesel vehicle by 10 years.
• Scenario B : sale of the internal-combustion vehicle followed by a purchase of a vehicle new electric and its operation for 15 years.
• Scenario C : retrofitelectric and operation for 10 years.

Scenario C involves installing a battery with lower capacity than new electric vehicles. This is because the space available after removing the components of the internal combustion engine powertrain does not allow for the installation of such large batteries only for new electric vehicles.

3 – Presentation of Results for Carbon Intensity

Carbon intensity was assessed in France for the three scenarios using a life cycle approach. This therefore implies that the phases of manufacturing of the vehicle, of the retrofit kit, from the battery, usage and the end of life vehicles and equipment are considered^[5]. See Tables 1 and 2 in the appendix for more information on the scope of the analysis and the assumptions used.

The following chart shows a comparison of greenhouse gas emission intensity starting in Year 5 depending on the scenario and vehicle category. Two main findings emerge from the results:

• On the one hand, electrical retrofitting allows to significantly reduce the vehicle's carbon footprint by 81% compared to continuing to operate the diesel vehicle. Greenhouse gas emissions from the retrofit project remain negligible compared to the benefits it provides.
• Electric retrofitting results in a greater reduction in greenhouse gas emissions than purchasing a new electric vehicle. This advantage is primarily due to cost savings in vehicle manufacturing and the use of a smaller battery. This discrepancy becomes even more noticeable as the difference in battery size between the electric and retrofit versions increases, particularly for city cars.

So what are the key takeaways from a carbon perspective?

Retrofitting, like buying a new electric vehicle, is therefore relevant to effectively reducing CO2 emissions of a vehicle.

However, retrofitting offers several additional benefits:

• It allows you to reuse the vehicle's chassis and body compared to a new electric vehicle;
• It imposes a certain modest battery capacity (more limited space);
• It allows you, excluding scrappage incentives, to Ensure that a combustion-engine vehicle leaves the parking lot (unlike in Scenario B, where the internal-combustion vehicle may end up on the used-car market).

4 – Presentation of Results for Cost of Ownership

Following the same approach as the carbon life-cycle analysis, the cost analysis is conducted in terms of total cost of ownership (or “total cost of ownership,” TCO) to assess the financial viability of the retrofit. The total cost of ownership is calculated starting in year 5 (the retrofit’s lifespan) and includes the costs energy (gasoline, electricity), maintenance and insurance, as well as residual valueafter a discount between years 5 and 15 (see Appendix, Table 3). The calculation also takes into account the purchase of the EV and the retrofit kit for scenarios B and C, respectively, as well as the return on investment from the resale of the vehicle and the internal combustion engine. However, for the sake of simplicity, purchase incentives for electric vehicles, such as retrofit conversion subsidies, are not taken into account in this model.

The following chart shows the results for each vehicle category:

An analysis of the total cost of ownership reveals three key points:

1. The order of the TCOs is different for each vehicle category, because it depends mainly on the cost of the retrofit, the price of a new vehicle, the resale value of the old vehicle, and the mileage.
2. For the categories Light commercial vehicles and buses, theRetrofit is presented as the least expensive option.
3. Since the difference between the cost of the retrofit and the cost of a new electric vehicle is smaller than for the other two types of vehicles, the city car does not, in this model, offer an economic advantage over its retrofitted counterpart^[6].

In conclusion, From an economic standpoint, retrofitting is beneficial for vehicle categories where the transition to electric power requires very high levels of investment, such as light commercial vehicles or heavy-duty trucks. Nevertheless, several countries, such as France^[7] make the retrofit eligible for subsidies for switching to electric vehicles, which may affect the TCO figures calculated earlier.

5 – Presentation of Results for Material Intensity

This section aims to analyze the benefits of retrofitting compared to purchasing a new electric vehicle in terms of metal usage, some of which are critical to the energy transition.

The frame that is reused during the retrofit consists mainly of ferrous materials such as steel and plastics. For both retrofitted and new electric vehicles, the electric powertrain is made of steel, aluminum, by copper, but also of rare earth elements, which is not the case for all electric motors. As for batteries, the analysis considers an NMC 622 battery^[8] for the new electric vehicle (Scenario B) and the retrofitted vehicle (Scenario C).

The scenarios are compared based on matter intensity in g/km, calculated as the sum of cumulative material requirements divided by the total distance traveled. The period includes the thermal phase common to all three scenarios.

By comparing the cumulative material intensity of the Different scenarios for the city car, we observe that:

• For retrofits as well as new electric vehicles, the material footprint will be greater than in Scenario A.
• Retrofit nevertheless presents a a significant advantage by reducing material requirements by 58% compared to a new electric car, thanks to the reuse of the body and chassis, as well as the installation of a lower-capacity battery.

The findings are the same for other types of vehicles, with similar percentage reductions.

6 – Conclusions

Vehicle retrofitting is a complementary alternative the sale of new electric vehicles, which is absolutely essential for the rapid decarbonization of the vehicle fleet.

From an environmental perspective, the analysis confirms The Benefits of Retrofitting for All Vehicle Categories. Compared to buying a new electric vehicle, retrofitting is a relevant alternative to reducenot only greenhouse gas emissions from vehicles, but also the material footprint of certain metals critical to the transition.

Economic Relevance of the electric retrofit model remains a issue to be addressed, especially for light-duty vehicles. Subsidies in each country can improve its competitiveness, until further industrialization of the sector leads to lower development costs for conversion kits and lower certification costs.

Thus, the main advantage of retrofitting lies in its combination of technological leverage (significant reduction in emissions as we transition to electric vehicles) and the power of moderation by reusing an existing chassis and installing a smaller battery, and thus a less use of resources.

Appendix

Carbon intensity

Emissions from the manufacturing phase in Scenario B include the production of a new chassis and body. Scenario C considers emissions from the production of the new electric powertrain (retrofit kit) and the battery. The use phase includes combustion and the upstream production of fuels and electricity. Scenarios B and C account for a 10% loss during recharging.

Cost of Ownership