Under the slogan “Driving Tomorrow”, last year's Frankfurt motor show offered the public a glimpse into the future. A future in which the power socket will replace the petrol pump.
During a week-long event that also drew hundreds of climate protestors, the glitziest models on show had one feature in common: they were all electric.
Eager to burnish their green credentials, automakers unveiled a dizzying array of new technologies. Among them were next-generation battery packs, hydrogen fuel cells and even an all-electric rally car.
For all the glamour, it's clear that replacing the combustion engine isn't going to be cheap. But neither is the auto industry lacking in incentives to go green. In Europe and China, car manufacturers are under pressure to comply with new environmental regulations. Polluters face heavy fines while firms who continue to make non-electric cars will be subject to a slew of new rules covering everything from energy efficiency to research and development budgets.
Even so, the road to zero-emission transport isn’t without obstacles. The price of electric vehicles (EVs), for example, is still too high to convince many drivers to switch from traditional fuel-based cars.
Infrastructure, or rather the lack of it, is a bottleneck. Today’s electricity distribution network will almost certainly struggle to cope with the arrival of millions of power-hungry EVs over the next decade. Power grids will need more investment – an estimated USD3 trillion is set to be spent on transmission infrastructure in the decade to 2026.1
Shifting gears
Electrification is gaining momentum. According to the International Energy Agency, the global EV fleet grew to 5 million in 2018, up 2 million from the previous year. That equates to 36 million fewer tonnes of CO2-related emissions pumped into the atmosphere.
By 2030, there could be a total of 18 million EVs running on Chinese and European roads alone, more than gasoline and diesel cars combined.2
Such forecasts might seem optimistic at first glance. Yet muscular regulators and new technologies are potent catalysts for change.
China, the world’s biggest EV market, has banned investments in new internal combustion engine (ICE) factories since January, building on existing subsidies to boost the uptake of electric cars.
Europe, the second biggest, has also introduced tough new emissions standards. Every car manufacturer must now cap emissions for its entire fleet to 95g of CO2/km on average by the end of 2020 – some 20 per cent below the average emission level in 2018. This cap will drop to 81g by 2025 and to 59g by 2030.
Those who fail to meet the standards will pay a heavy price: the fine is EUR95 for every g/km of excess emissions per vehicle. Car manufacturers that fail to improve their CO2 emissions compared with 2019 levels face possible fines of several billions of euros every year.
Bigger, better, farther
Technological trends are just as powerful regulatory ones – not least because they are crucial to bringing down the retail price of EVs.
Progress here has been encouraging.
By 2025, most EVs are likely to be cheaper to buy than conventional cars.3
This makes the economics of driving an EV even more attractive than it is today because the cost of running an electric car is a fraction of what is spent maintaining a petrol-guzzler.4
The reduction in EV prices will come as production scales up and as innovative technologies become cheaper.
Improvement in lithium-ion battery technology has been particularly impressive: battery costs have fallen 90 per cent over the past decade, and are forecast to drop a further 47 per cent between now and 2024.5
At the same time, manufacturers have been steadily increasing the nickel content in battery cells to boost capacity, reduce weight and lengthen EVs' driving range. The cost of NMC622 type batteries has fallen 20 per cent since 2016 to EUR112/kilowatt hour (kWh).6
The next generation NMC811 – which is expected to push EVs way beyond a 500km driving range – should achieve EUR69/kWh in the next few years.
Battery chargers are also becoming faster, helping drivers to get back on the road quickly.
Some of the new superchargers run at 250kW power – compared to today’s range of between 3 and 200kW. These could given drivers up to 120km of range for every five minutes of charge. A new charging network in Germany should allow up to a 350kW charge.
Further improvements are possible, but harder to come by.
Ultra-fast chargers require a power feed that is as large as the maximum electricity needs of about 60 average homes.7 They run on the direct current (DC) system to pump the battery fast. That means that they first need to convert the alternating current (AC) delivered by the grid to DC.
This demands advances in power electronics and semiconductor systems.
Once such technologies become fully viable, they will combine with the use of new materials (see below) to make EVs cleaner and even more powerful.
An electric future, then, is not the distant prospect it used to be. The internal combustion engine is approaching the end of the road.
[1] Northeast Group
[2] Bloomberg New Energy Finance (BNEF)
[3] International Council on Clean Transportation, April 2019
[4] The cost of electric charge for 500km is around EUR5, a tenth of gasoline or diesel.
[5] BNEF
[6] Nickel-Manganese-Cobalt cathode with the composition of 60% nickel, 20% manganese and 20% cobalt. Source: P3
[7] Based on average electricity supply contract at 6kW
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SiC: star material from stardust
Silicon carbide (SiC) is among the new materials being embraced by EV manufacturers to boost efficiency. First discovered in 4-billion year old meteorites, SiC is a durable crystalline compound of silicon and carbon that, when used in a semiconductor as an alternative to silicon, allows an electric motor to operate at higher voltages.
SiC devices are smaller, faster and more efficient than their silicon counterparts when dealing with high-power applications. They also have the potential to halve charging time and increase driving range by up to 20 per cent.8
The global automotive industry’s demand for SiC is expected to grow at a compounded annual growth rate of more than 60 per cent between 2018 and 2030.9
[8] Based on Delphi Technologies’ SiC inverter with electrical systems of up to 800V; Goldman Sachs SIC research, November 2018
[9] Goldman Sachs SIC research, November 2018
