We are seeing the spectacular sales growth of BEVs (battery electric vehicles – no combustion engine) and PHEVs (plug-in hybrid electric vehicles) in Europe, followed by a similar boom in China that started some years back. EVs are selling not because consumers finally embraced sustainability as a religion, but because manufacturers are threatened with massive fines if they don’t sell enough of these. Tax breaks and financial incentives are an extra sweetener that helps convincing a growing number of consumers. EV advocates were quick to sing victory and declare ICE as dead.
As the EU and the UK set a clear date for the end of ICE (internal combustion engine) sales, all seems like a done deal. However, this may be a major oversight. The EV value proposition (talking BEVs) is still far from enchanting the vast majority of Europeans. This must not be ignored by government and industry – doing so will bring deceit to consumers, which may end in a public backlash. If EVs haven’t won the almost entirety of consumers by 2030 (UK) or 2035 (EU), this may push the deadline for ICEs by several years until, hopefully one day, governments and industry get things right. Alternatively, if governments insist on those deadlines, it may drive passenger car sales dramatically. For instance, Renault – despite being a top EV seller – is seeking to extend EU’s ICE ban which is indicative. As such, effectively, we are now in a race against time to make BEVs work for the vast majority of car buyers.
It all starts by understanding human behavior
BEVs will only prevail if they adapt to the way how car buyers think and their lifestyle:
- Modern society is about impatience – we want everything to be ASAP. Therefore, most consumers (EV partisans excluded) are not willing to wait hours for their car to charge unless this coincides with another activity of great value to their routine.
- The vast majority of buyers chooses a car that is way above their real needs – considering most of the time cars drive with one person and in daily short distances, then a microcar would be ideal for most – but car sales reflect exactly the opposite. For exactly the same reason, don’t be surprised if most consumers say 400km of range is not enough – their reference will always be what they know today from ICEs.
- Cost matters a lot – and financial aids won’t last forever.
Trying to educate consumers or forcing them to do something is futile. If the technology does not adapt to their needs, then it can’t succeed. Let’s now look at the different areas that must be tackled for EVs to win over the vast majority of our society.
It’s clear for most there is still a huge shortage of chargers – and yes, even for those that drive just 20 km per day, simply because one day they will drive more than that and fear what will happen. Several chargers have a tendency to be down (as VW’s CEO recently expressed in a rant). Also user discipline is low, with many simply hogging chargers or ICE drivers simply blocking charger car parks. This means not only many more chargers are needed, but also mechanisms must be created to ensure a fair use of those.
Then comes location. We are not short of examples of companies or even governments taking action to put chargers in places that don’t matter whatsoever. Chargers need to be available in places that are compatible with people’s routine – this means places where they regularly need to spend a fair amount of time as part of their routine. This means:
- Creating broad charger availability at home, workplace and retail, with some charging capability in road corridors for long-distance driving.
- Developing legislation and infrastructure so that every single car that spends the night in the street can be charged with minimal fuss (82% of US population lives in cities, 75% in the case of EU).
- Enabling a vast number of chargers at workplaces as 7-8 hours of work give a lot of time to top up the battery. And the weekly shopping run represents half hour to two hours that can charge a big part of the battery by using fast charge.
The cost equation
Even with all regulatory and financial support given to EVs in Europe, this is still a car for the affluent. Never mind that on average an EV is 41% more expensive than an ICE even after incentives (September 2021, EU, source: JATO). There is also a clear geographic divide between rich and poor countries, with those of central and northern Europe showing reasonably higher EV penetration than south and east. Besides, if you are not rich enough to have a house with your own parking spot and charger, then this will significantly affect your EV’s TCO – using a public charger can be a very expensive proposition, especially a fast charger. For instance, the electricity price/km for a Tesla Model 3 SR+ (when charged at Innogy Germany) is 44% higher than the diesel price/km for a BMW 320d (also in Germany) – using WLTP consumption figures. The comparison uses fast charging as this is fairest given the very low time it takes to refuel a diesel car.
EV maintenance also presents some cost challenges. Even that EVs require less maintenance interventions than ICEs, battery durability is still a concern. For instance, as VW publicly claims the durability of its EV battery to be 350,000km, the truth is that a reliable ICE can last a lot longer without changing engine and gearbox. Even if EVs are covered by longer warranties, EV owners replacing a battery outside warranty stand to pay a hefty bill. For entry-level EVs, the invoice could be above the car’s residual value. EV drivers making frequent use of fast charging will see their battery life shrink even faster. Even if this doesn’t mean all EV batteries will last only 350,000 km, the truth is that an inferior durability comparatively to an ICE is a caveat for many vehicle owners.
To make matters worse, how long will governments be able to sustain EV subsidies and tax breaks is the key question – especially given the massive burden COVID-19 has been to the public budget. European governments make a substantial revenue from fuel taxation and road tax – it would be naïve to think EVs will remain impervious to taxation for a lot longer.
- EVs’ cost reduction roadmap needs to be more aggressive – cost is paramount and this is a race against time until incentives and tax breaks disappear. Besides scale and transition to EV-specific platforms, the design of EVs needs to be simplified and the level of manufacturing automation needs to be upscaled.
- Public charging prices need to be made lower in order to attract less affluent car buyers. Regulation may be needed to ensure that.
- OEMs need to make efforts to further improve battery durability. Given that EVs are still at their infancy, consumers are unaware of this problem. However, it will take just some years until the issue becomes common knowledge and an obstacle to EV purchase.
Driving range is still a problem
Let’s start by saying EV driving range has been clearly improving in the top segments – with Lucid Air, Tesla Model S Plaid and Mercedes EQS being good examples of that. Sadly, these cars are beyond the majority’s purchasing power. As on paper most EVs don’t evidence a great range compared to ICEs, reality is even worse as their real-world energy consumption is very influenced by particular factors like low temperature and motorway speeds. For instance, as shown in the table below, several EVs present a dramatically low driving range in motorway (70 mph – 112 km/h).
Buying an EV that can’t do much more than 100 km on motorway (at speeds below 120 km/h) is a major disappointment for many customers. Their expectations are set by what ICEs can do and the gap is major, especially in cold weather.
Recommendation: OEMs must put behind the temptation of selling ‘compliance’ BEVs – cars with ICE-shared platforms and laggard technology. On the short term, these are great to tick the box and evidence a EV portfolio. However, convincing customers to buy these cars is a long-term gamble, as these customers may not come back to EVs so soon.
The truth is that there are EV vs ICE carbon footprint comparative studies for all tastes, even that EVs lead over ICEs in the vast majority of situations. However, carbon footprint lifecycle assessments can vary greatly according to the conditions surrounding EV usage. Some examples:
- The battery is really the ‘Achilles heel’ of EVs in terms of carbon footprint. As mentioned earlier, if an EV battery would only last 350,000 but an engine and transmission can last a lot longer, this would heavily improve the performance of the ICE in comparison to the EV.
- Given that EVs are still at their infancy, the maintenance provided by OEM-affiliated dealers on EV powertrains is still basic – this means that in case of a problem with a battery or a motor, the approach is to replace the entire component rather than repairing it. There are already several situations of the sort happening – like for instance a Tesla Model 3 owner who was told by the dealership he had to replace the entire battery, at a cost of $16,000. But an independent repairer managed to solve the problem for much less. Besides the massive financial burden that could be avoided by EV owners, is also the aspect of sustainability – replacing a battery when, in fact, it could be repaired enhances EVs’ carbon footprint. unfortunately, aspects like this are not captured by carbon footprint lifecycle assessment studies.
- In countries where not only the renewable energy mix is low, but also charger network is practically inexistent, the benefits extracted from EVs will be minimal. In those circumstances, self-charging hybrids can provide a better outcome in terms of carbon footprint reduction, at least until renewable energy mix and charging network are up to speed.
- Battery recycling or second life can reduce the battery’s carbon footprint further. However, today there is still limited appetite of the industry to move close to 100% recycling content given that raw materials are still cheap enough and some recycling process technology still needs to evolve in order to enable this level of recyclability in a cost-effective manner.
- We should not wait until we reach battery raw material scarcity. Just like it happened with the oil industry, it’s quite likely the mining industry will adapt to find new raw material reserves since the demand for EVs is still relatively recent. For that matter, the move to battery recycling and reusability needs to be prompted by different triggers.
- Governments must enable regulation prompting the recycling of close to 100% of EV battery content.
- In addition, regulation on component reusability needs to be enacted in order to make sure that a major component (like a battery or a motor) is only replaced when there is absolutely no way to repair it.
- Each country must formulate policy that adapts its particular situation. For several nations, achieving an energy mix largely based in renewable energy and building a highly-dense EV charger network is something that is still some decades away, if possible at all. In those circumstances, promoting the widespread of self-charging hybrids is a good intermediate step until the main conditions are met to move into full electrification.
BEVs are the future – no doubt about it. However, the path to full electrification is still long and full of obstacles. Governments, press, industry, public opinion in general have the duty to highlight main roadblocks and work together to solve them effectively. This text provides several recommendations that can enable full electrification by 2030-2035 in Europe. However, it will take major cooperation and vision from all parties to achieve this goal.