Electric Cars - Global Trends

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Everbody talks about electric cars as the future of transport. Here are some of the challenges on the road. (June 2009)

Text of Electric Cars - Global Trends

  • Electric Cars Global Trends

    Results of Finpro ForesightInes Seidel, June 2009

  • Finpro ry / 2

    Electric Car Trends - Overview

    1. Background & Methodology

    2. Global Electric Car Climate

    3. Related Trends

  • Finpro ry / 3

    Background

    The Ministry of Employment and Economy has established an official task force "Electric Vehicles in Finland. The aim of the working group is to define the required measures for technology and innovation policy in order to strengthen the foundations of know-how and business aspects in Finland.

    Finpro Foresight has been asked to use Finpro global network to get a view on current trends related to the use of Electric Cars. Can we find signals that relate to the development outlook, impact, business possibilities, as well as future needs of the branch in terms of research and development activities?

    Finpro used the internal platform for sharing and discussing signals related to Electric Cars. The following presentations are an analysis of these signals, where appropriate, also developments that are only indirectly linked to electric cars have been included. Deeper analysis into specific areas or regions could be a next step.

  • Finpro ry / 4

    Methodology: From Signals to Trends

    Signal

    collection

    Pattern/Trend

    Recognition

    Analysis: What is

    happening + samples

    Spillover Effects

    Deeper Analysis of

    Options and

    Opportunites can be a

    next step

    Do it Yourself

  • Finpro ry / 5

    Electric Car Trends - Overview

    1. Background & Methodology

    2. Global Electric Car Climate

    3. Related Trends

  • Signals refer to various parts of the

    electric car eco-system

    Finpro ry / 6

    Society Context

    Energy Crisis

    Economic Crisis

    Government Influence

    Consumer Acceptance (Costs,

    Mistrust, Convenience)

    Manufacturing/R&D

    Car Industry crisis

    Battery R&D Progress

    Competing Alternative Transport

    Research Breakthroughs?

    Enabling Infrastructure

    Utilities

    Retail/Ownership Models

    Charging Infrastructure

    Insurance

  • Questions that move the market

    How long before electric vehiclesbecome mass market?

    While some car manufacturers are sure that

    the time for the mass-market zero-emission car has come (Carlos Ghosn, Renault-Nissan), other experts believe that it may

    take at least a decade before electric cars

    enter the mainstream.

    High purchasing costs and lack of

    convenience are currently seen as the

    main obstacles towards mass adoption.

    Hybrid cars are seen as an interim solution.

    There is a hope for research

    breakthroughs towards better batteries or

    other alternative energy that could change

    the game completely. Financial incentives

    like subsidies speed up mass adoption

    already today. Finpro ry / 7

    Research firm Fuji Keizai Co predicts battery-

    powered electric vehicles to go mainstream in

    Japan only until late 2020s or 2030s

  • Questions that move the market

    Who will be Winners andLosers?

    Establishing leadership in electric

    car technology is like the new race

    to the moon every one wants tobe first. There is a certain

    desperation in that competition as

    electric cars are seen as a way out

    of the crisis for the car industry

    and the economic crisis as a whole.

    This competition will inevitably lead

    to casualties and potentially also to conflict over resources. In

    many cases, competition for

    survival also leads to new

    partnerships and also new value

    chains/value networks are on the

    horizon. Finpro ry / 8

    The flurry of ruthlessly competitive diplomatic and corporate overtures to Bolivia is driven by the same dream: ultimate control of the future global

    market for electric vehicles. An ample supply of

    lithium, at least using current technology, is the

    critical weapon in that quest and Bolivia is to lithium

    what Saudi Arabia is to oil, say geologists. Times online, June 2009

    When the electric revolution final comes, China's e-bike makers could

    have the last laugh Time, June 2009

  • Questions that move the market

    Will electric cars maketransportation environmentally

    save?

    The concern that the electric car/battery

    industry is not really solving the energy

    and environmental problems of transport is

    voiced especially from activists and

    consumer groups. Being a little lessbad is not seen as sufficient. Also urban planning increasingly encourages

    alternatives to cars.

    As health and safety are generally

    growing more important to consumers,

    also electric vehicles need to address

    these topics.

    Finpro ry / 9

    How is using electric cars considered green technology? If you still are tied to

    a nuclear power plant that produces

    waste that cant be disposed of, how is that green? Letter to the Editor, Northwest Herald Feb 2009

    The suburban district Vauban was

    designed for living without a car. 70% of

    households do not own a car.

    Some worry that electromagnetic fields

    generated by electric vehicles could

    cause cancer.

    The delusion lies in the idea we can continue to live the way we do (eat,

    consume and travel) but do so in a

    "sustainable" fashion. Sydney Morning Herald, June 2009

  • Finpro ry / 10

    Electric Car Trends - Overview

    1. Background & Methodology

    2. Global Electric Car Climate

    3. Related Trends

  • Government Influence

    Countries like the U.S. or China have put

    it on their national agenda to develop a

    leading role in electric car technology.

    Governments try to speed market

    migration towards electric cars through

    financial incentives such as subsidies,

    taxes, investments. What will be the

    impact of electric vehicles on tax

    revenue?

    Finpro ry / 11

    Only if the cost of ownership is

    heavily subsidized will the cost

    of electric cars be brought

    down to an attractive level for

    most consumers. - Comeback of the Electric Car? BCG, Jan 2009

    Governments could lose tax revenues when drivers

    spend less money on

    gasoline Will lawmakers be willing to sacrifice tax receipts that pay for the

    upkeep of roads in order to

    help control climate change.

    If not, how will the tax burden

    be migrated to the new fuel:

    electricity? - Electrifying cars. McKinsey Quartlerly 2009, Number 3

  • Spillover Effects

    As electric car and battery industry take a

    center stage in plans for the future of

    transport, this opens opportunities (and

    challenges) to adjacent industries.

    Lightweight construction of car parts

    and overall sustainable design are

    obvious examples. Other spillover effects

    on new value chains are not so clear:

    Who will own and operate charging

    stations? Could electrified cars lead to

    new revenue streams for utilities? Will

    insurers see electric vehicles as more

    risky initially?

    Finpro ry / 12

    Because they are not in the mainstream yet we may

    look at potentially a higher

    rating for these cars. Part

    of the group rating is the cost to repair the car. The

    cost of repairing an electric

    or hybrid car could be

    higher because of the

    specialist technology they

    feature, Norwich Union, Britains biggest motor insurer.

    In the joined project, Vattenfall

    provides charging infrastructure

  • Not just Cars!

    When talking of electric vehicles,

    typically passenger cars are being

    discussed. But electric propulsion can

    also make sense for other vehicles,

    especially in an urban context.

    Finpro ry / 13

    Cheap, green electric bikes are

    more popular than cars in

    China's

    crowded cities, helping to offset

    the country's pollution problems.

    Last year, Chinese bought 21

    million e-bikes, compared with

    9.4 million autos.

  • R&D Wildcard

    The search for the best future transportation

    is going on. Hydrogen powered vehicles

    seem to have lost the competition: Ford and

    Nissan cancelled their hydrogen car plans

    and the U.S. Department of Energy has put

    the brakes on hydrogen fuel cell research.

    Could other alternatives (such as

    advanced internal-combustion engines

    (ICE)) make battery powered vehicles

    obsolete? Regarding batteries, R&D efforts

    are for instance concerned with storage and

    speed of charging. As lithium is difficult to

    recycle, also advances in recycling or

    alternative materials are needed. Finpro ry / 14

    Multi-fuel Cars: Technology that

    will allow cars to run on petro,

    ethanol, bio diesel, hydrogen,

    natural gas or biomass based fuel

    is developed at the German

    Aerospace Center in Germany.

    The various types of fuel are

    turned into electricity and the

    motor is in effect an electric motor.

    BCG developed 3 scenarios

    and found that internal compustion engines will

    remain the dominant

    technology in 2020 - Comeback of the Electric Car? BCG, Jan 2009

  • Alternatives to Ownership

    As many consumers are less interested

    in owning products but more in using

    them, alternative ownership models