2017 has been a monumental turning point for the future of electric vehicles. This year, the discussion around electric vehicles as the future of how cars and trucks will be powered went from a question of “If?” to “When?”
As recent as late 2016 and into early 2017, the auto industry was having heated debates about whether, for example, fuel cell vehicles provided a better future than battery electric vehicles. Several auto industry executives also still declared their disdain for electric cars.
The usual arguments against electric vehicles (EVs) – their battery range is too short, they take too long to charge, there aren’t enough chargers, they are still too expensive, and other issues – were still being cited in almost every article on EV adoption and interviews with auto executives. (Note: These are all legitimate concerns, however it has become clear that we are on a path to fix all or most of these shortcomings of EVs within the next 5–7 years.)
But beginning at the Consumer Electronics (CES) show in Las Vegas in January 2017, several auto companies started announcing significant electrification plans, and the EV announcements just keep on coming. And many of these are even from automakers that were previously highly skeptical.
My own analysis of new EVs expected to be launched in the US suggests around 65 models (and climbing almost weekly) will reach dealers between now and 2022. This would mean that, by the end of 2022, a combined 100 or so BEVs and PHEVs will be available to purchase in the US.
The buzz around the launch of the Tesla Model 3 certainly added to the EV turning point.
The governments of China and India have also announced plans to move aggressively toward vehicle electrification in the next 10–15 years. And France and the UK declared they will ban internal combustion engines by 2040. In August 2017, German Chancellor Angela Merkel suggested that a ban on the internal combustion engine was on the way, but did not set a timeline. Furthermore, Continental, a major supplier for automakers around the world, came out with a bold prediction: internal-combustion engine development by German automakers will essentially end by the year 2025.
My personal favorite signal point was The Economist’s August 12 cover article and imagery declaring the end of the internal combustion engine.
Now, with EVs only at a bit above 1% of new vehicle sales in the US and in all but a few countries (and markets like California) around the world, clearly, a lot of people still haven’t bought in. But this is primarily a supply rather than a demand issue. There have been almost no EVs produced to date that meet the wants, needs, and budgets of the majority of consumers. EVs are still only being purchased by early adopters.
But in the next 5–7 years, nearly all new electric vehicles will have a battery range of at least 200 miles – which most observers consider the minimum range requirement to achieve mass adoption. Electric vehicles are also expected to reach cost parity with internal combustion engine models in the same timeframe, and fast-charging should be widespread along with 80% charging times of around 15–20 minutes.
The biggest challenge will be providing convenient and affordable charging for low-income communities and to residents of multifamily housing or homes without garages. But as these user types will generally be the last to adopt electric cars, the marketplace will rise to the occasion and solve this problem in time.
Clearly, we have a long way to go until electric vehicles reach mass adoption — around 2024 in the US by my forecast (16% of new auto sales) — but the future is clear, and it is electric vehicles.
So if the auto and related industries are not arguing about things like hydrogen fuel cell versus battery electric propulsion, what topics and debates should the dialog move to? What then are the implications of a future of electric vehicles?
This shift in the conversation about electric vehicles leads to two overarching questions:
- What infrastructure and resources are required to support mass adoption?
- What are the major implications for multiple industries, countries, and society at large?
Digging beneath the above, I’ve identified 30 more detailed questions that we must address and solve. In some cases, the answers to the following questions are simple or inevitable. In others, the answers may vary by country or region or are simply too difficult to predict at this point.
- Will power grids be able to handle increased electricity demand from EVs?
- Will the supply of green energy continue to outpace demand for EVs?
- Will vehicle to grid (V2G), vehicle to home (V2H), and demand response technologies and programs transform the role of the vehicle and how utilities manage the grid and customer energy use?
- Can private enterprises profitably build out the necessary charging infrastructure or will governments need to step in to force and/or subsidize charger installation — especially in lower-income communities?
- Will the mining industry be able to keep up with EV battery manufacturers’ needs for minerals such as lithium and cobalt?
- Will auto and battery manufacturers be able to build enough factories to meet the potential explosive growth in EV demand beginning around 2025?
- How many legacy automakers will successfully transition from analog machine assemblers to hardware/software/battery companies? With batteries at the core, will most automakers also transition into energy storage business?
- Will most utilities survive the transition into green energy suppliers and become the “new oil companies” by providing electricity solutions for transportation?
- Will convenience store & gas station operators replace gas pumps with EV chargers in time, or let new entrants own the highway and neighborhood charging business?
- Will smaller automakers with fewer resources such as Mazda, Mitsubishi, Subaru, etc. be able to survive or remain independent as they move to build out electric vehicle platforms?
- How soon and quickly will the decline of the auto parts and repair shop industries begin? Can and will they evolve into new businesses supporting, for example, EV charging or related businesses?
- With used cars (powered both by electric motors and internal combustion engines) declining in significant value due to technology obsolescence from advancement in battery and autonomous vehicle technology, what happens to the used car market and various forms of auto financing?
- While peak oil is perhaps two decades away, will oil companies begin transitioning into broader energy companies to participate in the shift to solar and wind energy and electric vehicles.
- With China being the largest market for automobiles in the world and its government aggressively pushing a future of electric vehicles, will Chinese automakers dominate in a future of global electric vehicles? How will European, Asian, and American manufacturers partner with Chinese manufacturers to produce electric vehicles for both China and other markets?
- Will we see a significant reduction in manufacturing and supply chain jobs with the shift to robotic manufacturing and simpler-to-produce electric drivetrains and motors that use fewer parts than internal combustion powered vehicles?
- As cars become more similar to hardware/software combinations, will the annual model nomenclature eventually be replaced with software-like version release cycles and naming conventions?
- Will the legacy auto dealership model evolve or disappear with electric vehicles requiring less service and maintenance combined with a likely gradual move towards direct sales?
- Will most or just a few legacy automakers follow the lead of Tesla and evolve into integrated energy and transportation providers incorporating electric motors, solar power, battery storage, battery manufacturing, energy management, ridesharing, and autonomous driving technology — or will multiple industry models and combinations emerge?
- Will the electric car battery serve double duty and become the centerpiece of demand response, vehicle to grid (V2G), and vehicle to home (V2H) systems?
- Will the need to recycle lithium-ion batteries lead to a significant spin-off industry of reusing EV batteries for more affordable commercial and home energy storage, as well as storage for remote EV charging locations?
- Will technology developments, such as solid-state battery advancements, become key enablers of mass adoption because of the resulting significant increase in battery range and reduction in charging time?
- Will the technology obsolescence issue resulting from annual advances in electric vehicles stimulate subscription and similar “as a service” models and move us away from purchasing and leasing cars?
- How will the intersection of electric vehicles, car/ride sharing, and autonomous vehicle technology affect their respective adoption rates?
- How will Transport as a Service (TaaS) alter the current paradigm of vehicle ownership and the adoption of shared electric vehicles? Will TaaS only be adopted in large urban centers?
- What tax or fee structures will governments use to replace the gasoline/petrol tax?
- Will we see political instability and wars resulting from oil-rich nations experiencing a huge decline over time in oil revenues and political power?
- What will happen politically and economically in lithium-rich countries like Argentina and Chile and cobalt-producing countries such as the politically unstable Democratic Republic of Congo (DRC) when demand for their minerals required for batteries explodes in the next 10 years?
- Will various governments continue to subsidize or incentivize electric and alternative fuel vehicles as well as charging infrastructure; and how will that affect regional competitiveness?
- How will country and regional emissions regulations (or lack of) affect EV supply and demand and auto company competitiveness?
- What tax and incentive schemes will governments use to spur EV adoption and build out of charging infrastructure in disadvantaged communities?
What key questions have I missed or perhaps even gotten wrong?