New-tech EV excitement gives way to reality

Global studies draw a clearer picture of the timing and market position of EVs

Initial overoptimism about the rise of the electric car is settling into a slower than expected but steady growth pattern, industry studies have revealed.

In a latter-day equivalent to the post-war space age and the dotcom bubble, the last five years have been marked by sometimes shrill excitement among manufacturers, lobby groups and pundits about the speed with which electric power would gain consumer mindshare and supplant fossil fuels as a mass-market drivetrain of choice.

Now, studies are producing results showing that to be dampening down as the industry embarks on what’s shaping up as a long, slow overhaul process.

With Audi, to date one of the industry’s most vociferous advocates of the technology, announcing it’s shelving the electrification program into which it’s sunk many millions of deutschmark, global research consultancy KPMG’s 2013 Annual Global Automotive Executive Survey, gives some pointers to why.

Compiled from respondents in mature and emerging markets across the globe, the KPMG study is among the largest and most comprehensive of its type.

“These results show an increasing realisation that the electric vehicle is not quite the saviour many had hoped for,” the company says in the summary of its newly released 2013 edition. “Although e-technology is still high on the agenda, respondents from the mature regions [US, Europe, Japan] now place a greater faith in optimizing IC engine technologies. Even in the BRICs [the emerging economies of Brazil, Russia, India and China], ICE downsizing has become a big deal.”

Where a year ago respondents believed fossil fuel would retain its ascendancy for “up to five years”, a majority – particularly in the mature markets – now concedes it will be “well over six years” before battery power presents a clear, compelling case as the cleanest, most efficient technology.

Even though “more than half of auto executives involved in the survey feel that battery electric vehicles will have the same driving range as their petrol-fuelled equivalents within six years”, the trend is strengthening towards spreading R&D funding across multiple technologies, with most of the attention going to plug-in hybrid systems and combustion engine downsizing. These are already well recognised as the chief stepping-stone technologies in what’s still taken as an inevitable shift towards broad-scale electrification.

In what it describes as “quite a turnaround in direction”, the survey found even countries seen as most active in electrification have shifted substantial resources towards IC engine optimisation. The last year has seen about 40 per cent of Chinese and 37 per cent of Brazilian manufacturers and suppliers sink the bulk of their funding into it.

Sharper growth in battery industry

Nevertheless, steady growth in the EV sector’s market share will produce dramatic growth in the battery industry, according to a study released this month by US researcher Pike.

By its reckoning, the global automotive lithium-ion battery market is to grow thirteen-fold, from US$1.6 billion in 2012 to almost $22 billion by 2020.

Pike says battery-electric vehicles will be the dominant driver of this growth, for the larger number of cells they need than PHEVs. The biggest PHEV batteries currently on the market are about the size of the smallest all-electric units – ranging from 4kWh to 16kWh, while BEV packs range from 16kWh to 85kWh.

The company forecasts the fastest growth in both production and consumption of batteries will take place in the Asia Pacific region, with China set to overtake Japan for global production leadership by 2015.

UK pundits, meanwhile, predict 2013 will see a doubling of EV sales, albeit from a low base, as the national charging infrastructure grows and the cars get cheaper, more stylish and desirable. The Guardian and nextgreencar.com report that industry analysts expect EV sales to grow from 3000 in 2012 to 6000 this year. Most of the cars currently on UK roads belong to corporate fleets, and that’s the sector expected to account for most of the sales growth in the near future. But product is now reaching the market at prices more tempting to consumers than the early-adopter money we’ve seen to date. Renault’s five-door Zoe (pictured), for example, will go on sale this year at £13,650 (about $20,700, plus £70 or $106 a month battery lease).

The UK network of charging stations, meanwhile, will expand, with London’s quotient alone growing from 900 to 1300 units. Charging connections will also be standardised (they’re not at the moment), allowing greater reach across the country. All told, Britain’s Department of Transport estimates that with privately installed units included in the count, there are now about 5000 charging stations distributed across the UK.

While Audi withdraws from the EV sector, chief competitor BMW is going full steam ahead, launching its i3 city EV in Europe later this year and the larger, flashier i8 in 2014.

Echoing the sentiment of pundits around the world, nextgreencar.com editor Ben Lane suggested to The Guardian that the German marque’s arrival will go some way to shift the popular perceptions of the EV’s shortcomings blamed for the sluggishness of sales to date.

“This will change the image of the electric car,” he said. “It is completely connected to the internet and beautifully designed.”

Tesla’s Model S is expected to help in a similar way. At the moment the company is flat out meeting demand in left-hand drive markets, so the arrival of the Model S is likely to be delayed in right-hook Britain, but with upspec models boasting a range approaching 500km on a single charge and prices expected to range from around £36,000 (about $55,000) and £50,000 (about $76,000), the Model S will also likely help boost buyer interest in the technology.

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New-tech EV excitement gives way to reality

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