ICE vehicles will be replaced by electric ones - the automotive industry of the future

Very briefly summarized: the claim that ICE vehicles will be replaced by electric ones very likely will become reality, at least for the near future. And Tesla is definitely currently leading the pack.

The ICE vehicles WILL be replaced

There is no doubt in my mind that the internal combustion engine (ICE) is ont its way out. Already during my previous career in oil and gas, we would frequently be told that “the easy oil (read: cheap) is finished”. As Stephen Fry beautifully and elaborately explains in the first episode of his podcast “great leap years” - a podcast I recommend listening to anyone with some spare hours to fill - through using fossil fuels we were smartly doing more work at a lower cost of (our own) energy, but we now know we were simply emptying the earths savings account at the cost of risking upsetting the environmental balance to one that is no longer inhabitable for us. In a move to force society to more sustainable methods of transport, in 2018 already nine countries and a dozen cities or states announced to start phasing out ICE vehicles starting as early as 2025, with more having followed since and even moving their initially announced dates to earlier ones.  

In my introductory writing I already briefly touched upon technological progress (ref.) and the intrinsic link between innovation, commercial gain and political/social need. A generally accepted theory in technology management is that technology life cycles follow S-curves, in which four stages are defined as follows:

1. the innovation stage, representing the birth of a new product resulting from R&D activities (start of the curve);
2. the syndication stage, representing the demonstration and commercialisation of a new technology (curve curling upwards from horizontal);
3. the diffusion stage, representing market penetration of a new technology through acceptance of the innovation by potential users of the technology (linear central part of curve); and
4. the substitution stage, representing the decline in the use and eventual extinction of a technology, due to replacement by another technology (curve tapering to horizontal and end).

The aforementioned political announcements have definitely marked the substitution stage of ICE vehicles. Although increased use of internet may reduce our travels somewhat, I hardly doubt the end of the ICE will mean the end of travel - just think of the large reduction in traffic under initial COVID-19 lock-downs and the rate at which traffic picked up again as soon as lock-down restrictions were reduced. Thus the automotive industry will survive, albeit using different propulsion technology.

Electic VS hydrogen

From a technological point of view, both options are viable, though each have their own draw-backs and areas of development to work on.

At first sight, the promise of hydrogen appears more convincing. HFC vehicles are basically electric cars with a fuel tank, having performance and instant torque similar to BEV, while providing a greater range and allowing refueling being done within similar times as ICE vehicles. As a result, until about 5 - 10 years ago, Japanese automakers in particular were eying hydrogen fuel cells as the perfect replacement for ICE. Currently there are three hydrogen fuel vehicles (HFV) available for lease or purchase: the Toyota Miraj, the Honda Clarity Fuel Cell and the Hyundai NEXO. Even the international IP organisation WIPO published an article pointing towards HFV being the future. A few drawbacks, indicating focus areas for the technology were indicated as:

• It takes quite a bit of energy to extract hydrogen from water.
• Hydrogen, a gas at room temperature, is difficult to store: It has to be strongly compressed – requiring pressure safe storage tanks – or liquefied by cooling (cryogenic hydrogen).
• Fuel cell technology is relatively new and the cells are fragile and expensive.

However, since then all manufacturers seem to have shifted their main focus to producing battery-electric vehicles (BEV), with the European Patent Office reporting an increase in patent activities for batteries and other electricity storage technology of 14% per year worldwide and electric vehicles surpassing consumer electronics in being the largest growth driver for Li-ion battery-related inventions. 

The reason why BEV technology, at least for passenger cars, is currently winning has little to do with technology or consumer comfort, but rather with money. Studies have shown that, considering current trends on efficiency improvement, the production of hydrogen remains too inefficient to compete with BEV’s, thus the cost per driven km/mile for BEVs is much lower. Add to this the BEV improvements in range, as batteries are getting more energy-dense, and the fact that BEVs are cheaper to buy than FCVs, the FCVs stand no chance.

Thus, unless some ground-breaking invention is done which makes the production of hydrogen a lot more efficient and cheap, electric is indeed the way forward.

Battery powered electric vehicles are the future and Tesla is currently leading the pack

Be it luck, be it wisdom or be it extraordinary skill to adapt or shape the future to his vision, Elon Musk’s Tesla had a 10 year head-start over Volkswagen and most other main car manufacturers, which they are currently rapidly trying to make up for. Volkswagen, for example, aims to vastly surpass the production capacity of Tesla by 2023, while Tesla just announced it wants to drastically reduce battery pack prices by enabling their production taking place in 1 factory, rather than requiring at least 4, allowing new Tesla car prices being halved within the next three years to a rather affordable 25000.- USD starting-price.