A new global car industry for the UK?
The Path to UK Leadership in Electrification and EV Innovation
The Electric Vehicle (EV) market is stuck in a sub-optimal equilibrium - and the UK government is well placed to break out of this and create a world leading EV industry and a greener transport system. Here's how.
Current Dysfunction
Currently, market adoption of EV is slowed by range anxiety and the high capital costs of EV batteries. Charging times and the limited availability of charging points limit the appeal to consumers and market innovators face high barriers to entry: EV incumbents compete to secure supply chain advantages in battery cost, and fuel retailers look on helpless as charging infrastructure atomises.
Swappable Batteries - Standards and Distribution
In these conditions, the government can improve the function of the market by coordinating the creation of battery standards - specifically interface standards and mounting/dismounting standards - so that EVs can swap freshly charged batteries in seconds rather than being static while built-in batteries recharge. This eliminates charging delay and range anxiety, and creates the opportunity to reactivate the existing fuel distribution estate of fuel retailers.
New Industry Structure - and Export Advantage
This will stimulate the development of a battery rental market, reducing the capital cost of EVs and stimulating more demand from consumers and innovation from suppliers. Since the UK EV market opportunity is large enough to foster the growth of companies that would then have the scale to export this is also an opportunity to pave the way to stronger standards-led EV exports.
Asymmetric Risk
This approach does not require an exclusive commitment. The development of the standards will not preclude the further development of existing business models. The upside potential for the UK economy and environment is high, but the opportunity cost is low.
Government Action Required
This is a coordination challenge. Since decoupling the ownership of the battery from the ownership of the car creates scope for new market actors (battery rental, distribution, financing etc), the government has a role to play in bringing these groups together with standards bodies, incumbents etc. The decisive government intervention will be the establishment of a set of British Standards for swappable EV batteries.
Next Steps
Structuring the market and incentives to favour the UK economy - solving for EV adoption rates, and for innovation and investment in R&D - will be a powerful example of British innovation in governance and market development as well as technology, and could be achieved by a small team with the proper mandate.
@ Deutsche Telekom | Innovation
4 年Ben. Great initiative. One area could be building capabilities & skills in V2G. CCS is set to standardise this by 2025, although many OEMs will have enabled it before; and by then, they’ll be 5-8M BEVs on the road in the UK alone. We’re already leading the V2G field, with more PoCs than the rest of the EU combined; and with so much learning, we can bring this knowledge to other markets, given the immense technical & commercial challenges that will need to be overcome to fully exploit the opportunity.
Certified Posture and Movement Specialist | Helping You Find Relief from Back Pain | Restoring Pain-Free Movement
4 年I love this. I feel like this is a real 'watch this space' kind of moment.
Fractional CFO | scale-ups & SMEs < ￡25m | CEO & PE support ? Pre & Post funding transaction execution & DD ? Financial Modeling ? Professionalising Finance Function ? Ops Strategy ? Delivering EBITDA Growth??
4 年great insights - thanks for sharing Ben