Disruptive Technologies Driving the EV Revolution
The 20th century was the age of automotive mobility. What makes cars so popular to this day is the combination of individual freedom and flexibility that they offer for traveling.
However, given the contribution of the automotive industry to climate change, the natural question is whether there is still a place for cars in this world.
The answer is yes, but only if they are electric cars, powered by electricity generated from renewable energy sources.
This simple answer has enormous consequences for the industry. Let's have a look!
Table of Contents
The electric vehicle (EV) revolution is accelerating. The graph below shows the growth in electric vehicle (BEV and PHEV) stock.
As you can see, the number of EVs has risen rapidly over the past decade, from 0 to 11 million. While 11 million may seem like a large number, it's not much when compared to the global stock of internal combustion engine (ICE) vehicles, estimated at around 1.2 billion.
This growth has been concentrated in China, Europe and the US. EV adoption in developed countries is growing at a calmer pace, in large part because there are less investments in charging infrastructure.
However, the potential of e-mobility remains huge in developing countries. The key is to engage in e-mobility that suits the local context. For example, scooters is a key mode of transport in Indian cities as they enable quick navigation through crowded urban areas.
From the manufacturing side, 18 of the 20 largest original equipment manufacturers (OEMs) have committed to increase their offer and sales of EVs.
Nevertheless, having car models to choose from is not enough. EV drivers need to charge somewhere. Range anxiety is one of the largest hurdles for EV adoption. Hence, developing charging infrastructure is essential, especially a reliable fast charging (DC) network.
A few companies have started specializing in this, like Fastned and Ionity, but much more is needed, especially in developing countries.
However, EVs and charging infrastructure is not everything. Energy generation is the last piece of the puzzle.
This is how electricity was generated in 1973.
This is how electricity was generated in 2019.
For EVs to be zero emission, we need to eliminate the use of coal, oil and natural gas in the generation of electricity. With the total demand for electricity increasing rapidly, this is a challenge and will requires a lot of investment.
We also need to make the entire supply chain more circular by closing, slowing and narrowing resource loops.
Slowing is about prolonged use and reuse of goods over time, through design of long life goods and product life extension.
Closing is about reuse of materials through recycling.
Narrowing is about using fewer resources per product.
Reaching a trajectory consistent with climate goals is very difficult. It requires stronger and united ambitions from all countries.
Aiming for Zeros
Zero-type goals are not novel in the automotive industry. Zero Defects helped adopt lean production in the late 20th century. It seemed unachievable at first but continued improvements such as the Six Sigma approach have gotten us close.
The same principle must be used for sustainable mobility in the 21st century. Three major disruptive technologies will reshape the automotive industry.
Electrification: battery-electric vehicles have zero tailpipe emissions. If powered solely with renewable energy, we can reach the Zero Emission goal. + Zero Energy
Automation: with more advanced automated driving functionalities, we can approach the Zero Accident and Zero Congestion goals.
Connectivity: with sharing services for cars and trucks in combination with automated driving, we can reach the Zero Empty goal. Most of the time cars are parked in front of homes (80%) or offices (16%). Just 4% are driving around. Mobility-as-a-service (MaaS) will make car transport more efficient, dramatically reducing the number of cars needed and allowing us to approach the Zero Cost goal.
These are the drivers of the EV Revolution. Let's take a look at each of them in detail.
The driver for electrification is urban mobility. Municipalities want to improve air quality and reduce congestion and traffic noise.
Reducing emissions is a crucial factor, but it's seen as a global issue, not a local one.
In urban traffic, vehicles slow down a lot because of congestion and traffic lights. This means, the regenerative braking capacity of EVs is quite helpful.
Regenerative braking uses the electric motor of an EV as a generator to convert kinetic energy otherwise lost when decelerating back into stored energy in the battery. This energy can then be used next time the vehicle accelerates.
Electrification of heavy transport
Did you know that more people die from automobile pollution than traffic accidents? It's true. However, it's a misconception that passenger cars are the main cause of pollution in cities.
The reality is that cargo transportation like trucks and vans is responsible for 2/3 of the bad air quality while only driving 1/3 of the kilometers.
Hence, the electrification of light transport is important but that of heavy transport is crucial.
Electric buses were the earliest and most successful case of electrification in the HDV market. However, the demand for electric trucks is rising.
One example I was involved in while working as a regional marketer at EVBox was the fleet electrification of a logistics provider in Sweden.
The HDV segment includes a wide variety of vehicle types, from long-haul freight to garbage collection trucks. While sustainability might seem to be the main motivator on the surface, choices in this segment are largely cost-driven.
In the past, EVs have been more expensive. However, this has changed with improvements in battery technology. The initial cost of an EV is still higher in many cases but the total cost of ownership (TCO) is generally lower compared to their ICE counterparts. As a result, HDV electrification now makes sense from a business perspective.
Furthermore, the increasing private sector demand for zero-emission commercial vehicles is amplifying market signals for OEMs to develop EVs. For example, Amazon ordered 100 000 BEV delivery vans from Rivian in 2019. Other companies that have made significant investments in fleet electrification include IKEA, DHL, UPS and Walmart.
What about sustainability?
Are electric vehicles really better for the environment? To answer that question, take a look at the following lifecycle assessment:
The key insight is that BEVs powered by renewable energy (solar, wind, water) have over four times lower environmental impact than ICEs powered by petrol or diesel.
To learn more about EV technology, check out my article about how electric cars work.
When talking about electrification, we need to talk about infrastructure.
While most EV charging is done at home and work, developing public charging infrastructure will be critical as EV drivers increasingly demand improved autonomy. In 2020, there were 1.3 million public chargers in the world, of which 30% were fast chargers.
The Netherlands is often used as a EV charging success story. In 2017, there were 60,000 public charging points and about 750 fast chargers. 100% of these public chargers were fed with renewable energy. Open charge protocol (OCPP) allows EV drivers to see which chargers are available, free, broken or occupied. Furthermore, interoperability makes it possible to pay with one card at all the chargers.
In the EU, the situation is unfortunately not that good and it's much worse in developing countries. The reason we need coordination is that cars tend to drive across borders.
For charging security we need the 'Triple A'.
Availability: chargers should be online
Accessibility: chargers should be available and payable ad hoc
Affordability: if price per kWh is above €0.5, diesel is cheaper
The new hot topic is smart e-mobility. Electrified transport is not enough. The system needs to be smart as well. Why?
The social costs of traffic accidents are high: estimated at 14 billion per year in the Netherlands alone.
The reality is that we humans are good drivers only when we concentrate, and distractions are more abundant than ever. 95% of road accidents are caused by human error.
Hence it should come as no surprise that smart self-driving vehicles is the key to dramatically reduce road accidents.
In fact, Tesla saw a 40% decrease in the number of crashes after introducing Autosteer.
Fewer accidents means lower costs, and that's what we want right?
The answer is yet. However, the few accidents that will take place will cause a lot of debate. Why? Because AI will decide who dies and who lives. This is currently sparking strong moral and legal debates.
Smart e-mobility is possible only when electrification and automation come together. But for this to happen, acceptance of automated driving is crucial.
The costs of congestion are also high. Again, this can be drastically brought down when mobility is automated.
Levels of Automation
Execution of steering and acceleration/deceleration – monitored by system
Monitoring of driving environment – monitored by human driver
Fall back performance of dynamic driving task – monitored by human driver
System capability (driving modes) – some driving modes
Execution of steering and acceleration/deceleration – monitored by system
Monitoring of driving environment – monitored by system
Fall back performance of dynamic driving task – monitored by system
System capability (driving modes) – All driving modes
The market for connected cars is predicted to reach $215 billion by 2027.
The reason for this is quite simple. In addition to being safer, cooler and more cost-effective, connected vehicles open up new revenue streams for the automotive industry (e.g., remote diagnostics and predictive maintenance).
Connectivity implies vehicle-to-everything (V2X) – direct flow of information between vehicles, pedestrians and road infrastructure. This reduces the chance of accidents by alerting drivers of nearby hazards
The V2X market is just getting started. Most manufacturers already incorporate V2X technology and so transport is becoming increasingly connected, and thus safer.
Another reason that customer demand for car connectivity is increasing at such a high speed is that connected cars offer a significantly better consumer experience.
Consumer expectations from cars are changing from mere tools moving us from A to B, to integrated, fully-connected hubs.
Embedded connectivity is the key to satisfy the rising demand for a luxurious driving experience.
Xpeng has made this a focus in its EVs. For example, its G3 model is built with a proprietary intelligence system. This includes cool features like AI smart assistant, V2X, infotainment, remote APP control just to name a few.
According to McKinsey, 40% of consumers would change car brands just to gain more connectivity within their vehicles.
Connectivity and automation enable new business models and monetization opportunities.
For example, driving empty is a waste of cost. Through connectivity, the total cost of ownership can be shared among many consumers. Car-sharing companies like BlaBlaCar have successfully implemented this business model.
Fixed costs represent 50% total car costs. Hence, when mobility becomes a service, these fixed costs are distributed among many consumers and therefore driving a car becomes cheaper.
Integrated connectivity will allow manufacturers to create lasting connections with customers by offering additional features such as remote diagnostics, predictive maintenance and online service scheduling.
The majority of cars are unused most of the time. Therefore, if we make autonomous EVs connected and adopt new business models like car-sharing, we need way less cars.
Tony Seba talks about the death of the private car. By 2030, we will all be driven in fleets of company-owned autonomous EVs summoned in minutes, at 10% of today's cost.