A ground breaking news for electric vehicles in Europe: the European congress has passed the latest emission standard for commercial vehicles. EnergyTrend, a research division of TrendForce, believes that low emission vehicles will become an essential development trend for car makers in the near future. Therefore, although concerns about oversupply of lithium battery in 2011 still remain, EnergyTrend believes that, with more specific carbon emission regulations made for vehicles, car makers have to prepare for low emission vehicle launches by 2014. It is forecasted that shortage of lithium battery supply will appear as a result. (Chart 1)

The European congress has released the latest regulation on carbon emission standard for commercial vehicles on February 15, 2011. As for 3.5 ton light commercial cars, 70% of vehicles introduced to the market have to meet 175g/km emission standard, and 100% in 2017. For those car makers who can not reach the goal, they are requested to pay $129/g incremental penalty payment starting from 2019. However, car makers are allowed to offset high carbon emission vehicles with vehicles emitting less than 50g/km to reach the target.

The legislation authority clearly shows EU’s determination to keep strict carbon emission standards for automobiles in Europe and to expedite the cooperation and development among parts manufacturers. Under such circumstances, several car makers are forced to adopt lithium batteries in the supply chain. In the meantime, , one of the biggest lithium battery exhibits in the world, Battery Japan, in early March 2011 in Tokyo, Japan. Many participants are gathered to witness the reformation of this particular industry which is now believed standing at a crossroad.