Is the main opportunity for EVs away from consumer car sales?
Cory Rogers Executive Search, iot, Electro Mobility...
Is the main opportunity for EVs away from consumer car sales?
By Cory Rogers, Head of Disruptive Tech, firstname.lastname@example.org
Haters are going to hate
When discussing most areas of the green economy its easy to find contrary opinions. Wind turbines arouse fierce local planning opposition, solar panels need better recycling. The fact that either is better than the alternative often fails to register with those who would rather knock green efforts. An area of the green economy that often suffers criticism is the electric vehicle sector, often led by those with emotional attachment to petrol or diesel cars. Despite the great clamour from governments and societal pressure about the need to shift our lifestyles and economy in a more sustainable direction, there is a troubling lack of balanced development within one of the most important sectors for tackling emissions – transportation, in particular in the widespread adoption of electric vehicles.
The not so smooth transition to consumer EVs
Where does that imbalance manifest itself? One example is the fact that we’re seeing increasing obstacles and challenges in the EV consumer marketplace. A second conundrum is why some more established automotive manufacturers have yet to truly embrace EVs, despite some specialist manufacturers demonstrating the viability of the sector (at least one major manufacturer seems to have not got beyond the concept car stage). Strangely this hesitance in the consumer market is belied in both public and private enterprise sectors, which are demonstrating tremendous innovation in applying EVs to their organisations.
Challenges facing the EV consumer market
People love to talk green, and there’s evidence that running electric cars is already cheaper than petrol/diesel cars, so why are people not queuing up around corners to get their hands on EVs? There are lots of possible reasons people aren’t snapping them up. One is that sticker prices on EVs tend to be higher than petrol or diesel, and many are worried about the EV having insufficient range. Another factor is infrastructure, with people worried about not knowing where charging stations are, or how to install a charger in their home. In general, there may be many misconceptions about EVs. Certainly, the industry needs to do more to combat misconceptions if it wants to boost sales.
The data on what’s stopping people buying may not be clear, but there are other more alarming and apparent factors that are hindering the EV market, most prominent of which is the shortage of key components. In the past there have already been problems with the supply of lithium, but now it seems that the main shortage comes in the form of cobalt, another essential ingredient to modern EV batteries. It’s only a matter of time before demand does start to increase more rapidly, particularly in the UK where the government has just announced that their moratorium on new diesel cars has been brought forward from 2040 to 2035. Further to that, they have added petrol and hybrid cars to the nix list. It is predicted that in 2020 global EV production could top 4 million units, with a further forecast of it reaching 12 million by 2025. Shortages are already happening now, which have disrupted production in several high-end vehicles, including the Audi e-tron and the Jaguar I-Pace. They just can’t make the batteries fast enough.
It is perhaps the awareness that there are supply problems that may be causing people to hold back or encourage some manufacturers to consider alternative technologies e.g. hydrogen instead. Innovation and greater diversity in materials used will be crucial for the long-term durability of the sector.
Successes in public and private enterprise
The consumer market may be struggling with the above problems and more, but that doesn’t mean EVs are not taking off elsewhere. In the realm of public transport and private delivery/courier services, EVs are quickly becoming the hot ticket.
On February 18, 2020, TfL opened the first all-electric bus route in London; the 94 service between Acton Green and Piccadilly Circus. In the proudest traditions of UK public transport it seems that you can wait for ages for an all-electric bus route, then three turn up at once; the next routes scheduled for an electric makeover are the C3 and the 23, helping to make Clapham and Hammersmith greener. Electric buses are in fact a global trend, Santiago in Chile also added 200 new electric buses to their fleet in 2019. Beijing, China also aims to have the entire downtown bus fleet as electric by the end of 2020 (about half of Beijing’s bus fleet is already electric).
Private Delivery/Courier Companies
Many of us already rely on the expedient and efficient service of companies like DHL, UPS and others to deliver our purchases from platforms like Amazon. What you may not know is that Amazon is currently constructing its own fleet of 100,000 delivery vans - all electric - from EV manufacturer, Rivian. It’s part of their overall green strategy, of course, but also a part of Amazon trying to increase its share of self-delivered items. UPS is also refusing to be left behind. They are now working in the UK with British start-up, Arrival, to roll out new electric vans (Arrival’s ‘Generation 2’ models) for use by UPS in the UK. These vans will be able to travel up to 300 miles on a single charge, and eventually will be rolled out across Europe and the US.
So, where’s the main opportunity?
Looking at what’s going on right now can only offer you a short-term answer. The same battery shortages that are impacting the consumer market may also impact their implementation in other sectors. At the same time, however, strong growth in EV uptake is largely a certainty when you look at government policy and investment around the world, and when you look at the number of top car brands who now offer EVs. Gone are the days where Tesla and Toyota were the only players. EVs are bound to become the new normal, but the question is which sector will capitalise the most, and first.