Electrifying Vehicles

Electric Vehicles (EVs) are the step-sisters of their more chic siblings, the Autonomous Vehicles, and their more popular siblings, the Internal Combustion Engine (ICE) vehicles. The ICE, being the normal car (petrol, diesel, gasoline etc.) that close to 100% of us drive today. This puts EVs in between a rock and a very hard place. If you've recently bought or considered buying a vehicle, chances are that unless you are from the Nordics or an ardent environment lover, you haven’t given a serious thought to an electric vehicle. Whether that was a conscious or a subconscious decision, here are some of the likely reasons why you didn’t consider an EV: it is too expensive; it feels like too much hassle to maintain because it might break down like your toaster; what’s the fun in driving a vehicle that has no noise; where do you ‘fuel’ it up; and so on. Apprehensions like this, whether relevant or not, form one of the main causes of low adoption of electric vehicles today - consumer demand. How relevant are these apprehensions anyway? A bit of context would help.

An evolution in slow motion

Today, EVs are a part of a transition of multiple ecosystems – each one being extremely complex in its own right. The most obvious is automotive. The automotive industry is abuzz with the concept of New Mobility that entails everything from autonomous driving, ride sharing and ride hailing to drones that deliver your parcels. It is essentially a focus purely on moving goods or people from point A to point B, cost-effectively and conveniently – whether you use Hyperloop, an autonomous aerial vehicle or bare-back horse ride is just an algorithmic problem. Automotive companies (the OEM) are experimenting with the right fit for their brand and business. EVs are a subset of their new mobility plans, not just from the new mobility angle, but also from an increasing pressure from environment-conscious governments, cities and citizens. As cities become smarter to build more sustainable habitats, environmental footprint becomes a key concern. Urbanization (66% of the world will live in cities by 2050) is forcing cities to strike the right balance between economic, environmental and social factors to make the cities more livable. Again, eMobility (the realm of EVs) is an important, yet small, subset of the equation. Which brings us to the third large ecosystem – Smart Energy. Electricity is anticipated to see a further surge in demand, accounting for about 40% of energy demand by 2040 (source: IEA). The energy sector needs to gear up for this demand, all the while becoming cleaner, and addressing the challenge of better demand response management because of an increasing trend of decentralization. EVs form a subset of this ecosystem as well, as they are seen as decentralized reservoirs of energy that could help energy companies cope with surge of demand at peak hours. If electric vehicles have so much potential (literally!), why is their adoption moving at snail’s pace? That’s where our list of questions become important to address.Vehicle buyers still have a mental barrier to cross, and those random questions that pop in our heads, as consumers, are a big reason behind the low adoption figures.

Are EVs too Expensive?

Upfront, yes. There are reports that EVs will reach a price parity with ICE in certain regions next year. The more global scenario seems to suggest 2025 as the year when the price of an EV will be comparable to the ICE counterparts. One of the biggest contributors to this cost is the battery, which constitutes roughly 50% of the overall cost of the vehicle. If you’ve ever created a business case spreadsheet though, you’d know that the story of total cost of ownership never ends with the CAPEX. There is research that already suggests that EVs are cheaper to own and maintain over a period of four years. So the question of price is already relative, and seems to be moving in favor of EVs. The other extremely important area to be aware of is the enhancement in battery technology. The range of batteries continues to improve, while in parallel this Bloomberg study suggests that the average cost of batteries has come down by about 70% since 2010. This trend is going to be a huge contributor to bringing down the EV cost, making it a more viable option for buyers.

Are EVs a hassle to maintain?

No. This question stems from an illusive image of electric cars. On the contrary, the beauty of electric vehicles is that there are minimal mechanical parts. So you can say goodbye to engine oils, break oils, and so on. An additional benefit of electric vehicles is that so much is governed by electronics, a lot of patchwork (for example downloading new software) can be done remotely, without visiting a service center. So much so, the regenerative braking mechanism allows a vehicle to brake without any brake pedals, which means a) less reliance on mechanical parts, b) less wastage of energy, and c) we might even see the brake pedal disappear in the future all together. This heavy reliance on electronics and little dependence on mechanics is why it’s easy for EV manufacturers to offer longer term warranties. The main part that they have to warrant for is the battery.

Is an EV fun to drive?

Yes, but defining ‘fun’ can be extremely relative and hard to back with numbers, so it’s best if it can somehow be visualized. Have a look at this video:

As a lot of hardcore car and bike fans will tell you, the sound of the vehicle is an extremely important element of the overall driving experience. Ironically though, a lot of it is faked today. But companies like Harley Davidson are well aware of the attachment of their customers to sound. They've patented the sound of their electric bike! It might take a few iterations to get this right, but as you can see from the video below, technology is not the limiting factor here. With electrification, come greater options!

Where do you fuel it up?

At home. At your office. Or public charging stations. But the charging time and experience could be very different in each case. There is a huge perception barrier that EVs need to cross. It’s called “range anxiety”. Let’s draw an analogy with your smartphone. Managing a smartphone’s battery is a part of our daily routine now. But let’s face it; we’re all caught in that spot some time or the other where we ask ourselves, “Will it last?” It could be before a long road trip, or before an important customer meeting. Let’s face it – smartphone downtime is a no-go today. That’s what range anxiety is – the fear that your EV might not have enough juice for your ride. For smartphones, though, we’ve reached a point where charging is not a mental barrier. You have wireless charging, USB ports, battery packs and what not. And if all else fails, someone at work will have a charger for your phone! Electric vehicles do not enjoy this same pervasiveness due to many factors – size, lack of interoperability, lack of public charging station, and lack of electric vehicles themselves! It might sound like a chicken or the egg dilemma, but it’s more of a perception dilemma. Why? Because a slow charging solution at home, alone, could serve the need of majority of drivers’ daily commute. But the mere absence of charging stations creates a mental barrier for most drivers.

Charging at home can be painstakingly long though. If you've had a day of heavy usage, you could possibly leave your vehicle to charge overnight, and still wake up next day with a less-than-full battery. Like the smartphone world, the EV world has a fast charging and wireless charging solution as well. But the cost for fast charging (especially DC charging) is inhibiting today. For a simple clarification, if you want to buy a DC fast charger with your Tesla, you could end up paying the price of two Teslas! Whether we actually need a network of public fast chargers for our daily commute or not, we certainly need them to address the range anxiety perception. There’s a great explanation (may have inaccuracies) on different types of charging, including costs and charging times on this website.

Other questions?

There could be other questions in the minds of potential EV drivers. These questions could vary from one region to the other or from one individual to another as well. Questions like safety come to mind due to the battery explosion concerns. Security becomes a huge concern as our vehicles are governed more and more by software and electronics. And then, a much deeper question is whether electric vehicles are indeed environment-friendly when considering well-to-wheel statistics that not only look at what an EV throws out of its exhaust (that doesn't exist), but also the overall footprint of running EVs, including power generation and distribution. While extremely important, I feel these questions are not as likely to govern EV adoption as the ones I listed above. It would be nice to hear what you think would be a deciding factor for you to consider an electric vehicle.

Where do we go from here?

Favorable government regulation is the single biggest stimulus for adoption of electric vehicles. According to studies by IEA, 95% of electric car sales are taking place in just ten countries: China, the U.S, Japan, Canada and 6 European countries (hence my reference to the Nordics earlier). Norway beats all other countries (hands down) with roughly 30% of vehicles registered in 2016 being electric (PHEV or BEV). Regulation in these countries is paving the way with upfront subsidies to address cost concerns, setting up of fast charging stations, eco taxes, free parking slots, and where applicable, offering stimulus to the OEM to boost technological advancements in battery technology and electric vehicles at large. ISO has issued a standard that introduces something called Plug & Charge – a feature that would allow you to simply plug in your vehicle at a designated station, and the charging starts automatically! No payment steps like entering a PIN, paying by card, or even taking out your smartphone. If you’re working in this space, please reach out*, as I’m working on some interesting features in this area. The countries that are serious about EV adoption are already moving at full speed ahead. As per an IEA report, there are roughly 110,000 public fast charging outlets worldwide, and 81% of them are in China. The worldwide growth in public fast charging outlets has been around 300% from 2015 to 2016. Although as a proprietary solution, Tesla already realizes the importance of setting up a frictionless charging process, as well as setting up publicly accessible fast chargers for its customers to increase their confidence. It boasts a network of around 7,500 Superchargers worldwide, but there's surely room for a lot of more from other players! Whatever concerns you might have, regulatory support in your region is likely to largely influence your decision-making process. Here's to hoping that this post would at least help you consider an EV when you considering your next buy. What would it take for you to be a part of this EVolution?

*Here's a friendly LinkedIn tip: if you feel like connecting with someone, tell them 'why' you want to connect in your invitation.

DISCLAIMER: All the cool views presented in this post are my own, and do not necessarily reflect the views of my past or present employers.

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